Personal Credit Score Repair

Is Summer the Best Time to Buy a House?

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There are two ways you can look at determining the best time to buy a house. There’s the best time for you — the time when you have all your financial ducks in a row and are ready for a huge, years-long financial commitment — and then there’s the best time for the market, the time of year when buyers can find the most houses or the best prices.

Is This Summer the Best Time for You to Buy a House?

Given that buying a home is likely the largest purchase you’ll make in your life (until you buy a bigger house, at any rate), whether this summer is the best time for you to buy a house is more important than the state of the market. Unfortunately, this is the more difficult question of the two, mostly because you can’t simply search Google for the answer.

Instead, you’ll need to take a hard look at your current financial situation and ask yourself a few more specific questions, starting with: Do you have outstanding high-interest debt?

We’re not talking about student loans or a low-interest car loan, but credit card debt or personal loan debt should be paid off before you take on a mortgage.

You should also ask yourself if your credit score is high enough to qualify for a loan. Each lender will have its own standards, but a sub-650 credit score can make finding a lender a challenge. Recent bankruptcies or foreclosures can also be deal breakers for many lenders, so you may need to let your credit “season” for a year or two before you can qualify for a loan.

Finally, you need to look at the financial implications of buying a house. Do you have enough savings to make at least the minimum required down payment and pay for closing costs and other extra expenses? While the down payment is the often the biggest upfront cost for buying a house, you may also need to pay for everything from the appraisal to loan processing fees, which can add up to thousands of dollars depending on the price of your home.

You should also consider if you have any large purchases on the horizon that may be problematic if you pilfer your savings for housing expenses. If you have to completely wipe out your savings to buy a house, you should think about waiting a little longer to ensure you can maintain your emergency savings.

Is Summer the Best Time of Year to Buy a House?

While the easier of the two questions to answer, whether summer is the best time of year to buy a home still requires a little more in-depth analysis. There’s the best time to buy to save money, the best time to buy to have access to the most inventory, and the best time to buy for the most convenience.

For example, data shows that summer is typically the most expensive time to buy a house, as an influx of buyers causes property prices to go up. The majority of families prefer to buy and move during the late spring and summer, meaning you’ll be facing the most competition for houses if you choose to buy during peak buying season.

On the other hand, that influx of buyers also comes with an influx of sellers, making summer the best time to buy if you want to have the biggest inventory from which to choose. This is thanks in part to all of the buyers competing for homes — it’s always a good idea to sell while the demand is high — as well as the fact that many sellers are also buyers, with the same desire to move their families while school is out.

In other words, summertime is the best time to buy if you want a lot of selection — and don’t mind paying extra for it. It’s also usually the most convenient time for many families to move, though it may be more difficult (and more expensive) to move thanks to the high demand for things like movers.

If you’re looking to score a deal on your new home and don’t mind slimmer pickings, then you’ll need to wait until wintertime, experts say. Specifically, December and January generally have the lowest housing prices, though they’ll also have the smallest inventories; few sellers want to deal with showings and packing during the holiday season.

The Best Time to Buy a House is When You’re Ready

In the end, determining the best time to buy a house is a very personal decision that should be based on your financial situation and housing needs. If you are financially prepared to purchase a house, then any time of year could be the best time to buy.

 

 

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So You’re Officially An Adult: Finding a Job

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If you recently graduated from college, congratulations! You have entered into the transition towards adulthood, and you are ready to embark on the next step of your future: the post-collegiate job hunt.

While beginning your career can be challenging, with the right tools and some perseverance, the prospect of searching for and securing employment can be incredibly rewarding. Still, job hunting is a complex process, and you may have some questions. Let’s discuss some helpful tips you may not have learned in school that will help prepare you to find, apply for, and acquire your first “grown-up” job.

The Hunt

One might argue that the most difficult part of the job hunt is, well, the hunting. With the job-searching process almost entirely digitized, there is little person-to-person communication. And while jobs can still come via word-of-mouth, those positions are challenging to acquire without an existing foot in the door.

When searching for a job, be strategic and specific. Make a list of all of your varying qualifications and interests, and with the help of a professional or collegiate mentor, brainstorm career paths that might fit. Then, search for positions based on those parameters. Setting up search alert notifications on job websites like Indeed.com and Linkedin will help you stay on top of new opportunities.

Networking is a key part of the process. Reach out to people you know who work in your field, or even people you don’t know who do similar work to what you’re looking for. Industry insider intel will be vital as you evaluate opportunities, and those connections could help you land an interview –– and ultimately the job.

Being the Ideal Candidate

Once you start finding opportunities that suit your needs, skills, and interests, you will need to present yourself as the best possible candidate for the role. In order to avoid major constructional edits to your resume and cover letter every time you apply for a new job, it may be helpful to create categorical templates for different kinds of roles, i.e. “sales resume,” or “marketing resume.” Just make sure you change the name of the file to something less generic before pressing the submit button on an application.

You should also consider making appropriate adjustments to all of your social media accounts. In addition to reviewing your LinkedIn profile, employers often check your Facebook profile, your Instagram account –– anything that could help give them insight into your life. To prepare, you should review your accounts with a critical eye, as if you were an outsider. Make sure you take down any photos or posts that might be interpreted as even mildly inappropriate.

Prospective employers can also review your credit score. In fact, some employers even require it as part of your background check. Nothing is worse than making it to the final stages of the hiring process only to be told that your credit score has disqualified you from the role. To get ahead, it is advisable to find out where your credit score stands, using one of your free annual credit checks from one of the big three reporting agencies.

The Interview

When a human resources generalist or recruiter finally calls you to schedule your first in-person interview, take it as a cue to practice those research skills you’ve been honing during your college years . Do your due diligence in learning as much as possible about the company and the role. This might include researching competitors, current clients, and past work.

Once you think you know your stuff, recruit a friend or a relative to conduct a mock interview. Sample interview questions can be easily resourced online. You might be tempted to rehearse your answers, but in-person interviews are rarely so straightforward. Instead, practice talking through your experience, highlighting your talents, and speaking positively about professional challenges you’ve faced, so you can be prepared for any question that comes your way.

It may seem cliché, but the adage that you should come as prepared with questions for your interviewer as you are with answers is true. Remember, you want them to think you are the best candidate for the role, but you also want to make sure that the role is right for you.

You Got the Job! Now What?

You nailed the interview, and the recruiter called you to offer you the role. Congratulations! Now is the time to celebrate your hard work and your official initiation into the real world. Once you’ve negotiated a salary that you feel good about, you may want to begin planning for the future. Many employers provide a benefits package and a 401(k) program with an employer match (if you’re contributing at the qualifying level).

You may be thinking that saving for retirement is something you can do later, but due to ever-rising life expectancy and increasing cost of living, young people today will need more money than ever to retire comfortably. Creating a savings plan now will save you lots of headaches and stress down the road.

If, after reviewing your credit score. you find yourself feeling overwhelmed and insecure about your ability to find and secure employment, help is available to you. Our professional credit repair services can assist you in making changes that will get you back on track financially, so you can get where you want to go professionally. Contact the experts at Lexington Law today.

 

 

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POLL: What Americans Rely on for College Financing

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With over $1.53 trillion in outstanding debt, student loans are the leading source of debt in America. With 67 percent of jobs currently requiring a bachelor’s degree or higher in America college has become an integral part of starting a career, but with the average 2018 graduate expected to walk off the podium with a staggering $40,000 in debt, it comes at a high price.

With an average repayment term spanning 21 years for a bachelor’s degree holder, many are concerned about the long term effects of living with large debt. Living in debt for a span of 20 years has a major impact on the lives of graduates as they delay major life events in order to pay off their debts. Student loan forgiveness programs are becoming more readily available in the United States, but these programs apply to those whom have made steady payments over a 20-year term.

As the percent of homeowners under the age of 35 continues to drop and the average retirement age rises, the effects of America’s debt problem are starting to show. To determine the state of college financing, we surveyed Americans, asking them what part of college financing is the most reliable, if taking on debt to attend a higher ranked college is worth it and if the student loan forgiveness term should be changed. Our poll of over 3,000 Americans found the following:

  • Americans no longer consider student loans the most reliable form of college financing.
  • 68% of Americans think the student loan forgiveness term should be lowered.
  • Only 1 in 10 of Americans think it’s worth attending a prestigious school over an affordable one.

Americans value cost over rankings when choosing a school

When asked if it is better to attend a highly ranked school on a loan or a college you can afford, 84 percent of Americans say it is better to attend a college you can afford.

84% of Americans would rather attend a college they can afford
Of the 16 percent of Americans who think it is better to attend a highly ranked school on a loan, 58 percent are men and 42 percent are women. 25 percent of men aged 45–54 responded that attending a highly ranked school on a loan is better, making them the most vocal demographic when it came to college rank.

Respondents located in the Northeast United States are also above the national average when it came to recognizing school rank. 26 percent of Northeasterners believe it is better to attend a highly ranked school on a loan than attending a school you can afford.

Americans consider scholarships the most reliable form of college financing

26% of students find scholarships the most reliable way to pay for college

Student loans have often been the most reliable form of college financing as they are easy to secure for any American. With the changing economic climate of student loan debt, we wanted to determine if Americans still found student loans reliable. Only 18 percent of Americans responded that the most reliable aspect of college financing are student loans—making it the least reliable source among Americans.

The most reliable source of college financing for Americans, accounting for 26 percent of respondents, is scholarships. Scholarships are typically highly selective and are time-intensive to apply for, so it is surprising to see so many Americans find them reliable. In fact, as a source for overall college funding scholarships tend to, on average, only cover 20 percent of total education costs.

More women say student loans are the most reliable source of college funding

Of the Americans who think student loans are the most reliable, 58 percent of the respondents are women. A recent study found that women carry two thirds of the national student loan debt in America. With more of the student loan burden falling on women there is some evidence that parents of male student contribute more money than female students. A study by T. Rowe showed that 75 percent of parents of all-boy households prioritized saving for college rather than saving for retirement. In girl-only homes only 60 percent of parent prioritized saving for college over saving for retirement.

When it comes to region, American respondents located in the Northeast are more likely to respond that parent contributions are the most reliable form of college financing. 26 percent of Northeasterners seemed to mostly rely on parent contributions whereas only 19 percent of the rest of the nation responded similarly. Since Northeasterners also place a higher value on a schools rank, it is possible parents in these regions save more money for higher education.

Majority of Americans think the student loan forgiveness term should be lowered

Americans opinions of student loan forgiveness

Living with long-term debt is a major financial burden, especially as Americans plan for major life events. In order to determine how Americans feel about student loan forgiveness programs we polled Americans on how many years the student loan forgiveness program should be set to.

Overall, 68 percent of Americans responded the student loan forgiveness term should be lowered and 32 percent responded that the term should stay the same or be raised. The top response among Americans is that the student loan forgiveness term should be set to 10 years.

68% of Americans think the student loan forgiveness term should be lowered

A common prerequisite for student loan forgiveness plans is that the borrower must have been paying off their debt for a time frame over 20-years. Additional prerequisites apply to student loan forgiveness programs, however many find the time frame is well past a healthy limit.

Although the average student loan plan is set to a full repayment over a 10-year term most Americans are not able to meet that deadline. A study by Citizens Financial Corp found that 60 percent of Americans paying off student loans are expected to repay their debts over a 20 year period. Although lowering the student loan forgiveness program to a five-year term may not be financially stable, forgiveness after a 10-year term seems to be the most popular among Americans.

More men think the student loan forgiveness term should be increased

Between men and women, 64 percent of men responded that the student loan repayment term should be raised in America, whereas only 36 percent of women said the same. Men are also less likely to find student loans most reliable for college financing. With women carrying over two thirds of the total student loan debt in America, it is likely that men perceive less of the long-term effects of student debt than women.

As student loan debt continues to rise in the United States, more people are considering changing how college education is funded in America. With 60 percent of Americans supporting moving towards tuition free colleges there is a growing movement behind education reform. For the Americans who are struggling to keep up with the burden of student loans, there are still options for help. Student loan refinancing and consolidation are both options that can offer different repayment terms and interest rates to help put you on track.



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Survey: What do Americans fear about credit cards?

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Although credit and debit cards are easier and safer than using cash, Americans still have some anxieties when it comes to using their cards online or in public. Credit and debit card processing systems are still not perfect, creating opportunities for scammers to commit fraud. In fact, in 2017 alone $905 million was lost to fraud in America, sparking fear in many. With 32 percent of Americans having experienced fraud in 2017, it is a growing concern on the top of many Americans’ minds.

We surveyed over 2,000 people and found that theft and fraud is the leading fear when owning a credit card and found that:

  • 1 in 3 Americans are afraid to use their credit cards online, even though using a debit card instead of a credit card can leave you more vulnerable to information hacking.
  • Only 20 percent fear overspending on their credit card, even though 1 in 5 Americans currently have more credit card debt than savings.

What are Americans most afraid of about owning a credit card?

As 70 percent percent of Americans have credit cards and an even higher percentage have debit cards, we set out to find out what part of credit card ownership Americans fear the most.

The leading fear of credit card ownership is theft and fraud, accounting for 28 percent of Americans surveyed. However, the remaining results are split with 22 percent afraid of accruing debt, 21 percent afraid of fees and interest, and 20 percent afraid of overspending.

As the average American holds a credit card debt of $6,354, it is not surprising that 22 percent of Americans fear going into debt. Credit card debt is a large issue in the United States as the total amount reached $834 billion in December 2017.

Of those who say accruing debt is their biggest fear, 55 percent were men compared to 45 percent of women. According to a National Debt Relief survey published in 2015, 66 percent of women carry credit card debt compared to 33 percent of men, suggesting women likely fear debt less because it more common for them.

Where are Americans afraid to use a credit card?

As Americans’ largest fear of owning a credit card is theft and fraud, we wanted to find out where Americans are the least confident when swiping their card. Our poll found that online websites are the leading area where Americans are afraid to use their card, with gas stations coming in second.

Although online establishments have become easier to navigate and have tighter security protocols, America is still facing a large online fraud problem. America saw a 40 percent rise in online account takeovers in 2016 from 2015. Online credit and debit card fraud is still the primary leader in all types of fraud because no physical card is needed to complete a fraudulent transaction.

Credit-Card-Fears-6

36 percent of millennials reported that websites are the number one place they are afraid to use a credit or debit card. Considering 67 percent of Millennials preferring to shop online, it’s surprising to hear that nearly 1 in 3 fear using this payment method online.

Second to paying for items online, paying at the pump is 21 percent of Americans largest fear when using a credit or debit card. With new credit card skimming technology on the rise gas pumps are an easy target for scammers to steal credit card information. Americans age 18–24 and 35–44 years old are among the highest age group to report paying at the pump as their largest fear, a surprising statistic given

Credit-Card-Fears-7.a

As Americans spend more and more money using credit and debit cards it is important for industries to tighten down security and focus on the consumer. As an online business, it is crucial for the American consumer to have a checkout system that provides confidence in security. With 22 percent of Americans fearing debt when owning a credit card, it is also up to the consumer to keep better track of their spendings to reach financial success.



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[Study] Americans fail investment literacy quiz

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A 2014 Gallup World Poll study of 15,000 representative adults in more than 140 economies across the globe measured basic knowledge of financial concepts: interest rates, compounding, inflation and risk diversification. This study concluded that only one in three adults are “financially literate.” Specifically, women, those in poverty and lower educated respondents are more likely to be financially illiterate.

If two of three adults around the world are financially illiterate, how much does the average adult know about more specific financial topics like investments and the stock market? To determine how financially literate Americans are in regards specifically to investing, we asked 4,000 American adults four basic questions about stocks, bonds and investments.

Overall, Americans performed poorly. If we were to grade accuracy for the four questions on a lettered scale, much like a report card, the results would be as follows:

01-americans-fail-investment-literacy

Only half of Americans know that bonds are the least risky investment

Only 53 percent of respondents chose the correct answer United States Treasury bonds ‒ when asked about the safest investment type. These bonds are often referred to as “risk-free,” meaning there is nearly no loss possible with this type of investment. Because the Federal Reserve acts as a fail-safe for the federal government, investors can always expect to be repaid by the Treasury Department, even if the government is in debt or low on funds.

02-safest-investment-type

Men are 13 percent more likely to correctly identify the safest investment type. According to a 2016 report, men outperform women on most financial literacy tests. This is due, in part, to level of education, income and culture.

Surprisingly, millennials were the second largest age group to correctly identify the safest investment choice. 61 percent of respondents ages 25–34 chose bonds, just behind 63 percent of those ages 65+.

Young adults’ scores in other financial literacy studies suggest that the age group is not knowledgeable about financial basics. However, the results of our study speak plainly: Americans ages 18–24 are not necessarily the most illiterate when it comes to finance and investment, despite their general lack of real-world experience.

It is important to note that as of 2016, only 20 states were required to include economics in high school curriculum. At the collegiate level, only 3.2 percent of universities and colleges required an economics or finance class for graduation. With college debt continuing to rise, this means many young adults may not have the resources necessary to properly manage their finances and investments in the future. Though they responded to our questions with better accuracy than expected, it is critical to expand education and learning opportunities for young adults in these topics

3 out of 4 Americans don’t understand how bonds work

Though 53 percent of Americans identified bonds as the least risky investment, 75 percent do not understand how bonds work.

The relationship between bond prices and interest rates is classically inverse: as interest rates rise, bond prices fall. Though this seems illogical, the relationship functions similarly to a price war between two companies. The price of the bond adjusts to keep the bond competitive against the current interest rate.

Only 25 percent of respondents were able to correctly answer that the price of the bond would fall if interest rates rose. Instead, most respondents (50 percent) said that the price of the bond would not change at all.

Nearly half of Americans don’t understand financial markets

Understanding the difference between a bull market and a bear market is essential if you want to make a profit investing. We gauged Americans’ knowledge of financial markets by asking about the basic principle behind a bull market: the expectation of rising stock prices.

Bull markets are characteristically optimistic about the future price of stocks. This optimism is based on the perspective of investors, who pursue strong investment results in the form of stock value. Typically, a bull market is recognized after stock prices rise by 20 percent and are therefore difficult to predict beforehand.

Though you shouldn’t make rapid changes to your stock portfolio at the slightest change in markets, making small adjustments can help cushion losses and increase gains. Because bull markets are generally a period of opportunity for investors, it may be wise to take on additional risk during an economic uptick.

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Once again, men outperform women on this question. Women answered with an accuracy of 47 percent compared to men’s 60 percent. Additionally, 40 percent of women believed a bull market is not characterised by optimism about future stock prices compared to men’s 24 percent.

On average, older Americans outperform their younger counterparts on this question. Across age groups, a slight increase is seen in percentage of correct responses. Respondents in the 18–24 age group respond with 38 percent accuracy in the bull market question and respondents in the 65+ age group respond with 62 percent accuracy.

Americans understand when to cut their losses

We asked respondents to imagine that a company they invested in suddenly filed for bankruptcy and then determine what would most likely happen to their stocks in that company. Overall, respondents performed better on this question than the other three, with approximately 64 percent accuracy. Both men and women achieved accuracy over 60 percent and nearly all age groups (the 25–34 age group fell just below at 58 percent).

According to Investopedia, in the event of a company’s bankruptcy, any stocks in the company become worthless. Shareholders may be entitled to liquidated assets by the company, but the stocks themselves cease to hold value.

Though incorrect, 25 percent of Americans think their stocks would be sold to a third party in the event of a company bankruptcy. Though it may be possible to receive some payment in the form of liquified assets, a bankrupt company cannot sell a shareholder’s actual stock in the company for money. Respondents who believe there is a possibility of making money on their stocks even after bankruptcy may be at risk of losing substantial funds if they do not properly prepare for the possibility of bankruptcy in their investments.

Respondents for these investment questions failed three of four questions. From this, we can conclude that financial literacy, especially as it pertains to knowledge of stocks, bonds and general investment, is lacking in the United States. Overall, the youngest respondents and women tended to perform below others.

Knowledge of these financial topics is imperative for participation in the stock market and makes a considerable impact on the country’s economy. Understanding the basic principles behind investment, savings, credit and debt are crucial for Americans and can help boost the overall health of the market as well as individuals’ wealth. Luckily, there are many resources to help you understand these topics in better detail, including investment websites, loan calculators and credit repair help.



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When is it Time to File for Bankruptcy?

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The decision to file for bankruptcy is not one to be taken lightly. The financial and credit ramifications are huge, and the real costs can go well beyond the initial filing expenses. At the same time, if you’re struggling with unsecured debt that you have no hope of paying off, bankruptcy can be a viable and potentially worthwhile solution.

Whether you need to file for bankruptcy will depend solely on your personal financial situation; The fact that your friend, family member, or favorite online blogger promotes filing for bankruptcy should have no influence on whether you choose to file. Instead, you need to take a long look at your individual financial situation and ask yourself three important questions.

  1. Is Bankruptcy Really Necessary?

Filing for bankruptcy is not something that should be done simply to pay off a few credit cards, and it isn’t a magic solution to pay off an auto loan or mortgage on which you’ve fallen behind.

Filing for bankruptcy is a serious legal proceeding that has long-term financial ramifications that can take years to overcome. In fact, a bankruptcy discharge can sit on your credit reports for up to 10 years, dropping your credit score by dozens if not hundreds of points. This will severely limit your ability to obtain new credit cards or loans, and what credit you do obtain will typically charge high rates and fees.

Furthermore, a recent bankruptcy can disqualify you entirely from obtaining a home mortgage loan, even if you intend to use a government-insured loan like an FHA or VA loan, making it necessary to wait several years after filing to attempt to obtain a mortgage. Depending on how low your score drops after filing, you may need to wait even longer for your credit to rebound before you can buy a house.

In other words, if you have any other options for getting your debt under control, you should explore them long before you seriously consider filing for bankruptcy.

  1. Will Bankruptcy Actually Help?

The types of debt you can discharge through bankruptcy will depend on the type of bankruptcy you file, and some types of debt can’t be discharged through any form of bankruptcy whatsoever.

Specifically, Chapter 7 bankruptcy — also called liquidation bankruptcy — can only be used to discharge specific unsecured debts like credit card or medical debt. Secured debts or other legally protected debts cannot be discharged through Chapter 7 bankruptcy. The list of non-dischargeable debts includes:

  • Auto loans
  • Home mortgage or property liens
  • Most student loans
  • Back taxes
  • Child support payments
  • Alimony payments
  • Government imposed restitution, fines, or penalties
  • Debt from fraud or embezzlement
  • Debt from willful and malicious acts

Furthermore, while you can’t discharge auto or mortgage loans by filing for Chapter 7 bankruptcy, the bankruptcy process can result in the liquidation of your assets — which can include your car and house. This means you could lose your home or vehicle by filing for Chapter 7 bankruptcy.

If you’d like to retain your assets and/or don’t qualify for Chapter 7 bankruptcy, the next common option is Chapter 13 bankruptcy, also called reorganization bankruptcy. However, filing for Chapter 13 bankruptcy won’t actually result in any of your debts being discharged. Instead, you’ll be given a three- to five-year repayment plan based on your income and debts.

  1. Do You Have a Plan to Rebuild Your Credit After Filing?

The final question to ask yourself before deciding to file for bankruptcy is whether you have a plan in place for what happens after your bankruptcy is complete, particularly if you file Chapter 7 bankruptcy and discharge your current credit lines. That’s because bankruptcy tends to tank your credit score, which means rebuilding your credit will need to be a priority — and it won’t be easy.

Qualifying for new credit with a fresh bankruptcy discharge on your credit reports will be an uphill battle, and you’ll likely need to turn to pricey subprime credit cards or deposit-required secured credit cards. You may also have challenges qualifying for non-credit related needs that involve a credit check. This can include applying for housing, like a new apartment, as well as necessities like utilities and cellphone plans.

Bankruptcy as a Last Resort

If, after asking yourself these three questions, you still believe that bankruptcy is the right option to deal with your debt, then you’ll need to now decide how to tackle it. While you can legally file for bankruptcy on your own, the data indicates that you’ll have significantly more success by hiring a professional to file on your behalf. Bankruptcy is a complicated legal process with wide-spread consequences, and hiring a professional is often well worth the additional financial costs.

 

 

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How to Back to School Shop and Not Ruin Your Credit

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How to Back to School Shop and Not Ruin Your Credit

Posted by Erica Steeves on August 10, 2018

 

It’s back to school time! Typically, this is an exciting time of the year (for everyone but students, that is), but even now parents are feeling the pinch because of all the supplies, clothes and other materials their kids need for class. According to the National Retail Foundation, the average household spends about $700 on back to school items, and certainly, this output can significantly increase if your child is heading off to college and is going to need books, a computer, etc. So how do you keep your spending in check and not kill your credit? Here’s a look at some tips:

The Right Way to Back to School Shop

  • Needs vs. wants: There are things that your kids need and things that your kids want. Try to focus on the “needs” first, and then if your budget warrants it move on to the “wants.” Or you could make your kid pay for their “wants” themselves as a good lesson in financial responsibility.
  • Shop for deals: Don’t wait until the week before school starts to shop – start now. While many retailers offer back to school sales all month, you might be able to score deep discounts on clothes one week, school supplies the next and electronics the week after that. Browse the ads for sales and shop smart. Beyond this, many states offer “tax-free” days each year, where certain items (including school supplies) are eligible for purchase minus any sales tax. This is another great way to save. Visit www.TaxAdmin.org for more information on this. Does your child need to buy their own textbooks? Try buying them used or rent them off Amazon.com to save.
  • Try not to carry a credit card balance: Back to school shopping can amount to be a considerable expense. Using a credit card to pay for such a purchase – and then letting the balance carry – can potentially add as much as 50 percent to your back to school purchases. Remember, for the best credit score, you want to try to keep your credit utilization ratio at or below 30 percent. Between interest and the cost of back to school shopping, it would behoove you to pay off your card in full by the due date.
  • Check for student discounts: If you’re doing more expensive back to school shopping, say like a laptop or tablet from a consumer electronics store, make sure you inquire about a student discount. Many offer student discounts of up to 10 percent. Discounts are also commonly offered on computer software.
  • Only shop credible websites: If you’re doing back to school shopping online, be wary of having your information stolen. Identity theft is no joke, and certainly, the Internet has empowered a new type of hacking. On that note, make sure that you’re only shopping over a secure Internet connection and only doing business with sites that have a security icon next to the address bar. Additionally, never share your credit card information on a site without “https” at the beginning of its domain. The “s” in “https” stands for “ “security.”





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The Real Reason Why So Many Millennials Are Living at Home

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Millennials are blazing the path to a new way of a life. They are adapting to a different mindset compared to past generations, and are often defying the predictions of researchers.

The typical American lifestyle is being turned on its head. With this generation reaching adulthood, it was assumed that the next logical step would be to buy a home and start a family. After all, that’s the “American Dream,” right? Yet, most millennials are putting marriage and children on hold, and many are actually finding it’s in their best interests to keep living at home.

Over one third of Americans between 18-34 years old are living in their parents’ house. Society as a whole is being affected by this living situation, so they want to know why? Why are millennials seeking comfort under the roofs of their childhood homes?

As we will see, the answer may lie in millennials’ newfound beliefs and values, different economic circumstances, and even their unique upbringing.

Change in status quo

Modern society is witnessing a complete shift in young adult behavior, change a status quo that has defined what’s “normal” for decades. Following are just three examples of lifestyle changes common to the millennial generation that may help explain why so many are still living at home.

What they value

What does it mean to be an adult? For past generations, important rites of passage included marriage, buying a house, and having kids. Yet, for many millennials, educational and economic achievements are the true milestones. Rather than viewing becoming a “provider” as key to maturity, their journey to adulthood hinges on personal accomplishments. Millennials are intrinsically driven to get that college education, jumpstart their careers, and achieve financial stability. Then, once they’ve become personally established, pursuing a family may come into play. With this reassignment of values, living at home is the ideal option because it keeps expenses and home responsibilities light while priorities are elsewhere.

Age of marriage

In 1985, the average ages for an American man and a woman to wed were 25.5 and 23.3 respectively. In 2016, only 20% of Americans between the ages of 18-30 were married. This eyebrow-raising statistic clearly sheds light on millennials’ reluctance to jump into matrimony. This delay in walking down the aisle is yet another reason why many millennials are living in their parents’ house. Marriage and buying a house often go hand in hand. So, with so many young adults focusing on pursuits other than marriage, staying with Mom and Dad is a simple and inexpensive alternative. 

Delay in having children

In the U.S., women earn the majority of bachelors, masters and doctorate degrees. Understandably, most of these dedicated young women have chosen to remain childless while pursuing educational and career goals. With the average age of first pregnancy rising from 24.9 in the early 2000’s to 26.3 in 2016, this is another life event that is feeling the push. Yet again, the best living situation is to stay at home, especially while still being in school.     

The fault of the economy

Whether it’s the current state of the economy or the backlash of a crisis years earlier, the economy plays a key part in shaping millennials’ behavior. They have adapted to a cautious and calculated approach when faced with life decisions.

The burden of student loans

The cumulative student debt in the U.S. has reached an all-time high of $1.3 trillion. This staggering number helps explain why millennials’ disposable income is being poured into paying back the banks instead of into the housing market. Living at home permits millennials to avoid additional risk and expense associated with buying and maintaining a home, allowing them to build up their own nest egg.

Backlash from the recession

Even though the recession seems to have happened eons ago, millennials are still feeling the heat. Financial habits and attitudes about saving, spending, and managing money have all been influenced by the 2008 crisis. In fact, 78 percent of millennials admit that the recession had an influence on their decision not to buy real estate. Their risk-averse behavior is a huge contributing factor to why they only want to buy a house (and move out of Mom and Dad’s place) once they feel financially secure.

How they were raised  

The famous idiom states that the apple doesn’t fall far from the tree, but, what if the opposite is actually true? Parents belonging to different age brackets are interestingly raising their children differently than they once were. This, in turn, has molded millennials in a new way.

Helicopter parenting

A term often used in discussing millennial upbringing is “helicopter parenting”. The phrase describes parents who “hover” over their children, in a constant state of readiness to swoop down and save them at a moment’s notice. This protective stance may explain a lot about the millennial generation. Perhaps the large number of young adults living at home is just another result of helicopter parenting and the sense of security and reliance it engenders.

Wanting to provide a different life

Being part of different generational demographic, parents of millennials experienced a whole different upbringing. Baby Boomers, for example, were taught to be work-centric, independent and competitive. All these traits led to a more conservative and career-oriented lifestyle. However, many parents who were brought up that way are teaching their own children the opposite: Instead of pushing them to get a well-paid job, it’s now more common to encourage a well-loved job. With almost a third of college students changing majors within their three year program, parents are clearly supporting the “follow your heart wherever it may go” ideology. Among other things, this change in parenting tells millennials it’s okay to live at home.

What this all means

Let’s paint the whole picture now. Millennials were brought up in an unconventional manner, shaped by unique economic conditions and embracing a lifestyle very different from their parents and grandparents. With all these factors in effect, the reason millennials are still living at home could simply be because it strategically fits in with society’s current norm. As researcher Derrick Feldmann suggests, “It’s not a reflection on the millennials; it’s a reflection of where we are as a society.”

 

 

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So, You Are Officially an Adult: Finding a Place to Live

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Navigating adulthood post-college can be tricky, especially from a financial perspective. One of the first major life choices you need to consider after graduation is housing. Whether you plan to rent or own an apartment, condo, or house, you should expect your lender or landlord to ask for your credit score. Your credit score indicates prior financial responsibility and too low of a score can negatively impact your options.

How to Check Your Credit Score

Before applying for any housing, you should have a good understanding of what your credit score is and how it compares to the average number.

Luckily, you are entitled to one free copy of your credit report every twelve months from three different nationwide credit reporting companies: Equifax, Experian, and Transunion. You can order your credit report online at annualcreditreport.com or call 1-877-322-8228. Prepare to provide your name, address, social security number, and date of birth to verify your identify.

This credit report will include your credit score and reasoning for your score. If you have unpaid medical bills or overdue credit card balances, they will appear on your report. You are allowed to dispute any items on your credit report that you believe are inaccurate.

What Will a Landlord or Lender Expect?

Before getting into the specific numbers landlords or lenders expect, it is important to reference the standard credit score range. (The following range is using the popular FICO score, however there are other scoring formulas in use. You will want to inquire of your lender or landlord which scoring convention they will be using to be prepared.)

Credit Score Range

  • 500-579 = Bad credit score
  • 580-619 = Poor credit score
  • 620-679 = Fair credit score
  • 680-739 = Average credit score
  • 740 and higher = Great credit score

You can assume that if your credit score is categorized as “bad” or “poor”, you may have difficulty. However, most housing loans and landlords use 620 as a minimum. If your credit score falls below 620 and you plan to buy a house, you may be asked for 10 percent down payment, as opposed to the standard 3.5 percent. Some landlords may not rent to you altogether. If you fall below 620 you may want to consider investing in professional credit repair services and, if possible, delaying your move.

finding a place to live

How to Increase Your Credit Score

If your credit score is lower than you would prefer, there are several ways to improve it. Your highest priority should be fully paying any outstanding bills on your report. Next, begin paying off any credit card bills or debt you have. If student loans have started to come in, pay (at least) the minimum amount on time, every month. If you have a credit card, make it your goal not to spend more than 33 percent of the available credit and pay off your full balance, every month.

If you do not already have a credit card, getting one is a recommended way to increase your credit score. You do not need several, just one to build a positive credit history. Look for credit cards that are created specifically for young people.

Considering a Co-signer

If your credit score is not high enough for your housing choice, many lenders and landlords will accept a co-signer. A co-signer is a person with acceptable credit who agrees to guarantee payment of your debt if you cannot do so. While this is a large responsibility, it is an extremely common practice. Consult your parents, other family members, or a trusted partner, then discuss your options with your lender.

Finding your first post-college home is an exciting experience for new graduates. In order to fully prepare yourself for the financial expectations involved, educate yourself on all things credit.

 

 

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POLL: How much do Americans know about retirement preparation?

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Retirement is an area that is full of confusion and uncertainty for most Americans. With conflicting online options regarding best practices, it is easy to get lost in how to correctly plan for retirement.

But does the average American know this information? We decided to find out. Our poll of over 3,000 found the following:

  • 70 percent do not know the age at which social security benefits starts.
  • Less than half know how much of their earnings they should contribute to retirement savings.
  • 83 percent expect to spend more than $3,000 per month in retirement.

In its current form, social security operates on a sliding scale of monthly benefits depending on which age you begin retirement. The Social Security department lists full retirement ages depending on the year of which you were born. For Americans born after 1960, the full retirement age is listed as 67. But, the The youngest you can start earning social security benefits is actually at the age of 62. This is the age where you earn 75 percent of the total allocated benefits.

Retirement Knowledge Survey_when americans think social security starts

Only 30 percent of Americans surveyed know the correct age that Social Security benefits begin. For some, there may be a mentality that social security starts when it offers its full amount of benefits. The confusion may come from the fact that after you turn 62, the percentage of total benefits increases eachmonth until the age of 66 where it pays out at 100 percent. Additionally, the Center for Retirement Research reports that 27 percent of women and 34 percent of men wait to begin claiming social security benefits from the age of 65–66, which may also be why people misunderstand the age it begins.

Retirement Knowledge Survey_what age does social security kick in copy

Why is everyone confused about social security?

Most Americans may also believe that social security starts at the age of 65 because it is also the first year you can withdraw from a 401k or an individual retirement account penalty free. As many people associate the retirement programs with social security it is not without reason to understand that 65 was the most popular choice.

The third most popular social security age answer by Americans, collecting 11 percent of total responses, was the age of 67. Social security benefits reach 100% of the total allotted amount at the age of 67.

How much do Americans think they need to contribute to retirement?

America is split when it comes to the ideal percentage of earnings contributed to retirement. The percent of your earnings you should save dependents on a wide range of factors including how early you begin to save, how much money you earn when you plan on retiring and what quality of life you expect when you retire.

Retirement Knowledge Survey_what percentage of earnings

When asked what percent of earnings people should save for retirement, less than half knew you should save between 10 and 15 percent. Most financial advisors suggest that you should save 10 to 15 percent of your yearly earnings to a retirement program starting in your early 20s. However, if you do not start contributing to savings early in life you should be contributing even more. Vanguard reported the average deferral rate among users of their platform was 6.2 percent in 2016, and 44 percent of all accounts only contributed 3 percent of their salary.

When it comes to how much you should contribute to retirement, Americans are split among contributing 10 percent and contributing more than 30 percent. For younger Americans, planning for retirement does not seem to be their top priority. In fact, 35 percent of 18–24 year olds think you should only be saving less than 5% of your earnings for retirement.

For someone who makes around $50,000 each year until they retire, 5% savings would only leave them with a little over $100,000 at the age of 62.

32 percent of Americans aged 25 to 34 years olds answered that you should be contributing over 30 percent of earnings to retirement. This may be a sign that many feel overwhelmed when they first start to save. For Americans contributing to retirement savings later in life, it can come as a shock of how much you actually need to retire. With other priorities such as student loan debt and credit card debt upon entering into the workforce, it can be hard to decide between contributing to retirement and paying down debt.

The general rule for retirement is that you should have saved 8 to 10 times your salary by age 67. This savings approach will leave a large enough of a nest for general retirement spendings to live a quality life and to bridge the gap between social security and actual retirement costs.

When we compare what Americans are planning on spending in a month during retirement by region we can see some general trends. For the most part Americans agree on how much they are planning to save, with the majority of Americans planning on spending under $4,000 a month.

If someone making $50,000 per year was only saving 5%, they’d have about $48,000 per year if they spent $4,000 every month. This would leave them without any funds after two years.

Our study found that on average men tended to plan on spending less money in retirement than women. The difference in costs among men and women can be extreme with products marketed towards women costing 48 percent above the male equivalent, which can point to the reason women plan to spend extra cash.

Retirement Knowledge Survey_retirement planning by gender

For most Americans, the path to a healthy retirement lies between cutting down on debt and contributing the most amount of money early in life to retirement. Although retirement for many Americans is still a distance away, it is important to start planning early. As retirement is still a difficult area for many Americans to plan there is a growing need for many to practice better financial planning and overall retirement literacy.



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