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Cheat Sheet Q & A
Today’s question - rebuilding credit after bankruptcy-
Bottom Line: Today’s question comes from an individual who recently suffered through a bankruptcy and wants to work on rebuilding his credit. The good news for this gentleman is that he isn’t in need of borrowing money for an everyday life event, like an auto loan. That helps. So what are the next best steps? First let’s look at the options:
- This is obvious – pay all remaining bills on time (especially any that did require a credit check to start service)
- Open a bank account with a new bank or credit union
- Open one or two new credit cards and use them
I’ll elaborate on bullets two and three. Opening a new bank account can be complimentary to existing banks accounts. It’s doesn’t require you to close existing accounts and changing banks (that could actually hurt you). By opening a new account post – bk, you’re establishing a credit reporting event that will bode well as long as you properly manage it. Additionally, once you establish a little history with the new bank account, you’ll likely be provided with offers for lines of credit with that bank on more favorable terms to help you rebuild. Regarding the credit cards…
Bankruptcy reforms passed about a decade ago preventing you from filing again within 8 years of a discharge actually work to your benefit when trying to obtain credit soon after a bankruptcy. Without you being able to file for bankruptcy again for 8 years, there are credit card companies that will take a little risk with you not long after a bankruptcy. It’s important to carefully review credit card offers that come along. Many, especially initially, will be packed with annual fees and additional costs that you likely don’t want to be saddled with. You will find offers that include lines of credit (typically from $500 to $1500) with either no fees or an annual fee of $50 (which is as high as I’d go). Open a card or two and use them every month as you would a debit card. Pay them off every month. Do this for awhile and you’ll be surprised. Within 18 months it’s possible to have respectable credit again (mid 600’s). Within two years the high 600’s are possible and from there you’re back on track.
If you have a question you’d like me to address email me: brianmudd@clearchannel.com
There’s a good chance you have issues on your credit report (and it could be costing you money):
Bottom Line: We’ve known that it’s possible to have errors on our credit reports. We’ve also heard that it can be a pain to have them resolved. I’m not sure we knew just how prevalent it is until the latest finding from the FTC.
The Federal Trade Commission found the following:
- 21% of all credit reports have errors
- 5%+ have errors that negatively impact credit scores and thus credit outcomes
- The process to have issues resolved isn’t efficient or effective for consumers
So first are you requesting and checking your free credit report every year? If you’re not this should serve as a reminder to do so. Here is the direct link to request your credit report: https://www.annualcreditreport.com/cra/index.jsp
Next… I’ve had this happen to me. After getting married and opening a joint account information was jumbled with one of the credit rating companies and my state of birth changed to Ashley’s. They also made me seven years younger. While this didn’t impact my credit score, it’s still the type of issue you want to get resolved. The bigger issues are the mistakes that cost you credit and money.
Even if you don’t need credit right now – your credit score will impact the cost of life. Even if you don’t request a loan, the odds are you use insurance products that use credit scores as a factor in your cost of the products. The size of the deposit for many consumer services like phone and TV services are also determined using credit scores.
http://www.usatoday.com/story/money/personalfinance/2013/02/11/errors-in-credit-reports/1909529/
Can you actually earn 4% interest from a checking account right now?:
Bottom Line: The answer is yes. A company by the name of Kasasa is working with certain banks and credit unions on interest checking accounts that yield far more than you’ll find otherwise.
Currently the average interest checking account yields a half of one percent per year. Really… that’s it. So the concept of a 3-4% yielding interest checking account is unheard of until now. But what’s the catch? Well there are a few but it’s still interesting. Requirements to qualify for that high yield are:
- No paper statements
- Online banking
- Use of a debit card ten times or more per month
Those aren’t tough requirements for many people to meet. What makes this more viable is that there aren’t penalties or fees if you don’t meet the requirements in a given month. They just pay you less interest in that particular month. This is innovative and interesting if you’re inclined. For more information click the link below:
http://www.cnbc.com/id/100449699
Amex launches pay per tweet service:
Bottom Line: By know you’ve either sent a text donation or have come across the opportunity to do so. By now you’ve either tweeted or are at least somewhat familiar with what tweets are.
American Express is taking Twitter to a whole new place that has enormous implications for businesses. Amex is enabling “Retail Tweets” or the ability to buy something using a Tweet.
Similar to the text to donate concept, Amex is creating Twitter handles that will serve as commands to engage in e-commerce. Pretty innovative and the opening of a whole new revenue stream for enterprising businesses…
http://www.cnbc.com/id/100450720
This year’s top audit triggers:
Bottom Line: Every year the
- Not reporting all 1099’s (bottom line is the number they have on file vs. your filing should match up – if they don’t that’s clearly an issue)
- Not reporting all K-1 forms (if you’re a small business person you likely have one but commonly people who invest in certain Limited Partnerships and Trusts – including in the stock market, will get these forms but not report them on their taxes. Just as with 1099’s if number of reported K-1’s aren’t the same on both sides – something is wrong).
- Home office deductions (the Feds are digging down on these write offs that often time include every day household items that aren’t for business use)
- None cash donations (the bottom line is to document and be able to prove the value you’ve assigned to the items in your tax return)
Ever wonder what apps were draining you’re the battery life of your mobile devices?:
Bottom Line: Verizon no longer has an app store but they do have an interesting new app service. They are rating popular apps. If you ever wondered which apps are big battery drainers – they’ll tell you. How do apps rate for security or how much data do they use? They cover those areas to. It’s a first of its kind service that’s free to review. To check it out click the link below:
http://news.verizonwireless.com/news/2013/02/verizon-wireless-top-20-apps.html
iPhone 4S users – this updates’ for you:
Bottom Line: There is now an update to the iOS 6 update. It’s just for the iPhone 4S for now. Update 6.11 fixes issues the first update caused on 4S (slower network speed, issues with programs like calendar syncing with Microsoft Outlook and the Apple maps app and excessive battery drain). If you have the 4S you’ll want to download the update at your earliest opportunity. There will likely be an update for the 5 in the not so distant future but the wider reach of the problem on with the 4S created urgency to get that update out.
