Credit protection: Freeze, lock or fraud alerts

via Credit protection: Freeze, lock or fraud alerts, clarionledger.com

PDF: Freeze lock or fraud alert

When Equifax announced a massive data breach last summer, many Americans were rightly concerned about their credit. Thieves had broken into the credit-reporting giant’s database and had access to at least 143 million records for several weeks over the summer, making off with vital information that could potentially be sold on the black market and used to commit identity theft. Initial reports indicated about 1.29 million Mississippians may be potential victims.

The breach was a disaster of unparalleled scale for Equifax and the credit-reporting industry. It eventually cost Equifax its CEO, and the company even now is having to explain itself to Congress and the nation. The inevitable flurry of lawsuits has followed, including a rare 50-state, class action lawsuit.

In the wake of the disaster, most financial experts advised us to be aggressive in how we protect ourselves and our information. The most common advice was to place a “credit freeze” on your account at all three major credit bureaus, to prevent thieves from opening new credit accounts. Other options included credit locks, or fraud alerts. But many people remain confused about the differences among the options, so I’ve found some sources of information to help explain the differences.

Credit freezes and credit locks are similar in many ways. Both keep your credit file off-limits to creditors trying to open new accounts. Both can be easily removed, although there are differences in how that occurs. The key differences, according to most sources I checked, are that unfreezing (“thawing”) your credit file may take a bit longer, locks may cost more, and you may be giving up some of your rights to join class action lawsuits if you put a lock in place.

A freeze is generally considered to be a stronger measure, to be taken in cases where you know your credit has been compromised. A lock might be used if you’re just concerned about the possibility of identity theft in general. A third option, a fraud alert, lets you know when new credit accounts are opened, so you can act immediately.

Both freezes and locks may cost you. Although there has been tremendous pressure from regulatory agencies and lawmakers to force credit bureaus to freeze your credit for free, only Equifax has so far done so (and only through Jan. 31). The financial website Nerdwallet’s Amrita Jayakumar notes that, at TransUnion and Experian, you will still be expected to pay about $10. For a lock, Equifax currently charges a $4.95 monthly fee to maintain the lock, but a free “lifetime” lock is expected in January. TransUnion provides locks for free, while Experian charges a $4.99 for the first month, and $24.99 monthly thereafter.

 When it comes to removing the protection, the advantage may go to credit locks. Both locks and freezes may be removed fairly easily, but removing a freeze can take 24 to 48 hours to take effect. By contrast, a lock (with TransUnion or Experian, not Equifax) can be removed instantly by simply swiping an app on your smartphone. This is important, for example, for people who want to apply for credit at the store cash register to take advantage of discounts.

Consumer Reports, in a September comparison between locks and freezes, said freezes were in general a better option than locks because freezes are guaranteed by law, as locks are an agreement between you and the credit bureau. In addition, the report noted, freezes are in general cheaper (perhaps free).

Regardless of which you choose, a fraud alert is a good thing to add on. It is free, lasts 90 days (you’ll need to extend it), and requires creditors to verify your identity. You only have to call one of the three credit bureaus, and they’re required to notify the other two.

For more helpful information about the three options, including a comparison chart, visit http://bit.ly/2ATZ6MQ.

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Mortgage payments jeopardize retirement years

via Mortgage payments jeopardize retirement years, clarionledger.com

PDF:Mortgage retirement 1Mortgage retirement 2

Mortgages have been a part of American life for generations. Very few people — especially early in their careers — have the resources to plop down the full payment on a home, so the vast majority of us live with a monthly mortgage payment.

In past generations, the mortgage was often paid off well before the golden years, but increasingly, people are carrying their mortgage payment with them into retirement.

According to the U.S. Consumer Financial Protection Bureau, in the decade between 2001 and 2011, the percentage of Americans 65 and older who hold a mortgage increased from 22 to 30 percent. And the rate jumped to more than 21 percent for homeowners 75 and older, up from just 8.4 percent in 2001. That means a lot of baby boomers are going to be sinking money into mortgage payments deep into their retirement, while their parents at similar ages would have been living in homes they owned free and clear.

The causes are varied: The average home costs a lot more than it used to, while average wages haven’t kept up with rising costs. In addition, with the rise and fall of interest rates, many people cyclically refinance their mortgages and open home equity lines of credit to get much-needed cash. While a lower interest rate is a good thing for borrowers, refinancing tends to extend the loan period.

In October, the Federal National Mortgage Association (otherwise known as Fannie Mae), issued a report about the issue. “The leading edge of the large baby boom generation has reached retirement age with a greater likelihood of carrying housing debt, raising concerns about their retirement financial security,” Fannie Mae noted in its report. “The oldest boomers, who were aged 65-69 in 2015, were 10 percentage points less likely to own their homes outright than were pre-boomer homeowners of the same age in 2000.”

As a result, Fannie Mae warned, some retirees may find their financial security reduced, with less money available to cover living expenses. It could also increase vulnerability to foreclosure and limit the “accumulation of housing wealth.”

Of course, many people consider housing debt to be just a part of their financial portfolio and manage it as they would any investment. But the volatility of the markets in recent years has made that decision more difficult, especially for consumers who have enough money socked away to pay off the mortgage if they had to.

Financial expert Wes Moss, who hosts the nation’s longest-running live call-in, investment and personal finance radio show on Atlanta’s WSB radio, wrote about the issue recently on the Clark Howard website. As to the question of whether seniors should pay off their homes into retirement, he says the answer is “a qualified yes.” He gives a couple of pointers:

  • Pay extra. Paying more than the minimum payment (or making an extra payment each year), Moss advises, can have dramatic effects over the long term. “Most happy retirees who own their homes outright paid off their mortgage early little by little, making more than the minimum monthly payment over several years,” he said. “In my experience, probably 70 percent of retirees who are mortgage-free used this method to reach that goal.”
  • Don’t raid your retirement savings to pay off the mortgage. Although it might be tempting to do so, he notes, withdrawing extra money from your IRA or 401K will generate tax penalties and increase stress. While taking money from other savings is a better option, it could leave you in a lurch later if you need the cash. Moss advocates the “one-third rule.” If you can pay off your mortgage with no more than one-third of your non-retirement savings, you should consider doing so,” he said.

As always, though, it’s wise to consult with a qualified professional before making any investment decision. For some good advice on finding a certified financial planner, visit The Motley Fool’s website at https://www.fool.com/investing/general/2015/06/05/how-to-find-a-certified-financial-planner.aspx.

Feds sue nation’s largest debt-relief provider

via Debt-relief provider deceived, misled consumers, feds say, clarionledger.com

PDF: Freedom Debt Relief 1Freedom Debt Relief 2

The Consumer Financial Protection Bureau has sued the nation’s largest provider of debt-settlement services, alleging that Freedom Debt Relief deceived and misled consumers about its services and fees.

The agency announced the lawsuit Wednesday in a news release, seeking compensation for consumers harmed by the alleged practices, as well as unspecified civil penalties and a court order to stop the company from providing services.

“Freedom took advantage of vulnerable consumers who turned to the company for help getting out of debt,” asserted bureau Director Richard Cordray. “Freedom deceived consumers about its clout with creditors that it knows do not negotiate with debt-settlement companies, made some customers negotiate on their own, and misled consumers about its fees and their accounts. Today’s lawsuit seeks to stop the deception and get compensation for consumers Freedom cheated.”

Debt-settlement companies are those that promise to reduce or remove consumers’ debt and negotiate more favorable terms for clients, usually in exchange for a set fee. Often desperate for help, debtors contact a debt-settlement company to help reduce their payments, stop collections and lower their interest rates. In many cases, debt-settlement companies work by getting creditors to charge off portions of a consumer’s debt.

But in the charges, the Consumer Financial Protection Bureau accused the San Mateo, California, company and its principals for failing to “settle debts as promised,” making consumers “negotiate their own settlements,” misleading them about its fees and capabilities and failing to inform them of their rights. The bureau noted that, once a settlement is reached, the company charges consumers “between 18 percent and 25 percent of the amount of debt the consumer owed on the day they signed up for the program.”

On its website, Freedom Debt relief says it “takes a human approach to debt relief” and claims to have successfully negotiated and settled more than $7 billion in debts for more than 300,000 consumers. But the Consumer Financial Protection Bureau’s lawsuit says its practices deceive debt-burdened customers by promising to work with creditors, when some creditors won’t work with the company (or, in some cases, any debt-settlement company). In addition, the bureau says, Freedom “charges consumers its full fee even when creditors simply stop collection efforts in the absence of a negotiated settlement and consumer payment and when it takes no action on a consumer’s account.”

In a news release from co-CEOs Andrew Housser and Brad Stroh, Freedom Debt Relief challenged the bureau’s assertions, saying it will “vigorously contest” the agency’s lawsuit. “We firmly believe that the CFPB fundamentally misunderstands how debt settlement works and has acted without proper regard for the consumers it is charged with protecting,” the company noted in its response. “We’ve asked to sit down on a number of occasions with the CFPB, to no avail, so we are disappointed that they’ve rushed to judgment, seemingly putting the interests of a few of the largest creditors ahead of the interests of consumers who need help and support.”

To read the Consumer Financial Protection Bureau’s complaint, visit http://files.consumerfinance.gov/f/documents/cfpb_freedom-debt-relief-llc_complaint_112017.pdf.

Credit freeze over data breach should be free, AG Hood says

Source: Credit freeze over data breach should be free, AG Hood says, clarionledger.com

Mississippi’s attorney general is calling on two of the nation’s “Big 3” credit reporting agencies to immediately end the practice of charging fees for consumers to freeze their credit accounts in the wake of the massive data breach that affected their counterpart Equifax.

Following the news that more than 145 million Americans (including about 1.3 million Mississippians) were at risk after hackers broke into Equifax’s database over several weeks this summer, consumer advocates urged consumers to “freeze” their credit reports. A credit freeze effectively keeps anyone from using credit bureau files to open new accounts, and stays in place until removed by the consumer.

But when people tried to freeze their credit files with Equifax, they were told they’d have to pay a fee. The resulting outrage made Equifax reconsider its decision, and it agreed to waive its fees to freeze accounts. The company’s response to the crisis cost CEO Richard Smith his job and cast doubt on the company’s future.

But despite pressure, TransUnion and Experian didn’t waive their own fees to freeze consumers’ accounts. Mississippi Attorney General Jim Hood and 35 of his counterparts want to change that. Hood sent out a news release last week, saying the group had sent letters to TransUnion and Experian urging them to waive their fees immediately or they’d send the bill for all the agencies’ fees to Equifax.
“If these agencies do not waive their fees, I intend to make Equifax pay for the fees that victims have incurred due to their hack,” Hood said in the release. “For customers who have already paid fees to place a freeze on their account, Equifax must reimburse them.”
Immediately after that breach, Hood and his counterparts forced Equifax to extend their free credit monitoring through the end of January. Still, he argues, it’s not enough. “Although Equifax also agreed to waive fees for its security freezes, people are still having to pay fees at other agencies,” Hood’s release noted.
“While it is legal in Mississippi to charge up to $10 to place a freeze on credit reports, General Hood believes a measure to waive that fee in extreme situations such as this breach should be seriously considered.” He noted that credit reporting agencies profit by selling consumers’ information, “and they have a responsibility to protect that same information.”
A credit freeze protects consumers by prohibiting third-party access to a consumer’s credit file; it’s considered one of the most effective ways to protect yourself should someone try to open credit accounts in your name. A freeze stays in place until the consumer removes it by using a unique passcode provided by the agency. Since it will also keep you from getting new credit — such as a mortgage or auto loan — while it’s in place, you’ll need to lift it if you are applying for credit.
Unless and until the fees are waived at TransUnion and Experian, a credit freeze will cost Mississippians $10 at Experian and TransUnion, but you won’t have to pay a fee at either if you’ve been a victim of identity theft.
Hood also reiterated his advice for protecting yourself against identity theft:
  • Regularly request your free credit reports, inspect them closely, and promptly dispute any unauthorized accounts.
  • Inspect all financial account statements closely and promptly dispute any unauthorized charges.
  • Consider placing alerts on your financial accounts so your financial institution alerts you when money above a pre-designated amount is withdrawn.
  • Beware of potential phishing emails; don’t open any email messages or attachments from unknown senders, and do not click on any unknown links.
  • Watch out for “spoofed” email addresses. Spoofed email addresses are those that make minor changes in the domain name, frequently changing the letter “O” to the number zero, or the lowercase letter “l” to the number one. Scrutinize all incoming email addresses to ensure that the sender is legitimate.

For info on how to freeze your credit at all three bureaus, visit http://clark.com/personal-finance-credit/credit-freeze-and-thaw-guide/.

Student debt: Scams hit students struggling to pay back loans

Source: Student debt: Scams hit students struggling to pay back loans

Student loan debt has ballooned in the past few years. The Federal Reserve reported recently that Americans owe more than $1.45 trillion in student loans, making it the second-largest segment of U.S. debt (second only to mortgages).

While many students are financing their college education through a mixture of scholarships, grants, loans, personal savings and help from their families, there can be a lot of confusion about the student loan process.

That confusion can make borrowers prone to being victimized by predatory companies, who make false promises of relief and assistance. That’s why federal and state regulators and private watchdog organizations are taking a team approach to battle a variety of frauds and scams directed at students and their families.

The Federal Trade Commission recently announced “Operation Game of Loans,” which included 36 separate actions, including seven FTC cases and other casesbrought by chief law enforcement officers in 11 states and the District of Columbia. In total, the FTC reports, the scams collected about $95 million in illegal fees from consumers.

“Winter is coming for debt relief scams that prey on hardworking Americans struggling to pay back their student loans,” said Maureen K. Ohlhausen, FTC acting chairman. “The FTC is proud to work with state partners to protect consumers from these scams, help them learn how to spot a scam, and let them know where to go for legitimate help.”
Federal actions included cases brought against five companies, including California-based A-1DocPrep Inc., Alliance Document Preparation and Student Debt Relief Group; as well as Florida-based American Student Loan Consolidators and Student Debt Doctor. The companies have been charged with a variety of offenses.
For example, the FTC charged A1DocPrep with contacting consumers while claiming to represent the U.S. Department of Education, while “targeting distressed homeowners” and making false claims they could prevent foreclosure.
Others are charged with making false promises of loan forgiveness; charging illegal upfront fees to assist with reducing student loan balances; and collecting Social Security numbers and other sensitive information to be used to “hijack consumers’ accounts while cutting them off from their loan servicers or the U.S. Department of Education.”

In addition, the FTC announced they had sued two Florida-based operations that allegedly targeted borrowers with fraudulent or ineffective services, while collecting millions in fees.

While Mississippi was not among the states listed in the recent announcement, it’s likely that Mississippians have been victimized by these scams. To help consumers avoid becoming a victim of fraud, the FTC advises us to beware of promises that a company or organization can promise fast loan forgiveness, which often comes from a telemarketer, email or direct-mail piece that claims to be affiliated with the U.S. Government. Scammers can duplicate an official seal, so don’t be fooled.

“Consumers should never pay an upfront fee for help,” continues the agency, “and should not share their FSA ID — a username and password used to log in to U.S. Department of Education websites — with anyone.”

Borrowers can find out about — and apply for — deferment, forebearance or discharge programs for free directly from the U.S. Department of Education or their loan servicer.

For more information about repaying your student loans, visit https://studentaid.ed.gov/sa/repay-loans.

Freezing your credit after the Equifax breach

 

freeze credit

NASA Federal Credit Union

 

Source: Freezing your credit after the Equifax breach, clarionledger.com

A recent data breach from one of the nation’s largest credit bureaus has sent shockwaves throughout an industry that holds information affecting the financial futures of millions of Americans.

Hackers reportedly broke into the files of Equifax for a six-week period from May through July, making off with personal information for about 143 million consumers. This brazen heist is one of the largest to date, potentially exposing nearly half of Americans to the risk of identity theft (along with considerable numbers of Canadians and British citizens).

“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do,” an apologetic Equifax Chairman and CEO Richard F. Smith said in a video statement. “I apologize to consumers and our business customers for the concern and frustration this causes.”

 You may recall that Equifax and the other “Big 3” credit bureaus were sued in recent years by Mississippi Attorney General Jim Hood and his counterparts around the nation after allegations of shoddy record-keeping and reporting practices led to errors and damage for some consumers. The suit resulted in a 2016 settlement of more than $7 million.

Of course, data breaches are nothing new, and happen constantly as hackers probe the security of databases around the world. The threshold for making the national news has gotten higher, so if a breach makes big news, it’s usually one that has set a record.

“The types of data potentially exposed in this breach could ruin lives, businesses, and might I say, credit scores,” Hank Thomas, chief operating officer at Strategic Cyber Ventures, a Washington incubator of cybersecurity companies, told McClatchy News Services. The trove of data (with a potential value of hundreds of millions of dollars on the black market) included names, Social Security numbers, dates of birth, addresses, driver’s license numbers and credit card information.

As you read this news, you might be asking yourself, “should I be worried?” Most every source I’ve consulted says the answer is a resounding “yes.” The amount and type of data that has been compromised can expose you to the risk of identity theft for years to come. Using this data, fraudsters could open new credit accounts or lines of credit in your name, apply for driver’s licenses, even get speeding tickets on your record (for which you can be arrested) and steal government payments such as Social Security checks and tax refunds.

The danger is here, and it’s real. So, what next? In the wake of the announcement (which Equifax waited several weeks to do), the company announced it would be offering a year of free credit monitoring through its TrustedID Premier service. But many advocates pointed out that signing up for the service includes language that some said could be construed as signing away the consumer’s right to sue over the breach. After significant pushback, the language was changed. Still, some financial experts advise consumers not to sign up for the one-year monitoring, since the effects of the breach could last years.

Many experts advise that consumers who may be affected by the breach place a “credit freeze” on their reports at all three major reporting agencies: Equifax, TransUnion, and Experian. Placing a freeze on your account takes a little effort and can be inconvenient. But if you are applying for credit, you can temporarily lift the freeze yourself, and re-enable it later. A credit freeze blocks your credit reports from being shared with potential new creditors. Without a credit report, most lenders won’t open a new line of credit. (It won’t stop them from changing information on existing accounts, however.) Freezing your accounts will not affect your credit or score.

Note: Bowing to public outcry after the breach, Equifax announced Sept. 11 that it would waive all fees for the next 30 days for consumers who request a credit freeze. To freeze your file on Equifax, click on: https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp. (It wasn’t known at the time of this writing whether TransUnion and Experian would also be waiving fees on credit-freeze requests.)

For more on credit freezes, visit https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do.

How to start a good credit history

via How to start a good credit history, clarionledger.com

PDF: Buildcredit1Buildcredit2

Credit card debt among Americans is sky-high right now. Back in May, the Federal Reserve noted that we’d reached a dubious milestone: Americans’ credit-card debt had reached the $1 trillion mark, the highest since 2008. The average household carries a little more than $16,000 in credit-card debt; some lower and some much, much higher.

Debt can be crippling. Many families, for whom the cost of living has risen out of proportion to their income over the past several years, find themselves living paycheck-to-paycheck, with little in the bank and often having more “month than money.” Credit cards often provide a deceptively convenient way to take care of the immediate problem, while passing the bill to the uncertain future. But as balances rise, so do finance charges. It’s a little like digging a deep hole around yourself, and finding the sides getting higher as you try to climb out.

Of course, if you could pay for everything with the cash you have, you wouldn’t need credit. While that approach works great for those of us who can make that happen, many Americans don’t have the knowledge, circumstances or discipline required.

So, what are the options? Other than carrying out a cash-only existence, you can be a victim of credit or make it work for you. While many young adults appear to be avoiding credit cards (perhaps after seeing the previous generation struggle with them), many financial experts say that using credit responsibly is a learned habit, and it’s best to learn it while you’re young.

My own experience with credit started at a tire shop in McComb. When I got my first paycheck from a part-time job, one of the first things I did was to go to the tire shop and get new tires for my old car. The tires cost more than my meager paycheck, and the owner of the shop suggested I buy the tires on credit at zero interest. Despite my lack of credit history, he extended the credit because he knew my family. I was a little reluctant at first, but it didn’t take me long to pay off those tires, and I showed up like clockwork to make the payments. I still remember the feeling of accomplishment I had when I plunked down the final payment.

Establishing credit is different today. The complicated credit-scoring system looks at whether credit has been offered and used and whether you’ve met your obligations. The resulting credit score isn’t sympathetic to your life events, nor does it care about how great a person you are, or consider your feelings. It boils everybody down to a number.

But, it is possible to make the system work for you. The “Cashlorette” (Sarah Berger) wrote recently on her blog about how to establish a good credit history for millennials. Berger notes that it’s crucial to show you can use credit in the first place.

  • First, she advises, establish a habit of paying your balances in full, every time.This will show future creditors that you are serious about your responsibilities. “Link a small, fixed expense to your credit card; one you know you can pay off every time, like your Netflix subscription,” Berger advises. “This is a simple way to slowly build credit, without having to stress over accidentally overspending.”
  • Pay attention to your utilization ratio. While this sounds complicated, it’s really not; it’s just the percentage of available credit you’re actually using. Keeping this number around 30 percent gets you the best score. For example, if you have a credit line of $1,000, keeping your credit balances below $300 is considered acceptable utilization of credit. (Be sure to include all your credit cards in this equation, not just one.)
  • Apply for the right card. There’s a plethora of cards out there, offering all kinds of “rewards” and “incentives”. But keep in mind these things are there to encourage you to use the card, so choose wisely.
  • Avoid store credit cards. While it’s tempting — and a little bit of a status symbol — to pull out a credit card from your favorite clothing store, such cards often have the highest interest rates in the industry.
  • Don’t look at your available credit as a license to spend. For most purchases, use cash or a debit card. If you want to make a purchase, delaying the instant gratification and saving up for it puts the power in your hands, and you’re far more likely to appreciate it as well.

Check out Berger’s full blog post here: http://bit.ly/2w3nZ7h.

Credit scores may be on the rise

 

ct-credit-scores-0602-biz-20150601

Chicago Tribune

via Your credit score may have gone up July 1, clarionledger.com

 

PDF: Credit scores going up for millions

This month, up to 20 million Americans who keep a close watch on their credit scores will get a pleasant surprise as all existing civil judgments and many tax liens will disappear from credit reports. The result will be an immediate bump — as much as 20 points — in the credit scores from the “Big 3” credit reporting agencies. Many expected the changes to take effect July 1, so it may have already happened.

Because of new policies requiring more documentation, Experian, Equifax and TransUnion announced recently they’ll be removing these items from their credit reporting. The action comes after many regulators and advocates have expressed concerns over the reliability and accuracy of the information contained in many credit reports. In particular, the Consumer Financial Protection Bureau called out the credit reporting industry in a March report, citing lax standards for researching the information contained in credit reports and leading to inaccuracies.

You may recall that, last October, Attorney General Jim Hood announced a settlement with the Big 3 over a variety of supervisory practices that led to large numbers of errors affecting thousands of consumers. The companies agreed to pay more than $7.1 million to settle the charges, gave Mississippi residents free credit reports (see below), promised to remove certain liens and judgments and said they’d make substantial changes in their practices.

The credit report — and the scores generated from them — are extremely powerful in determining whether you get credit, a job or even a place to live. But with the increase in their usage, it’s more important than ever that the information is accurate. Errors can unfairly ding your credit and limit your options when it comes to credit.

Credit scoring — typically called “FICO” or “Vantage”— uses a computer algorithm to look at your credit history, including how much debt you have and how long you’ve had it, how much of your credit you’re using, whether you’ve been responsible with credit in the past and several other factors. It all comes down to a number between 300 and 850. (Wallethub reports that the average FICO score in the U.S. is 699). People on the high end generally get better credit, while those stuck in the low end of the range are often out of luck.

The credit report is divided into several sections, one of which is Public Records. In this section, you’ll find whether you’ve been the subject of negative actions by the government or courts including tax liens and civil judgments. For example, if you’ve lost a lawsuit and the court has ordered you to pay, it might appear on your credit report as a civil judgment. If you’ve gotten behind on your taxes, the government can claim some of your assets until the debt is paid. That would be considered a tax lien. These are simple examples, but both civil judgments and tax liens can be quite complicated.

The latest action by the credit bureaus wipes the slate clean on civil judgments and many tax liens in credit reports, removing civil judgments entirely and removing at least half of tax liens. (It doesn’t mean new ones won’t be reported; just that the old ones will be eliminated.) In the future, civil judgments and tax liens must contain your name, address, Social Security number or birthdate, and must be updated at least every 90 days.

Eliminating these items from credit reports, Wallethub notes, will mean 6 to 9 percent of Americans (in other words, 12 million to 20 million people) will see their scores improve. The average person will see their scores rise by 10 points, up to a maximum of about 20 points. Most of those seeing an increase, Wallethub adds, are people whose current scores are between 351 to 500; those with scores above 600 are less likely to see a bump. Some credit-industry watchers have expressed concerns the changes might be good for some consumers, but could increase lending to high-risk borrowers. However, most believe the effect on the industry will be minimal.

If you read this column on a regular basis, you know that you’re allowed by law to review your credit report once every 12 months from annualcreditreport.com. And Mississippians, as I noted above, can review their credit reports as often as they want by getting an activation code. (But don’t delay; you have until July 24 to get your code at http://www.mississippicreditreportsettlement.com/.)

“While any credit-score increase associated with these changes is unlikely to exceed 20 points, every piece of negative information that falls off your credit reports is good for your credit score,” advises Wallethub in its article. “So we definitely recommend reviewing your credit reports on a regular basis, both to confirm the removal of problematic public records and to make sure no other mistakes wind up costing you money.”

Partner’s finances can be dating dilemma

via Partner’s finances can be dating dilemma, clarionledger.com

PDF: Dating Finances 1

PDF: Dating Finances 2

If you were dating someone and found out they had a lot of debt or were not very good at managing their money, would that affect how you felt about continuing your relationship with them? While many romantic-minded people would doubtless say they’d follow their heart and not their head in making such judgments, it’s evident growing numbers of people are giving it some thought.

In a recent study by Bankrate.com, 42 percent of Americans surveyed said that knowing someone’s credit score could have an impact on whether they wanted to date that person. While that’s well-short of a majority, the numbers are growing; it’s up a few percentage points from last year’s study that asked the same question. It appears that financial security is growing as a concern for people seeking long-term relationships, and especially marriage.

In general, about 13 percent of people surveyed said knowing the credit score would have a major impact, with about 20 percent of women and 7 percent of men saying it was a crucial factor. Said another way, the credit score was nearly three times as important to women as it was to men. On the other side of the coin, about one in five respondents said they’d never consider it to be an important factor in choosing a partner.

Deciding when to ask for such information (or when to reveal it) can be tricky. Money is a delicate subject for most people, and discussing finances is especially difficult for those with a complicated financial history or those with a lot of money. Most people would consider it “tacky” (as my mom would put it) to ask your date to produce a credit report on the first date or before even agreeing to go out, but if such knowledge is important to you, it’s a good idea to get the issue behind you in the first few months.

“It’s probably not a great idea to ask for someone’s financial history on the first date,” said Mike Cetera, credit card analyst at Bankrate.com. “However, it’s better to know if a potential partner has a history of bad financial decisions before the relationship goes too far, especially if you plan on making large purchases together or sharing bank accounts.”

And, romantic hearts beware; while a credit score might tell you how much debt a person has and their payment history, it’s rarely a reliable indicator of character or integrity. Many people’s low credit scores are the result of uncontrollable life events such as health issues or unemployment, past behavior that’s now changed, or even mistakes made by credit reporting agencies. Without going deeper, most people would consider it shallow to dump an otherwise-delightful partner because they’d been late a few times with their credit card payment years ago.

Of course, when it comes to marriage, financial habits become a lot more important. Deciding to spend the rest of your life together means you’re going to be making a lot of decisions together, and it also means (in most cases) your own history will be forever linked with your spouse’s. (Bankrate’s study noted that 77 percent of married or partnered couples say they use joint bank accounts.) If you’ve carefully tended your own financial garden as a single person, getting married to a financial slob could mean that both of you are going to have to get used to a lot of changes.

Ultimately, honesty is the best policy when it comes to finances in a relationship. Many relationships have been destroyed because of disputes about money, so it’s important to make sure both parties are open and honest about their financial habits, resources and attitudes about spending and saving. Choosing when to ask about (or reveal) crucial financial information depends on the relationship and the people involved but should never be purposefully concealed or distorted. As Shakespeare put it in “All’s Well that Ends Well”: “No legacy is so rich as honesty.”

Here’s how to avoid credit card fees

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Source: Here’s how to avoid credit card fees, clarionledger.com

PDF: The_Clarion-Ledger_State_20170401_A007_0

Most people who have credit cards pay fees. While a few credit card companies say they offer “no-fee” cards to their customers, many cardholders who fail to read the fine print are stuck with hundreds — if not thousands — in fees each year anyway. And since a lot of people just pay the bottom-line balance without examining their statements closely, they’re likely to be unaware of just how much those fees cost them.

Most people who have credit cards pay fees. While a few credit card companies say they offer “no-fee” cards to their customers, many cardholders who fail to read the fine print are stuck with hundreds — if not thousands — in fees each year anyway. And since a lot of people just pay the bottom-line balance without examining their statements closely, they’re likely to be unaware of just how much those fees cost them.

Planning to use your card while traveling abroad? It can cost you up to 3 percent of your purchase, meaning that $1,000 shopping spree in Paris would cost you up to $30 in fees. Getting a cash advance? While it might seem like an easy way to take care of unexpected needs, you could pay as much as 4.5 percent for that privilege (not to mention high interest rates on that money). Add on annual fees, late and overlimit charges paid routinely by many customers, and many people soon find they’re bailing water on a sinking boat.

But a new study from Creditcards.com finds many cardholders could avoid paying those expensive fees if they just ask. It turns out that credit card issuers find themselves in a highly competitive environment these days, making it more important to try to retain their customers. You could make that work for you, because they’re often willing to waive fees upon request.

“I was surprised at the level of success, especially when it comes to asking for an annual fee waiver,” says Alex Johnson, senior marketing manager at FICO, creator of the widely used credit scoring system. “The takeaway is that you should always ask. The worst that can happen is that they’ll say no. But the data show there’s a pretty good chance they’ll say ‘yes.’”

In the Creditcards.com study, fewer than one in four cardholders (among the 952 surveyed) reported they had actually ever asked for fees to be waived. But among those who requested late fees be waived, nearly nine out of 10 reported success. And it doesn’t just work for fees; it can also help lower your interest rate; almost 70 percent of people who requested a lower interest rate got one.

While credit card companies spend a lot on advertising to tout their rewards programs (such as airline mileage and cash-back rewards), a lot of them charge a hefty annual fee for participating. Savvy cardholders can often get their rewards-program fees lowered or eliminated, though, if they call and ask. But only a paltry 11 percent of cardholders even asked.

“People have far more power with their credit card company than they realize. Competition among card issuers is incredibly high these days and customer retention is a priority,” said Matt Schulz, CreditCards.com’s senior industry analyst. “Don’t be afraid to ask for fees to be waived or higher credit limits because, quite often, you’ll actually get it.”

Policies vary by company, and most of the big banks issuing cards have complicated algorithms that help determine whether the customer service rep can help you when you call. Many companies (such as Discover) will routinely waive the first late fees, and possibly more, if you request it.

With these rates of success, you’d think customers would be catching on. Interestingly, though, Creditcards.com noted the percentage of people making requests has barely changed from the last two surveys in 2014 and 2016. Many people are unaware they can make such requests, and others get stymied by long hold times or find it difficult to deal with customer service reps. Whatever their reasons, they’re often leaving good money on the table. But with a little patience and a plan, many customers find their credit-card companies might be willing to make a deal. It’s a call worth making.