Apartment Complex Orders Tenants to Like Its Facebook Page, Or Else…

facebook addendum

Leases can be chockful of fine print, but a move by one Salt Lake City apartment complex may have apartment dwellers reading their next one very carefully before signing on the dotted line.

City Park Apartments presented tenants with a “Facebook Addendum” late last week that requires them to like the building on the popular social media site within five days or otherwise be considered in breach of their lease, KSL-TV reports.

The addendum, which was taped to residents’ doors, also reportedly includes a release that would allow the complex to post pictures of tenants and their visitors on their page — and a clause that prevents residents from posting anything negative about the community on any public forums or pages.

It was brought to KSL’s attention by a tenant who considered the addendum “outrageous” and a “violation of my privacy.”

City Park Apartments did not immediately respond to Credit.com’s requests for comment. Its Facebook page, which boosts a 1.1. star rating, is currently riddled with reviews from people calling the complex out on the new policy.

“This is one of the most absurd requirements I have EVER heard,” one Facebook user wrote.

Facebook did not immediately respond to questions about whether it had any policies pertaining to this type of situation.

Attorney Zachary Myers told KSL, however, that the City Park Apartments’ addendum had a few potential broader issues.

“The biggest issue that I have with it is that it seems to be discriminatory against elderly individuals and disabled individuals who are unable to utilize an online presence such as Facebook,” he said.

Attention, Apartment Shoppers

Myers also told KSL that the complex may not be able to require tenants who already signed a lease to put their John Hancock on the add-on. Once you do sign the addendum, however, you could be legally beholden the terms, he said — a comment that underscores the importance of not blindly signing anything your landlord — or companies in general — put in front of you. You’ll want to be aware of any clauses that you may not agree with.

And, of course, if you’re in the market for a new apartment, you should check your credit. Most landlords pull a version of your credit report when deciding who to rent you and you don’t want any errors or surprises to cause you to miss out on a lease that aligns with what you’re looking for in an apartment. (You see where your credit currently stands by pulling your reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.)

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Mandi Woodruff to Join MagnifyMoney As Executive Editor

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MandiHeadshotEnriqueWe are pleased to announce that Mandi Woodruff will be joining MagnifyMoney as Executive Editor on June 15th.  Mandi will be joining us from Yahoo Finance, where she was a reporter covering all areas of personal finance. Prior to Yahoo, she was the personal finance editor for Business Insider.

Through in-depth investigative features on industries such as payday lending and for-profit higher education to her smart and her witty weekly video series “The Payoff”, Mandi has distinguished herself as a tireless consumer advocate and a leading millennial voice. She regularly appears as an expert on programs such as Good Morning America and CBS This Morning and recently debuted her own weekly podcast, Brown Ambition.

Mandi’s commitment to financial literacy and her unique investigative voice will be a perfect fit for MagnifyMoney, a rapidly growing personal finance website dedicated to providing unbiased, actionable advice.  Since launching two years ago, MagnifyMoney has emerged as a trusted resource for hardworking Americans.  Mandi and her editorial team will continue that mission by holding financial institutions accountable and simplifying complicated decisions for readers.

“Mandi is a perfect fit and an excellent brand ambassador for our company,” said Nick Clements, CEO and co-founder of MagnifyMoney. “When we launched in 2014, our goal was to bring increased transparency to personal finance and to make it easier for people to make better financial decisions. Creating excellent, unbiased personal finance content is at the center of our mission, and I can think of no one more qualified than Mandi to lead our efforts.”

“I couldn’t be more thrilled to join the MagnifyMoney team and head up what is sure to be a stellar editorial team,” said Mandi Woodruff. “I respect their mission to demystify the world of personal finance for the masses. I’m eager to join their team and continue to help grow what is quickly becoming one of the most trusted sources for financial information online.”

Mandi is an alumna of the Grady College of Journalism at the University of Georgia and an active member of the National Association of Black Journalists, the New York chapter of NABJ, the Society of American Business Editors and Writers, and the Journalism & Women Symposium.

 

 

 

 

 

 

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Pay for Delete Letters: Do They Work?

Businessman Holding Document At Desk

Are you looking to clean up your credit report? Have you recently discovered a delinquent account on your report that you were unaware of until now? Then you might be considering using a pay for delete letter to get this negative mark off your credit report.

There are a few important things you need to know about pay for delete letters – namely, what they are, how (and if) they work, whether or not they’re ethical, and what other credit restoring options are available to you.

What is a Pay for Delete Letter?

Say you have a delinquent account or two on your credit report, and these accounts are bringing your credit score down. You can send a pay for delete letter to the collection agency that purchased your debt. This letter requests that the account be deleted from your credit report upon being paid either in full, or for a settled amount.

It’s essentially as the name describes – debtors pay the collection agency to get the negative mark to disappear from their credit report. Once the mark is lifted, their credit score will likely rise.

Why is this a tactic some people choose to use? Even if you pay the balance in full, the negative mark still stays on your credit report until seven years from the date of delinquency have passed. Those who don’t wish to wait that long turn to pay for delete as a quicker solution.

Keep in mind that pay for delete letters generally have a much higher chance of success if you’re dealing with the collection agency – not the original creditor. So if your credit card with Chase is past due, and your balance has not been charged off yet, a pay for delete letter may not work. Generally, the lower the balance, the easier it might be to obtain a pay for delete. We offer a few alternative solutions below that might work as well.

Note that a pay for delete letter doesn’t delete your debt. You’re only asking for the account to be deleted from your credit report. Most people use pay for delete letters when they know they owe the debt, but due to unusual circumstances, were unable to pay at the time.

A good example of when to request a pay for delete is if you moved and you never received a bill due to changing addresses. You legitimately owed the balance, but you were never aware of it. This doesn’t exactly make you an irresponsible consumer, it just means there was an error along the way and an account ended up delinquent.

The same goes for owing medical debt when you thought your insurance was covering the bill because you never received a request for payment.

In both situations, you technically owe the money, but through no fault of your own, you were never notified of the debt, so you didn’t pay. Debt collectors are more likely to be understanding in such a situation. Just make sure to have proof (such as a change of address) that might help your case.

However, if your credit card balance was charged off and you simply never paid it because you didn’t have the means to, you may be less likely to get a pay for delete approved.

To see an actual example of an effective pay for delete letter, take a look at the myFICO forums. The Credit Karma forums have a slightly different example that may help you craft your own. Note that some pay for delete letters may outright deny the debt is yours; this is not something we recommend as you shouldn’t be lying to collection agencies if you truly owe the debt.

Can a Pay for Delete Letter Help You?

A pay for delete letter won’t necessarily hurt you, but it’s not guaranteed to help you, either.

That’s because collection agencies don’t have to respond to your letter if the debt is accurate. Furthermore, if you write a pay for delete letter and only obtain a verbal agreement from the collection agency, and you pay, they may not honor your request. The negative mark could remain on your credit report. Even worse, the debt could be sold again, and a new collection agency may ask you for payment.

Unless you get a response from the collection agency in writing, you’re out of luck if the agency doesn’t make good on removing the information from your credit report. They’re not obligated in any way to agree to a pay for delete.

Before you even write a pay for delete letter, send a debt validation letter to the collection agency to ensure the information it has on file is accurate. It may not legally be allowed to collect on the debt, so it’s important to start here before offering to pay, otherwise, you risk paying the wrong company.

If the debt is proven to be valid, and you agree that you owe the balance and want to pay it off to get it deleted from your report, you may actually have more luck calling than writing a letter.

Keep in mind that if it comes to that, you should never agree to pay anything over the phone. Always get things in writing when dealing with a debt collector. In most cases, offering to pay in full will typically result in a pay for delete agreement much more often than offering to pay less than the original amount owed.

Are Pay for Delete Letters Ethical?

Pay for delete letters have been labeled as a shady practice, and for good reason: it requires that collection agencies misrepresent the accuracy of their reporting to credit reporting agencies. That means collection agencies are in violation of the service agreement they have with credit reporting agencies if they accept a pay for delete.

Overall, pay for delete is detrimental to the fundamental purpose of the credit reporting system. If someone was unable to pay their balance and their account was sent to collections, paying after the fact and getting the account erased isn’t an accurate representation of his or her credit history. If a lender looks at said person’s credit report, it might deem him worthy to lend to when he’s been irresponsible with credit in the past.

To be clear, pay for delete letters are not illegal. However, remember that collection agencies aren’t required to acknowledge your request; they’re under no obligation to agree to a pay for delete.

Some will because they would rather get paid, and others might agree to settle on a lower amount because they don’t want the hassle. Don’t get your hopes up, though.

In general, we recommend being honest and not trying to game the system. Pay the debts you owe fair and square. If you find any information on your credit report that isn’t accurate, then use the steps outlined in this Credit Repair eBook to help you restore your credit to good standing.

Recommended Credit Boosting Alternatives

A goodwill letter is a good alternative to start with. It’s different from a pay for delete letter in that you’re admitting you were in the wrong, and are asking for forgiveness. A goodwill letter typically works well if you made a late payment, or if an honest mistake occurred and you’re trying to get it corrected. If you’ve had an account in collections for years, the chances of this alternative working aren’t as a great, but it doesn’t hurt to try.

If the collection agency is unwilling to do a pay for delete, they may be willing to settle for the amount owed. What this means is the negative mark will stay on your credit report (until seven years from the date of delinquency have passed), but it will show as “paid in full” or “settled,” depending on the arrangement agreed upon. This might not be as ideal as having the entire account knocked off your report, but it’s a minor improvement over having an unpaid debt on there.

Depending on the FICO scoring model being used, paid collections can improve your score and your chances of getting approved for a loan. FICO 9 won’t penalize you for paid collections accounts, but you will get dinged for unpaid collections (the exception is medical debt). FICO 8 doesn’t take unpaid collections under $100 into account.

Remember that information on your credit report will fall off after seven years. If you just found out about an unpaid debt because you checked your report, and the debt is several years old, you might be better off waiting it out as long as you’re not in the market for a loan anytime soon. The older a collection is, the less of an impact it has on your credit score, too.

Of course, you should also continue to do what you can to repair your credit. You might need to wait out the seven years it takes for black marks to fall off your credit report, but in the meantime, you should take action to maintain a good score for the future. Pay on time, don’t max out your credit lines, and borrow responsibly.

Conclusion

You can’t bribe your way to a perfect credit report. If the information on your credit report is accurate, then you should bear the consequences. Pay for delete letters aren’t guaranteed to work, and it can be difficult to try and get a collection agency to agree to it. Keep proving that you’re a responsible consumer using the methods outlined in this article, and hopefully your actions will show lenders that you’re a reformed consumer.

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iTunes Gift Card Scams Are Flourishing

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iTunes gift cards have become a common tool for online scammers to wring money out of victims, according to new warnings from Apple and U.S. federal authorities.

One agency received a deluge of complaints during a recent weekend, including word from one victim who lost $31,000 in a recent iTunes payment scam, according to the Federal Trade Commission.

The agency said the problem has grown so bad that Apple recently posted a notice on its gift card page:

“iTunes Gift Cards are solely for the purchase of goods and services on the iTunes Store and App Store. Should you receive a request for payment using iTunes Gift Cards outside of iTunes and the App Store please report it at ftc.gov/complaint.”

Apple did not immediately return a request for comment.

Criminals convince victims to buy iTunes gift cards, either online or in a store, and then email the secret code so the value can be drained — or traded.

“As soon as you put money on a card and share the code with (scammers), the money’s gone for good,” the FTC warned in a blog post.

Karen S. Hobbs, an attorney with Federal Trade Commission’s Bureau of Consumer Protection, said scammers like iTunes gift cards because they are “cash-like” in a few critical ways. It’s pretty hard to reverse an iTunes payment — unlike a credit card payment — and movement of iTunes dollars can be virtually untraceable. (See more reasons consumers fall for scams here.)

With any fraud scheme — from sweetheart scams to fake IRS tax bill scams — a criminal’s biggest challenge is getting paid. Wire service payments are their preferring method, because wire payments are generally impossible to reverse. But apparently consumers are slowly heeding warnings about wire services, leading criminals to turn to other payment methods.

iTunes gift cards aren’t the only alternate money system scammers have adopted. The FTC warns that they are using Amazon gift cards, PayPal, reloadable cards like MoneyPak, Reloadit and Vanilla, too.

Of course, criminals aren’t using the iTunes gift cards to feed their voracious appetite for music. They sell the cards on thriving gift card black markets, where iTunes cards — all cards, really – can sell for pennies on the dollar. Still, that gives criminals a great way to receive funds from victims and quickly cash them out.

“I think most people are surprised about the black market for iTunes cards,” Hobbs said.

It seems a bit far-fetched that consumers would believe the IRS, or any government agency, would ask for payment via iTunes “bucks.” But clearly, people are falling for the tactic.

“In some cases, (criminals) stay on the phone (with victims) while they go to the store and buy the gift cards, talk them through it,” Hobbs said.

The trend is international, too. Here’s a story about a similar tactic working in the United Kingdom: a criminal tricks a victim into believing she has a big tax bill that must be paid immediately.

“One victim is revealed to have purchased over 15 iTunes gift cards from Argos – each one valued at £100 – and handing over the codes to scammers on the phone. Another victim shelled out an incredible £15,000 on iTunes gift cards after receiving a cold call, the codes for which went straight to criminals,” TrustedReviews.com wrote on Friday.

One reason these scams might be working: Apple and iTunes are both recognizable brands, and criminals may be borrowing a bit of their “halo effect” to gain credibility.

So the big message the agency is trying to deliver is simple: “If you’re not shopping at the iTunes store, you shouldn’t be paying with an iTunes gift card,” the FTC says.

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25% of College Students Spend Most of Their Money on Alcohol & Drugs, Survey Says

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A quarter of U.S. college students who responded to a recent LendEDU survey say their biggest monthly expense is alcohol and/or drugs.

“Quite surprising, but not that crazy,” Nate Matherson, CEO of LendEDU, said in an email. “This was perhaps the most fun response.”

LendEDU, an Iowa-based student loan and refinancing marketplace, surveyed 455 undergraduate and graduate students at three East Coast schools in early 2016. Not only did the survey find that these college kids are using their money for fun, it turns out many haven’t been taught about finances and may face a real wake-up call after graduation.

“College students are leaving campus with an average of $35,000 in student loan debt, yet the majority of students are lacking basic financial skills,” Matherson said. “How can we expect student loan borrowers to repay/escape student debt without personal finance knowledge?”

About half of respondents said they learned at least a little bit about finances in high school, while only 34% said they had taken a college course on personal finance. It appeared that parents were the biggest influence on financial knowledge, with 46% saying their parents taught them about managing money in some way and 24% saying they learned from their parents’ example.

Good Credit Pairs With Good Drinks

The LendEDU team reports that 58% of students surveyed were not actively working to build good credit. However, out of those who had a credit card, only 8% said they had been late on a credit card payment, so they may have good habits that are helping their credit without knowing. (Using a credit card can be a great way for young people to start building credit, and you can check out the best student credit cards here.)

You certainly learn a lot in college, and that includes budgeting, whether it’s for recreation or for financing your education. Developing good spending and saving habits now can help you one day when you are faced with repaying student loans or paying down a mortgage. These good habits can also benefit you in other ways, like building a good credit score. You can keep an eye on your credit by viewing your free credit report summary, updated each month, on Credit.com.

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How Many Americans Have Gone Through Foreclosure?

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During the Great Recession, many Americans lost their homes due to foreclosure. In fact, according to real estate data company RealtyTrac, there were 6,324,545 completed foreclosures from January 2006 to April 2016.

“It is a big number,” Daren Blomquist, Senior Vice President of RealtyTrac said in an email. “Normal would be around 250,000 bank repossessions per year. These last 10 years represented the biggest loss of home ownership and shifting of real estate wealth since the Great Depression.”

The Current Status of the Housing Market

The market has improved, but that doesn’t make it immune to foreclosures. (You can see the 10 states with the biggest foreclosure problems here.)

“The foreclosure crisis is largely behind us, although still certainly lingering in certain pockets,” Blomquist said. “Unfortunately, we are already seeing signs of another housing bubble in certain markets, so people should continue to be cautiously optimistic when it comes to the housing market.”

But Blomquist says people who can truly afford to buy a home may still benefit from it.

“Homeownership done responsibly is still one of the best ways to build wealth,” Blomquist said.

What a Foreclosure Can Mean for You

“Foreclosure will obviously create a crater in a credit report for some time,” Troy Doucet, attorney with Doucet & Associates in Columbus, Ohio, said in an email. “However, foreclosure is not the end of the world. Those with foreclosure in their credit past will find their credit scores slowly improve as time passes. After a few years, they may even be able to buy another house.”

If you default on a loan or go through a foreclosure, it will appear on your credit report for seven years. But you can work to improve your credit score. (Consider these steps to fix your credit.) To see how your mortgage payments are affecting your credit you can take a look at your free credit report summary, updated monthly, on Credit.com.

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How Much Will a Car Repossession Hurt My Credit Score?

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In most parts of the country, having a car isn’t optional. Without your own vehicle, it can be extremely difficult to get to work or provide for your family, but at the same time, car ownership can be a challenge.

If you find yourself having trouble making your car payments, you could end up losing your vehicle. That can cause all sorts of other problems, which a Credit.com reader recently asked about:

“How much does a repossession affect your credit?” —kc

Having your car repossessed can certainly cause credit problems, but the actual repossession is only one of them. Car repossessions are reported to the major credit bureaus, and as a result, will impact your credit scores.

“A car repossession is considered a negative payment event by the FICO Score,” Can Arkali, principal scientist at credit scoring company FICO, said in an email. “All else held equal, the impact of a car repossession is comparable to the impact of a collection account.”

Jeff Richardson, a spokesman for credit scoring company VantageScore Solutions, said how much a repossession affects your credit really depends on the scoring model you’re talking about, as well as other factors in an individual’s credit history. In general, a repossession is considered a derogatory event, like collection accounts, civil judgments and tax liens.

Credit Problems Leading Up to Repossession

Of course, repossessions generally don’t happen in a vacuum. Someone’s car is usually repossessed because they haven’t made their auto loan or lease payments on time, which likely would have already hurt their credit.

“Avoid it,” Richardson said, adding that people should avoid any derogatory events “at all costs.” According to VantageScore, it will take longer to recover from a derogatory event like a car repossession than it will to recover from a series of delinquencies. So even if you’re behind on payments, bringing that account to current status and avoiding a repossession may also help you spare your credit from further damage.

The Aftermath of Repossession

A repossession can remain on your credit report for 7 years from the date you initially fell behind on the loan. The loan status will change to “repossession” (it would have previously said how many days delinquent the payments were), and it will have a seriously negative impact on your credit, though that impact will lesson over time.

Rod Griffin, director of public education at Experian, said there’s no specific amount of points your credit score will drop after a repossession. Given that a series of delinquencies tends to precede repossession, someone whose car is taken back likely already has a poor score.

“Typically it’s not a unique element of the history,” Griffin said. There are probably other negative things happening, and that repossession is going to dig them in deeper.”

That’s often not the end of it either. Losing your main mode of transportation could seriously compromise your ability to get to work and make money to pay your other bills. The potential domino effect of a repossession is just one of many reasons to try to avoid it.

A voluntary repossession — giving the car back rather than having someone come and take it — will hurt your credit score just as much as a forceful repossession, Griffin said, though it could help you in the future to maintain as good a relationship as possible with an auto lender or dealer. But as far as credit goes, it won’t help.

Finally, after the lender repossesses your car, they will sell it in an attempt to recoup their losses. If the sale doesn’t cover the entire balance of the loan, you can expect to get a 1099-C for that tax year. The Internal Revenue Service treats canceled debt as income, and you may need to pay taxes on it, which can further strain your finances.

If you do go through a repossession, Griffin recommends focusing on what you can do to improve your credit while you wait for the repossession to age off your reports. That includes actions like paying down your revolving credit balances (credit card debt) and bringing current any other delinquent accounts you may have, because payment history and debt use have the greatest impact on credit scores. You can see how your score changes as a result of a repossession and your efforts to improve it by getting two free credit scores every month on Credit.com.

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How to Kick Your Spouse Off Your Credit Cards

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Is it time to separate the finances between you and your spouse? Some couples manage their finances separately while others manage their bills together. But in both cases, it’s likely that a person will add a spouse to his or her credit card as an authorized user or open a joint account. And while these arrangements can work well, it sometimes needs to be undone.

How Authorized Users Work

When you add a spouse, or any other person to your account as an authorized user, he or she will receive an additional card, and will be able to make charges to your account. As the primary cardholder, you are solely responsible for paying all charges to your account, including those made by authorized users. However, an authorized user is generally not able to make changes to an account, redeem rewards or close the account.

Removing an Authorized User

There are times that you will want to quickly remove your spouse as an authorized user, such as in cases of divorce or separation, in order to avoid being responsible for their charges. When you added your spouse as an authorized user, you mostly likely contacted your credit card issuer to do so, and removing an authorized cardholder is usually just as easy.

Generally, you can simply call the number on the back of your credit cards and request that the authorized cardholder’s account be removed immediately. You will then be instructed to destroy the cards as well as contact any biller that has the card on file. As a courtesy, you can also notify the cardholder that their card has been removed from your account.

“If a customer would like to remove an authorized user from their account, they need to either call Capital One customer service number or log into our online servicing to request the change,” a spokesperson for Capital One said in an email. 

How Joint Accounts Work

A joint account is an arrangement where two people share the status of primary account holder, and both have complete authorization to make any change to an account that a primary account holder would. Additionally, both joint account holders are individually responsible for the repayment of all debts. Many credit card issuers no longer permit joint accounts, although some still do.

Removing a Joint Account Holder

Generally, either party can unilaterally close the account by contacting the card issuer over the phone or in writing. Once closed, the cards of both joint account holders and any authorized cardholders will be deactivated, and any future attempt to make purchases will be declined. Nevertheless, both joint account holders will still be individually responsible for paying off any remaining balance under the terms existing at the time the account was closed.

Streamlining Your Credit Cards During Divorce or Separation

Unfortunately, divorce and separation often lead to credit problems, as financial obligations can fall through the cracks. But it doesn’t have to be that way. Here are some tips that can help you to organize your finances and help keep your credit score intact.

After both spouses have been removed as authorized users from each other’s accounts or joint accounts have been shuttered, it’s time to take inventory of which remaining credit cards you have. Once you have that list, you need to contact each card issuer and make sure that they have your current mailing address so that you can receive your statements.

It’s also important to immediately check the balance of each account and find out when the next payment due date is. To avoid making late payments, you can set up automatic withdrawals from your bank account, or initiate automatic payments to your credit card issuer. Most credit card issuers also allow you to create payment alerts via email or text messages. Finally, you should consider changing your payment due dates to be more convenient for your needs. For example, some credit card users prefer to have their payment due date shortly after they receive their paycheck, so that they can use those funds to make a credit card payment. You could also consider closing any unused credit card accounts, in order to minimize the number of payments you have to keep track of.

Coping With Debt During Divorce

If you find that you have credit card debt in your name from purchases made by your ex-spouse, you should contact your divorce attorney to ensure that these charges become part of the negotiations. But while your divorce is being finalized, you can avoid credit card interest charges by transferring your existing balances to a new account with a 0% APR promotional balance transfer offer. These cards can offer you a break from incurring credit card interest, often for 15 months or longer. However, nearly all of these cards impose a 3% balance transfer fee on the amount transferred. (You can check out the winners of our recent ranking of the best balance transfer credit cards here.)

Going through a divorce is also a crucial time to monitor your credit. You can get a free annual credit report at AnnualCreditReport.com; you can also get a free credit report snapshot, updated every 30 days, from Credit.com. By carefully separating your credit card accounts and streamlining your finances, you can minimize the expense and credit score hit often associated with the unwinding of a marriage.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

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The Simple Way to Determine What to Cut From Your Budget

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If your budget is not quite looking the way you’d like, it may mean that it is time to cut back on some things. The question I often hear is, “How do we know what to cut?”

If you are like most people, you look at your budget and believe there is nothing at all you can cut. You have tried to move the numbers around time and again, but end up with the same result — not enough money to cover your expenses.

This leads to a lot of stress. How will you pay the mortgage? What about food? And the credit cards? No way can you pay those. You know you need to make changes to your budget, but how do you decide what to cut?

Follow these steps to find out what you need in your budget (you can get a free form to help budget by heading over here).

1. Cover Living Expenses

The first thing you need to do is make sure your living expenses are covered. These include items such as rent or mortgage, utilities and food. These are the musts. You might be able to cut back a little on your food budget, but in many cases you already have.

2. Pay Your Creditors

Next, add the payments you need to make to your creditors every month. This includes medical, vehicles and credit card debt. Only list the minimum required payment at this time. (Remember, high levels of debt can hurt your credit scores. You can see how your debts are affecting your standing by viewing your free credit scores, updated each month, on Credit.com.) You want to make sure your basic budget covers all of your required expenses.

3. Determine Wants vs. Needs 

Now that you have your basic expenses all covered, you next have to determine which items you really need versus those you think you need. For example, if you have dining out in your budget, that is not a need. That is truly a want. You may have clothing in your budget, which is a need, but you might be able to lower the amount you budget for kids’ clothes (say, by shopping consignment or sales to stretch your dollar).

When my husband and I were getting out of debt, this is exactly what we did. We created a brand new budget. The first items we listed were the things we needed in order to live. We then added in the few debts we owed. Finally, we looked at how much money we had left to spend and decided which “wants” we would like to add back in and which ones we were willing to give up, just to have additional money to pay off our debt.

It was a challenge for us, too. I did not like it. However, by doing this for just a couple of years, my husband and I were able to eliminate our debt. Now money is something that does not cause us stress. Our budget is simple. We never worry about paying the mortgage or putting food on the table.

When it comes to your finances, there are times when you have to make tough decisions. We all have the things we want, but if you are having financial struggles, you will have no choice but to cut back wherever you can. Small sacrifices now can pay off with huge rewards later.

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Is There Really Any Difference Between Mortgage Lenders?

difference between mortgage lenders

The Consumer Financial Protection Bureau has safeguards in place to make sure mortgage companies operate on a level playing field with consumers. The level playing field specifically has to do with rates, pricing and whether borrowers are getting a fair and reasonable offer from one lender to another. But how banks look at your financial picture is something else entirely.

Here are some factors that impact how your mortgage company works and the deal you get on your mortgage.

What’s Their Relationship With Fannie Mae & Freddie Mac?

The relationship your mortgage company has with Fannie Mae and Freddie Mac carries significance in whether or not they can fund your loan even if it is slightly outside of the box. For example, if you’re dealing with a company who originates the loan through another source, and then ultimately that loan is sold on the secondary market, the mortgage originator may be more conservative in their product offering and underwriting. Simply put, the more hands touching the file, the more scrutiny that file is going to have when the loan ultimately is delivered to the end investor.

Are There Investor Overlays?

Some mortgage companies still have what are called investor overlays, which are additional constraints an individual mortgage company may have beyond what Fannie Mae and Freddie Mac deem as acceptable as traditional underwriting standards. For example, some mortgage companies will not let you pay off debt to qualify while others do.

What Products Do They Offer?

Not all lenders carry the same types of loans and some have differing restrictions for some loan types. For example, the debt-to-income ratio (DTI) can differ between lenders. If you have a DTI on a jumbo mortgage (a special kind of mortgage based on the amount of the loan) beyond 43% some companies won’t work with you, while others will go as high as 49%. Another example could be an FHA loan with a credit score say at 600 versus one at 640. Some work with a 600 score, some do not. (You can check your credit scores for free on Credit.com to see where you stand.)

Where you get your mortgage is entirely up to you as a smart, well-informed consumer. Do not be fooled by a lender or mortgage company promising you the world just to get your business only to find later on your loan has too many roadblocks or your financial picture does not meet the guidelines set forth by that company. Integrity in lending and helping consumers is quality you should look for when picking a reputable mortgage source.

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