Top 10 Student Loan Tips for Recent Graduates

Whether you just graduated, are taking a break from school, or have already started repaying your student loans, these tips will help you keep your student loan debt under control.

That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you’re having trouble finding a job or keeping up with your payments, there’s important information here for you, too.

1. Know Your Loans: It’s important to keep track of the lender, balance, and repayment status for each of your student loans. These details determine your options for loan repayment and forgiveness. If you’re not sure, ask your lender or visit http://www.nslds.ed.gov. You can log in and see the loan amounts, lender(s), and repayment status for all of your federal loans. If some of your loans aren’t listed, they’re probably private (non-federal) loans. For those, try to find a recent billing statement and/or the original paperwork that you signed. Contact your school if you can’t locate any records.

2. Know Your Grace Period: Different loans have different grace periods. A grace period is how long you can wait after leaving school before you have to make your first payment. It’s six months for federal Stafford loans, but nine months for federal Perkins loans. For federal PLUS loans, it depends on when they were issued (see details). The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out. Don’t miss your first payment!

3. Stay in Touch with Your Lender: Whenever you move or change your phone number or email address, tell your lender right away. If your lender needs to contact you and your information isn’t current, it can end up costing you a bundle. Open and read every piece of mail – paper or electronic – that you receive about your student loans. If you’re getting unwanted calls from your lender or a collection agency, don’t stick your head in the sand – talk to your lender! Lenders are supposed to work with borrowers to resolve problems, and collection agencies have to follow certain rules. Ignoring bills or serious problems can lead to default, which has severe, long-term consequences (see tip 6 for more about default.)

4. Pick the Right Repayment Option: When your federal loans come due, your loan payments will automatically be based on a standard 10-year repayment plan. If the standard payment is going to be hard for you to cover, there are other options, and you can change plans down the line if you want or need to. Extending your repayment period beyond 10 years can lower your monthly payments, but you’ll end up paying more interest – often a lot more -over the life of the loan. One important option is the Income-Based Repayment program. It can cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after 25 years of affordable payments. Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors (see tip 10 below). To find out more about Income-Based Repayment and how it might work for you, visit http://www.IBRinfo.org. Private loans are not eligible for IBR or the other federal loan payment plans, deferments, forbearances, or forgiveness programs. However, the lender may offer some type of forbearance, typically for a fee, or you may be able to make interest-only payments for some period of time. Read your original private loan paperwork carefully and then talk to the lender about what repayment options you may have.

5. Don’t Panic: If you’re having trouble making payments because of unemployment, health problems, or other unexpected financial challenges, remember that you have options for managing your federal student loans. There are legitimate ways to temporarily postpone your federal loan payments, such as deferments and forbearance. For example, an unemployment deferment might be the right choice for you if you’re having trouble finding work right now. But beware: interest accrues on all types of loans during forbearances, and on some types of loans during deferment, increasing your total debt, so ask your lender about making interest-only payments if you can afford it. If you expect your income to be lower than you’d hoped for more than a few months, check out Income-Based Repayment. Your required payment in IBR can be as little as $0 when your income is very low. See tip 4 for more about IBR and other repayment options.

6. Stay out of Trouble! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can lead to delinquency and default. For federal loans, default kicks in after nine months of non-payment. When you default, your total loan balance becomes due, your credit score is ruined, the total amount you owe increases dramatically, and the government can garnish your wages and seize your tax refunds if you default on a federal loan. For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender right away if you’re in danger of default. You can also find helpful information at studentloanborrowerassistance.org.

7. Lower Your Principal if You Can: When you make a federal student loan payment, it covers any late fees first, then interest, and finally the principal. If you can afford to pay more than your required monthly payment – every time or now and then – you can lower your principal, which reduces the amount of interest you have to pay over the life of the loan. Include a written request to your lender to make sure that the extra amount is applied to your principal! Otherwise it will automatically be applied to future payments instead. Keep copies for your records and check back to be sure the overpayment was applied correctly.

8. Pay Off the Most Expensive Loans First: If you’re considering paying off one or more of your loans ahead of schedule, or trying to reduce the principal, start with the one that has the highest interest rate. If you have private loans in addition to federal loans, start with your private loans, since they almost always have higher interest rates and lack the flexible repayment options and other protections of federal loans.

9. To Consolidate or Not to Consolidate: A consolidation loan combines multiple loans into one for a single monthly payment and one fixed interest rate. If this is appealing, here are some pros and cons to consider. You can consolidate your federal student loans through the Direct Loan program, and this calculator can help you figure out what your interest rate would be. For private consolidation loans, shop around carefully for a low or fixed interest rate if you can find one, and read all the fine print. Never consolidate federal loans into a private student loan, or you’ll lose all the repayment options and borrower benefits – like unemployment deferments and loan forgiveness programs – that come with federal loans!

10. Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you work in certain fields or for certain types of employers. Public Service Loan Forgiveness is a new federal program that forgives any student debt remaining after 10 years of qualifying payments for people in government, nonprofit, and other public service jobs. Find out more at http://www.IBRinfo.org. There are other federal loan forgiveness options available for teachers, nurses, AmeriCorps and PeaceCorps volunteers, and other professions, as well as some state, school, and private programs.

Posted in Uncategorized | Leave a comment

7 Steps to a (Financially) Happy Marriage

All you need is love…..famously penned by Lennon/McCartney paints a pretty picture; however that may not always be the case. Financial Problems is most often listed as the reason marriages end in divorce. Everyone knows, or should know, this, but love and a reluctance to take a hard look at our own financial habits, often keep us from seeing, much less confronting, potential financial troubles in a relationship. Failing to do so can lead to serious trouble.

Before stepping into marriage you need to make sure you are financially compatible. If you can’t have mature responsible conversations about money when you are dating, you are probably not going to be able communicate about finances in your marriage. But starting this type of conversation can be difficult, so to get the conversation rolling, here are seven steps we recommend to steer clear of potential marital money troubles:

1. DISCLOSE FINANCIAL RECORDS Before corporations merge, both sides get a close look at each other’s financial records. Take the same approach before you get hitched. Swap statements for your bank accounts, credit cards, student loans, retirement accounts and so on. Also share credit reports and FICO scores. “Not only can you start to put together a balance sheet of what the two of you own and what your debts are, you can start to discuss ‘do we want to combine our checking account?'”

2. DISCUSS FINANCIAL GOALS A huge part of getting in sync with your spouse begins with discussing major life goals and the necessary financial commitments. Discuss short-term goals, such as paying off credit card debt or buying a car, and longer-term goals such as buying a house, and then craft a budget that sets you clearly on a path toward your goals.

3. BUDGET YOUR SPENDING Failing to create and stick to a mutually agreed budget can lead to marital strife. It doesn’t have to be complicated. Start by listing monthly income. Be sure to add in interest earned on money-market accounts and dividends from any investments. Then add up expenses, from car payments and rent to groceries, gym membership and utilities. If you’re making more than you spend each month, you can begin planning how to set aside money for an emergency fund, and for long-term financial goals. If you are spending more than you earn, it’s time to consider ways to cut spending.

4. TREAT YOUR MONEY AS OUR MONEY Many newlyweds see the money they earn individually as their own, much as if they might merely be roommates. They keep separate bank accounts and pitch in, perhaps equally, or not, to pay bills. But that can lead to problems, especially if one spouse earns a lot more than the other. If both spouses work, arrange for each paycheck to be deposited directly into a joint account used to pay all shared expenses. If you still feel they need to have some of your own money, opening a separate account for each is perfectly fine. The key is that money should come from the joint account, so both spouses know where the household’s money is going.

5. KEEP CREDIT CARDS SEPARATE It’s not necessary to make your spouse a joint account holder on your credit cards, especially if he or she has a poor credit history, which can drag down your own credit rating. Instead, make your spouse an authorized user of your credit cards. This will avoid any potential impact to your credit rating. Authorized users are also able to check account balances and track spending on the card.

6. DON’T SPLIT COSTS 50-50 In marriage as in most other scenarios, money is power. Although splitting household costs down the middle may work early in a relationship, it can breed resentment in a marriage when one spouse makes a lot more money than the other. It also can foster a sense that the person who pays more should have more say in financial matters. Very few things in marriage are exactly 50-50, and this mindset can really start to bring up all of these other issues of fairness. Even if costs aren’t split down the middle, it’s important that each spouse have equal say in money decisions.

7. TALK ABOUT SPENDING Even after you’ve reviewed all the financial paperwork, it’s even more important to find out how your spending habits match up. Often those habits are developed early and are entrenched. One person might have grown up in a family that counted every penny. Another might part far more easily with money because shopping became a hobby. Beyond how much someone likes to spend, there are potential conflicts over what we see as a must-have. Even small differences can become wedge issues. “The central task of marriage is the management of differences, and you want to know early on what these differences are so you can work thru them.

Posted in Uncategorized | Leave a comment

Consumers Still Unclear About Credit Scores

A recent study showed that while consumers understand credit scores better than they used to, many still don’t fully appreciate the workings of credit scores, the value of a high score, and how low scores can be.

Almost everyone knows mortgage lenders and credit card issuers use credit scores in making their decisions, and some people realize landlords, home insurers, and cell phone companies also check consumers’ credit ratings. However, far fewer individuals were aware that many employers checked credit scores as part of pre-employment background screening.

Credit reports and scores are so important to consumers that they should make it a priority to understand them.

Here are some key areas the study showed deficiencies in credit score understanding.

Only 29% were aware of the cost of low scores on a $20,000, 60-month auto loan — a borrower with a low credit score is likely to pay at least $5,000 more than a borrower with a high credit score.

Fewer than half — 44 %— understand that credit scores typically indicate the risk that a borrower will not repay loans, as opposed to the total amount of debts.

Just over half of respondents said that credit repair companies are “always” or “usually” helpful in fixing credit report errors and boosting scores. This is a common misconception. These types of “credit repair” companies often make unrealistic promises and charge for services that consumers can do on their own. There is absolutely NOTHING these companies can do that a consumer can do for FREE.

The best strategy for consumers to raise their scores is by consistently paying their bills on time every month, avoid maxing out their credit cards, and paying down debt rather than just shifting it around.   Simple and Easy.

Posted in Uncategorized | Leave a comment

Keeping a Budget During the Wedding Season

Memorial Day marks the unofficial wedding season. For many this means attending 2-4 weddings this season alone and all those expenses can add up, and crash your budget.

The average bridesmaid spends an average of $1695 per wedding. This includes the dress, travel, gifts and parties. Even if you aren’t a member of the bridal party, 42% of invitees plan on spending between $100-$500 per wedding.

However there are ways, to survive the wedding season with your finances and friendships intact.

Plan for it. Listen, many times you can see it coming. If you have a number of friends in committed relationships, a wedding is probably on its way. Set aside some money each week by making small changes (brown bagging your lunch, hopping the bus instead of a cab), you won’t feel such a hit when the big event(s) arrive.

Selectively gift. If you’re invited not only to the wedding but also the engagement party, shower(s) and bachelor/bachelorette party, you’re not required to bring an equal gift to every event. Give yourself a spending limit at the onset and divvy it up accordingly. Maybe a bottle of wine for the engagement party, a small gift off the registry for one shower and the big kahuna for the wedding.

Group gift. Feel free to split that wedding gift among pals. If you’re in the wedding party or you’ve got a group of friends from college who are all going to the wedding, get an email going with them and suggest that you each contribute $75 to go in on one big gift.

Keep it casual. If you’re hosting a pre-wedding event, you don’t have to dazzle with expensive details. Keep it personal, and quaint. Pick something that matches the couple. If they got engaged in Napa, you could do a wine tasting party.

Split the bills. Sites like WePay (wepay.com) and SplitABill (splitabill.com) make it easy to divvy hosting costs among a group. No badgering for money six months down the road; no waiting for checks to arrive in the mail. Just log on, set up an account and wait for the money to start rolling in.

Be honest. With yourself and your pal who’s marrying. “If this is really going to hurt your financial situation, you need to say no. You are not going to lose a friend—trust me they will understand. Just make sure you are honest, and let them know upfront.

Posted in Uncategorized | Leave a comment

Credit Card Tips for Traveling Abroad

It’s that time of the year when most folks are planning their summer vacation. If you are planning on traveling overseas, here are some helpful tips to protect your credit while abroad.

1. Notify your bank. Before you leave for your trip, let your credit card company or bank know that you will be traveling out of the country. Banks monitor their customers’ accounts for potential fraud, such as an unusual out of the country charge. This can raise a red flag and have your card suspended and your purchases declined.

2. Research foreign transaction fees. It can be expensive to use a credit card abroad. Call the credit card issuing company to check on their foreign transaction fees. Some cards have lower transaction fees than others. However, some can add 3-5 percent to the cost of foreign purchases.

3. Make sure you card will work outside of the US. Not all credit cards are widely accepted in other counties. Research which credit cards are accepted in your destination country.

4. Don’t bring every credit card you have. Do bring a couple credit cards, just in case one is not accepted or is lost or stolen. And remember to bring your debit card. Not all countries permit cash advances on credit cards.

5. Save your receipts. Saving receipts can ensure you are tracking expenses and not being charged for something you didn’t buy. After you return home, be sure to double check your credit card statements. Make sure you are not overcharged on any purchases or see any suspicious charges.

Happy and Safe Travels!

Posted in Uncategorized | Leave a comment

4 EASY Steps to Better Credit

Understanding credit, your credit score, and credit management can seem confusing for many folks. Here I have simplified it by providing 4 simple steps toward better credit management.

Step 1: Know exactly what you are dealing with
The first step towards better credit management is to see a clear picture of your credit profile. Order your credit reports, credit scores and debt analysis online to get a comprehensive current status. Check that the data from TransUnion, Equifax and Experian matches up. Look out for:
• Incorrect mailing addresses
• Inaccurate Social Security Numbers
• Former employers
• Indicators of identity theft
• Errors in your credit accounts
• Inquiries that you don’t recognize

Step 2: Confirm it’s accuracy
Contact your creditors or dispute via the credit reporting companies asking them to correct credit report inaccuracies. The credit companies generally have 30 days to investigate your claim and make appropriate corrections. At TransUnion, you can dispute online, right now – it’s fast and easy.

Step 3: Identify problem areas
Look for troublesome areas on your credit report and plan how you can better manage those accounts and behaviors for credit improvement. If it’s tough for you to pay your bills on time, sign up for an automated payment service. If you carry balances of more than 35% of your available limit on any credit cards, create a payment plan to reduce those amounts. Set goals for credit management and celebrate reaching milestones.

Step 4: Follow up
Check your credit again 30-60 days after you pay off debts to see if your reports reflect credit improvement. If you feel you need to explain anything, add a consumer statement to your credit report.
And make sure you follow up at least once a year to check and confirm your report’s accuracy.

Posted in Uncategorized | Leave a comment

Spring Cleaning: Six Steps to Get Your Financial House in Order

Today is the first day of Spring, and there’s no better time to give your house — including your financial house — a good spring cleaning.

If you want to improve your money situation and take control of your financial future, cleaning up your finances regularly will help you more readily reach your goals — and do so with the least amount of stress. Whether you need to overhaul your budget or get a better handle on your credit standing, there are several things you can do to get your financial house in order this season.

1. Review Your Credit Report

By law, you’re entitled to order one free credit report yearly from each of the three major credit bureaus. You can get yours at no cost from annualcreditreport.com. Make sure your credit reports are free of mistakes because if there are any errors, it’s your responsibility to make corrections when you catch them.
Once you get your credit report, if you see something reflecting wrong information, take the proper steps to dispute and correct the inaccuracies with each bureau.   
2. Organize and/or Shred Old Financial Documents

Sort through your statements, pay stubs, bills and other financial records, and keep only the documents that are absolutely necessary. Since the IRS has up to six years to audit you, keep your tax returns, canceled checks and receipts, and any records supporting your tax deduction for at least six years. If you’re unsure about whether you should get rid of certain types of receipts, scan them or make a copy, then go ahead and shred the rest. But don’t simply toss paperwork in the trash—that could expose you to potential identity theft

By scanning all records and receipts you can keep up with all your financial records, tax returns, warranties on appliances, etc in one location—on your computer. 
Reducing paper clutter will not only help you stay more organized, it will also put your mind at ease. Plus, since the IRS accepts scanned copies of receipts, having those records available could come in handy in the event of an audit.

3. Record Your Financial Passwords and Store Records in a Safe Place

Make sure you’re not using the same password and log in information for all your online bank accounts and other financial accounts. Even though you might be logging in over a secure Internet connection, there’s still a risk that someone who figures out your password will attempt to access other accounts with the same log in information. Protect yourself against identity theft by logging your financial passwords in a document and storing it in a safe place. Also, important financial documents like a will, stocks certificates or bonds should be put in a safe place like a locked box.

4. Review your Budget

Is your budget up to date, or have you forgotten to make changes when you had an increase or decrease in income? Take a close look at your budget to see if you need to make any modifications. Make sure you’re reporting expenses accurately and have made some room for savings account contributions.
5. Analyze Your Insurance Coverage

We all have loads of insurance premiums to pay, ranging from homeowners or renter’s insurance to health care coverage, auto insurance, life insurance and more. The only way to know if you’re still paying competitive rates is to shop around. You might also consider raising your insurance deductibles, where appropriate, to save money.

6. Set up Automatic Bill Pay

Spring cleaning isn’t only about de-cluttering — it’s also about making things more efficient. Set up automatic bill pay, and link it to your primary checking account. Automatic bill pay will eliminate the chances of missing a payment and paying those pesky late fees.

Posted in Uncategorized | Leave a comment

Can’t Pay Your Taxes? Try These Options

If you’re worried you won’t be able to pay your income taxes by this year’s April 17 filing date, don’t panic; but don’t ignore the deadline and certainly don’t wait for the IRS to reach out to you first. Acting quickly not only gives you more repayment options, it can also significantly lower penalties you might owe the government.

By not filing your 2011 federal tax return or asking for an extension by April 17, 2012, the penalty on any taxes you owe increases dramatically – usually an additional 5 percent of taxes owed for each full or partial month you’re late, plus interest, up to a maximum penalty of 25 percent. But file your return/extension on time and the penalty drops tenfold to 0.5 percent.

Eventually, the IRS could even place a tax lien on your assets and future earnings.

IRS tax repayment alternatives include:

Pay by credit card. You will be charged a small convenience fee that is tax-deductible if you itemize expenses. Just be sure you can pay off your credit card balance within a few months, or the interest accrued might exceed the penalty.

Short-term extension. If you can pay the full amount within 120 days, call the IRS at 800-829-1040 and ask whether you qualify for a short-term extension. If granted, you’ll still owe interest but will avoid an application fee.

Installment agreement. If you need longer, an installment agreement will let you pay your bill in monthly installments for up to five years. If you owe $10,000 or less, you’re guaranteed an installment agreement provided you have filed and paid all taxes for the previous five years and haven’t had an installment agreement within that time.

If you owe $25,000 or less and are in good standing, you’ll still likely qualify for a streamlined installment agreement; over $25,000 you still may qualify, but may be required to file a detailed Collection Information Statement.

There’s a $105 fee to enter an installment agreement. It’s reduced to $52 if you set up a direct debit installment plan (or $43 for low-income filers). For rules and to apply, see the “Online Payment Agreement Application” at www.irs.gov or submit IRS Form 9465.

Offer in Compromise. Under certain dire financial-hardship circumstances, the IRS may allow taxpayers with annual incomes of up to $100,000 to negotiate a reduction in the amount they owe through an Offer in Compromise.

To qualify, you must be current with all filing and payment requirements and not in bankruptcy. There is a $150 non-refundable application fee, which may be waived for low-income applicants. You’ll also be required to submit an initial payment with your application.

Please note: Only a small number of offers in compromise are accepted and you should only pursue one after having exhausted all other payment options. For step-by-step instructions, read the IRS Form 656 Booklet.

If you’re unable to make payments on your installment agreement or offer in compromise, call the IRS immediately for alternative payment options, which could include reducing the monthly payment to reflect your current financial condition.

Nothing beats staying current on your taxes, but if you fear you may fall behind, explore these options before the penalties start snowballing

Posted in Uncategorized | Leave a comment

Tips for Working Securely From Wireless Hot-Spots

Wireless (also known as Wi-Fi) hot spots, are changing the way people work. These wireless local area networks (WLANs) provide high-speed Internet connections in public locations, such as coffee shops, restaurants, bookstores, airports, hotel lobbies and more enabling you to work, and search the internet almost anywhere.

But the question is, are they safe?

Public hot spots all have one thing in common—they are open networks that are vulnerable to security breaches. Because they do not encrypt data, your passwords, email messages, and other information can be visible to hackers. That means it’s up to you to be aware of wireless hot spot security and to protect the data on your PC or mobile device.

Following these internet security tips will ensure you are able to work on these wireless networks in a more secure way.

1. Disable your Wi-Fi adapter

When you’re not at home or at work, it’s a good idea to turn off your laptop or notebook’s Wi-Fi capability when you’re not using it. Otherwise your computer might connect to a malicious hot spot without your realizing it. Many laptops now have a Wi-Fi hardware button you can use to disable your Wi-Fi adapter. If yours doesn’t, you can disable your Wi-Fi adapter using your operating system.

2. Choose more secure connections

It’s not always possible to choose your connection type, but Internet security is critical. When you can, opt for wireless networks that require a network security key or have some other form of security, such as a certificate. The information sent over these networks is encrypted, and encryption can help protect your computer from unauthorized access.

3. Protect your email with https

One way to protect your email messages in public is to select the https or other secure connection option in your email account settings (if your email provider supplies one). This option may be called always use https, more secure connection, or something similar. Even if the email provider you use has a secure network, after you log on to your account on a public network, your information is no longer encrypted unless you use a more secure connection. An https connection, for example, which includes encryption, is more secure than an http connection

4. Make sure your firewall is activated

A firewall helps protect your PC by preventing unauthorized users from gaining access to your computer through the Internet or a network. It acts as a barrier that checks all incoming information and then either blocks the information or allows it to come through. Note: Some antivirus software includes its own firewall. If your antivirus has a firewall and it is turned on, you do not need and additional Firewall.

5. Disable file and printer sharing

File and printer sharing is a feature that enables other computers on a network to access resources on your computer. When you are using your mobile PC in a hot spot, it’s best to disable file and printer sharing—when it’s enabled, it leaves your computer vulnerable to hackers. Remember, though, to turn this feature back on when you return to the office.

6. Make your folders private

When the folders on your mobile PC are private, it’s more difficult for hackers to access your files.

7. Encrypt your files

You can protect your files further by encrypting them, which requires a password to open or modify them. Because you must perform this procedure on one file at a time, consider password-protecting only the files that you plan to use while working in a public place.

A few simple precautions can help make working in public places more secure. By selecting the best wireless Internet connections and adjusting settings, you can enjoy more productive and safer work sessions—no matter where you are.

Posted in Uncategorized | Leave a comment

7 Things You Didn’t Know Affect Your Credit Score

We all know to pay our bills on time and carry as little debt as possible, and most of the time, that is all that matters in your credit score. Yet, there are other, smaller factors that many people aren’t aware of that can cause your score to suffer.

Small Unpaid Private Debts   Many people pay their mortgage, credit card and utility bills with unflappable consistency, yet neglect smaller debts. They may feel that these debts are illegitimate or that they will just go away if ignored. For example, municipalities have been known to report unpaid parking tickets and even library fines to credit bureaus. Unfortunately, any unpaid debt can weigh down your credit score.

Tax Liens   You might not think of the IRS as an agency that reports to credit bureaus, but Uncle Sam figured out long ago how to use your credit history as leverage. In fact, these records remain in your credit history for 15 years; even longer than a bankruptcy. If you have an unpaid tax lien, paying it off will certainly help your credit score, but it can’t undo all the damage done by having there in the first place.

Utility Bills   Your electricity bill or gas bill is not a loan, but failing to pay it will hurt your credit score. While these companies won’t normally report their customer’s payment history, they will report delinquent accounts much more quickly than other institutions, so be careful.

Too Many Recent Credit Applications   It can be tempting to sign up for various credit cards that offer some bonus for your business. Banks can offer tens of thousands of points or miles, while retailers grant in-store discounts when you apply for their credit card. By themselves, these applications have an insignificant effect, but too many credit checks in too short of a time period can lower your credit score. To avoid this problem, limit the number of applications for credit, especially when you are shopping for a home, car or student loan.

Long-Term Loan Shopping   Consumers may know that too many credit inquiries will lower their credit score. Nevertheless, to allow consumers to shop around for the best rates on automobile, student and home loans, the FICO will not penalize borrowers who have multiple credit checks in a short period of time. Various FICO formulas negate multiple inquiries with either 14 or 45 days. Therefore, continuing to shop around for a loan over several months will fall outside of this safe harbor and will lower your score.

Business Credit Cards   Do you have a credit card in the name of your business? Nevertheless, almost all banks will still hold you personally responsible for your debts. Furthermore, your payment history is reported to the credit bureaus. Therefore, any late payments or unpaid debts in the name of your business will affect your personal credit, so long as you are the primary account holder on a business card.

Mistakes   Any incorrect information in your credit history can hurt your score. For example, people with common names frequently find other people’s information in their file. In other cases, typos and clerical errors result in adverse information affecting your score. This is one of the reasons why consumers are encouraged to complete soft inquires at least once a year and dispute any mistakes they find.

The Bottom Line   By paying close attention to the decisions they make, consumers can avoid taking actions that seem harmless, but can really hurt their credit.

Posted in Uncategorized | Leave a comment