Free Checking Accounts Not Entirely Free

December 16th, 2009

stockxpertcom_id11257051_jpg_c0a1e67addf4c56d4f2edb222a1857aaDoes your bank offer free checking accounts? You should take advantage, but be aware of the added fees that could add to your costs.

Banks offer different varieties of “free” accounts. Some offer free checking as long as you maintain a set balance in the account. With this type of account, some of the other bank services are also free. For instance, cashier’s checks, counter checks, and use of a debit card.

With the account that doesn’t require a minimum balance, you may pay extra for those services. You need to consider how often you might need to use those services before opting for the free account. For instance, if the bank charges a monthly fee of $6 but a fee of $7 for a cashier’s check and you need 2 or 3 of them every month, you’re better off paying the monthly fee.

Some bank fees can be easily avoided by good bookkeeping practices. The insufficient funds fee is a prime example. This can be as high as $39 per instance, so failure to record a $100 check and then writing subsequent insufficient funds checks for $10 or $15 could cost you plenty.

If you always play it close to the wire and your bookkeeping skills are imperfect, consider paying for overdraft protection. Remember that repeated overdrafts will not only drain your money, they’ll harm your credit scores.

ATM fees can also add up. Generally, if you withdraw funds from your own bank’s ATM, there’s no fee. But if you find yourself short of cash when you’re away from home, you could be hit with a fee as high as $5 per transaction for using a different bank’s ATM. Again, planning and bookkeeping will come to your rescue.

If you know you’ll need cash for a night on the town – get it while you can go to your own bank.

Other fees your bank might charge include:
• Coin counting
• Providing a credit reference
• Charging you for depositing a check that bounces
• Replacing a lost ATM / debit card
• Assisting with account research – helping you see why your records and the banks’ don’t match

Once upon a time, the only choice you had to make when opening a bank account was the color of your checks. But those days are gone. Now you need to compare the offerings in order to make a good choice.

Thus, before you open any account, ask for a schedule of the fees related to each type you’re considering. Then consider how you will use the account. You may be better off in the long run if you use an account with a minimum balance, or with a pre-set monthly fee.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

Financing Investment Property Difficult, but Not Impossible

December 16th, 2009

stockxpertcom_id25603011_jpg_bcbdf4d29b90e6f4ed52b12884e82fc7If you are an investor or a would-be investor with a high credit score, you do have a chance at finding a loan. And of course, with prices at near rock-bottom, now is the time to invest in residential rental real estate.

First, you need a good sized down payment. Since mortgage insurance won’t cover investment property, you need 20%. But if you can come up with 25% or more, you’ll stand a better chance of getting the loan.

To get good rates – and perhaps to get approval at all – your credit score must be 740 or higher. A score of less than 740 will mean you’ll either pay points or a higher interest rate.

On top of the down payment, you’ll need money in the bank for reserves. The bank will want to see that you have enough to pay for all your expenses – including personal expenses – for 6 months. If you own multiple rental homes, the bank will want to see that you have sufficient reserves to cover all of them. This protects their interests and lets them know that you’ll still be able to make the payments in the event of vacancies.

All that sounds pretty daunting for an investor just starting out, but a couple of alternatives do exist.

First, try your neighborhood bank instead of one of the big players. They may have an interest in building the community, and they’ll definitely have a better idea about the wisdom of your investment. Local people know the local market. Additionally, if you have a good reputation to go with your good credit scores, they may be more agreeable to helping you.

Local mortgage brokers will also help you more than a loan officer at a large bank. Not only can they access bank funds from many sources, many know of private investors who may be willing to help.

Another way to get private financing is through websites such as Prosper.com and LendingClub.com. These sites match investors with individual lenders.

A final choice is owner financing. This was very popular back in the 80’s when mortgage interest rates were high. Then it fell out of favor because almost anyone who could fog a mirror could get a loan – sellers didn’t need to carry paper.

Now it’s coming back into practice as even good, creditworthy buyers are unable to get loans from the big banks.

If either private money or seller financing appeal to you, your job with be twofold. First, you’ll need solid documentation that the investment is a good one. Second, you’ll need to “sell the lender on you.” Individuals who lend money to other individuals want and need to know that they’re dealing with someone who is worthy of their trust.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

No, Debt Collectors Can’t Put You in Jail

December 15th, 2009

stockxpertcom_id185619_jpg_b966e7bcf2a63dcef9b24283177b7745Debt collectors can become pretty aggressive when it comes to strong-arming consumers who haven’t paid their debts, but jail is one threat they cannot make.

That doesn’t mean they don’t try. Some do, and if you want to go through the time and trouble to pursue it, you can bring suit against them for it. You may even be able to find a lawyer who will take the case on a contingency basis. As with any legal case, you’ll have to prove it, so keep copies of letters and record their phone calls.

Under the Fair Debt Collection Practices Act you also have a case against them if they break other rules – such as threatening to sue if they have no intention of doing so, harassing you with phone calls in the middle of the night, calling you at work, and calling your friends or employer.

Something else you may need to prove is the illegitimacy of a debt. You may have had accounts “erased” through a bankruptcy, but that won’t stop some debt collectors from purchasing those debts for a few pennies on the dollar and attempting to collect. If this happens, write them with a copy of your paperwork showing that you are no longer obligated to pay the debt.

A second instance in which you may be hounded to pay is when a family member passes away, leaving debts. Some debt collectors will research to find the next of kin and attempt to convince you that you must pay. Some will threaten legal action while others will attempt to play on your bereavement – telling you that your loved one will not “rest easy” until you’ve paid off his or her obligations.

Industry experts expected to see more than 8,500 lawsuits against debt collectors in 2009. Many of these suits will be filed for the legitimate reasons mentioned here. Others are completely unfounded – showing that there are crooks on both sides of the issue.

So what can debt collectors do if you don’t pay? They can get a judgment against you. If this happens, they can garnish your wages, access your bank accounts, and place a lien on your property.

What they cannot do is access your Social Security or Veteran’s Benefits. The key to keeping these funds safe is to deposit them in a separate account. The bank needs to know that these are Social Security or Disability funds, and if they’re mixed with other income, they have no way to determine which money is which.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

688YHV3XQTN5

Remove Tax Lien Mistake

December 14th, 2009

Q:

How do I remove a PA state tax lien that was filed by mistake? My credit score says that it was satisfied but doesn’t mention that it was filed by mistake.The court house will not change the record even though I have a letter from the state saying it was filed by mistake.
Thanks, Mark

A:

Hi Mark,

I am not sure that I understand why the court house will not update your credit report. I would recommend disputing it with the 3 credit bureaus. If the court house is reporting this information to the Credit Bureaus, then you might have a problem. After you dispute and this lien does not go away, I would get a manager involved at the court house and find out why they will not accurately update the credit bureaus. When I say update,they need to have this negative remark deleted because it was a mistake on the states part.

Dispute here.

CreditScoreQuick.com

Bank Practices Forcing Some Homeowners to Walk Away

December 14th, 2009

stockxpertcom_id179170_jpg_63cd94b2d420b1d0fa6a2d588dbf8838In a 180 degree turn from practices just a few short years ago, banks are making it extremely difficult to get a loan, especially if that loan is a refinance.

The Obama administration’s program to encourage the refinancing of loans owned or guaranteed by Fannie Mae and Freddie Mac was supposed to benefit up to 5 million homeowners whose loans exceeded their home’s current market value by as much as 5%.

Then, this summer, the program was modified to allow refinance of a mortgage as much as 25% over current value.

But the loans aren’t being made as planned.

The Home Affordable Refinance Program, known as HARP, had helped only 116,677 homeowners as of September 30.

The problem? Lender participation is voluntary, and they don’t want to make the loans.

Some homeowners, feeling the pinch because of job layoffs or salary reductions, are trying to refinance to take advantage of the lowest mortgage interest rates since the 1940’s. Dropping from a 7 or 8% interest rate down to 5% rate would save them hundreds of dollars per month and in many cases, allow them to hang on to their homes.

For others, the dark specter of an ARM about to reset is spurring the need for a refinance. For them, a refinance into a fixed rate will likely mean the different between keeping their homes and losing them.

But the banks, citing a need for tougher standards, don’t want to make the loans. There are, however, those who believe that isn’t the real reason. It simply isn’t in their financial best interest to give homeowners lower interest rates if they can manage to make the payments at their current rate.

And that’s probably the same reason that so few have been able to get loan modifications under the administration’s TARP program. They seem to have an attitude that if the person has been managing to make the payment at 7%, they might as well keep on paying at that rate.

The TARP program made it mandatory for banks who accepted bail-out funds to participate in making loan modifications, but as of Sept. 1, only 1,711 permanent loan modifications had been completed. Only 350,000 trial modifications had begun, and some homeowners report that the 3-month trial has stretched to almost a year, with the lender putting them off and repeatedly asking for the same documentation from month to month.

Sadly, the refusal to grant refinance loans or loan modifications is pushing many homeowners into short sales and foreclosures.

The wisdom of these programs will likely not be known for several years, but one thing is certain right now. The less money consumers give directly to the banks, the more money they will have to spend in the marketplace, or to pay other bills that may have piled up during this recession. If the banks held up their part of the bargain this economy just might begin to recover.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

One More Reason to Keep Watch on Your Credit Report

December 14th, 2009

stockxpertcom_id41274181_jpg_99b02117c2577b68fc17ccb29df94106Job layoffs are a common occurrence these days, and employees are scrambling to find new jobs. But those who have traveled, entertained, or purchased office supplies on a company credit card have one more thing to be concerned about.

If your previous employer doesn’t pay that credit card bill, it just might end up on your personal credit report.

As you know if you’ve added a child to your own credit card account as an authorized user, your good credit can help them build their credit scores. But if you default on your credit card, you’ll be harming their credit rating as well.

Thus, the manner in which you were authorized by your employer to use a corporate card will play into whether your credit can be damaged by his or her failure to pay. One loophole that employers can use to shift the blame and the credit harm to an employee or former employee is to claim that the employee didn’t file expense reports on time.

As you might expect, filing expense reports might become difficult if an employee has been laid off – but if this has happened to you, you need to call and find out how to do it. Then document the fact that it has been done.

Another is to claim that the former employee used the corporate card for personal expenses. Thus, it is in your best interests to keep copies of every charge made on a corporate card – along with notations about the reason for the charge. If the card shows charges at a restaurant – document the reason why you were entertaining along with the names of the guests.

Any employee using a corporate credit card should check his or her own credit report to see if that card is shown. If not, then they probably don’t need to be concerned. However, since the economy is in a state of flux and confusion, and since not every company is operating within ethical standards, continuing to check after a layoff is important.

Should that former employer decide not to pay charges incurred by the employee, responsibility for those charges could transfer to the employee. The only safe route is to check your credit report monthly, and to read it carefully.

In the event that charges made on a corporate account do show up, it becomes the former employee’s responsibility to contact the credit bureaus and dispute the account. That’s when the employee’s careful record keeping will pay off.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

Clueless Americans-The Credit Crisis Continues

December 13th, 2009

I found this video on the web and this goes to tell you why our country is in trouble, Wow…….!

CreditScoreQuick.com

Increase Credit Scores Immediately Q & A

December 1st, 2009

Q:

I am retired veteran trying to purchase a house as a first time home buyer my credit scores are in the 590 and have had three garnishments that have been satisfied as of April 09, also had two lates with Bally’s total fitness in May and April  of 09 which the membership has been cancelled but the lates are still reflecting on my credit report, I also have have a 2007 vechicle financed which have made on time payments, what can I do immediately to increase my scores have a deadline to meet by Jan/Feb 2010?

A:

Hello,

It sounds like the recent late payments caused your credit score to drop. It is really hard to determine what needs to be done without looking at your credit report. I will give some tips on what will increase your credit scores quickly. Here is an article I wrote a while back that will give these tips. Also remember late payments will be on your credit report for 7 years. Credit Repair tips here.

CreditScoreQuick.com

Personal Blogs - BlogCatalog Blog Directory

Rebuilding your Financial Life After Bankruptcy

December 1st, 2009

Job layoffs, reductions in work hours, and the real estate crisis have put many Americans into a financial bind in which bankruptcy has become unavoidable. It’s a scary situation, especially when you want and need to get on with your life and you know you may want or need to use credit again in the future.

You already know that a bankruptcy will remain on your credit report  for ten long years. That’s not good, but there is a small “up side” to the situation.

One factor that many don’t consider is that after bankruptcy you may be seen as a better credit risk than before the bankruptcy. This is because you are no longer buried in debt, and because the law prevents you from filing again for 8 years.

This means probably won’t be entirely without credit for those ten years – especially not if you take steps to repair your credit as quickly as possible. You will, however, be subjected to higher interest rates and lower credit lines – especially during the first years.

So what can you do to rebuild your financial life and get back to some kind of normalcy?

The bankruptcy wiped the slate clean, so your task becomes one of building a new and better credit file – so get started right away.

Begin by controlling your spending and saving money in small ways that, taken together, can create a large impact.  Doing so will enable you to stay current with your obligations going forward. This first step is all-important.

Next, begin rebuilding a good credit history. Search for a “bad credit credit card” or apply for a secured card – first making sure the one you choose reports to the credit bureaus. Then use the card sparingly. Charge no more than 30% of your limit and pay the balance in full each month.

If you have a parent or sibling with good credit, ask to be added as a user on a credit card that they use sparingly. Don’t actually use the card to get back into debt. That won’t do you or them any good.

Be sure that all utility payments are made on time – because while they may not report your account in good standing, they will report  if it’s in default.

Begin building a reserve in your checking account, so you’re never in danger of an overdraft, and open a savings account.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

Buying Foreclosed homes – The untold stories……

November 30th, 2009

Buying a home is the American Dream. Everyone would like to have there own piece of homeownership. With the real estate boom dead in the water, the market has become plagued with foreclosures. The chatter all over the U.S. is to “buy a foreclosed home; you will get a great deal.” This is partially true, but there are lots of issues when trying to buy a foreclosed home in this market. Below are some of the issues.

Financing on a foreclosed home

Most people will need a loan with a bank to buy a foreclosed home. Banks don’t particularly like financing a foreclosed home that has problems. While you are out looking for a foreclosed home you will find that these foreclosed homes typically are not in good condition and need some work. This is one of the issues with buying a foreclosed home.

Foreclosed homes purchased “as is”

When you are out looking for a foreclosed home you will discover that a bunch of these homes say “AS IS.” You might be wondering what this means….? Well that means the bank is selling the home in the condition it is in, and will not repair anything. So let’s assume your offer gets accepted, and the appraiser notes there are some issues with the home. A bank will require those issues to be repaired. At this point you are stuck. So make sure your realtor is seasoned and understands what banks are looking for.

FHA loans

F.H.A. loans are the most attractive currently because this loan only requires a 3.5% investment from the borrower. When it comes to guidelines, this loan has higher standards on appraisal requirements. The banks know this, and may not even accept FHA offers. So with this being said, you may be required to go Conventional on your loan which requires 5% down and much higher standards on credit requirements.

Closing Cost assistance from Bank

When negotiating on a home, it’s a common practice to have the seller pay 3 to 6% of your closing costs. This of course depends on the loan type, because some loans only allow 3% seller closing cost assistance. Some banks will not pay anything, and in other situations you might find yourself competing with multiple offers. The offer that is the best obviously wins.

These are some of the real life problems with buying a foreclosed home. Do your research before you buy a home that has been foreclosed. Also make sure your realtor and lender are experienced before using them.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

Disclaimer: This information has been compiled and provided by CreditScoreQuick.com as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.