Posts Tagged: ‘Credit’

Americans Borrow No Matter the Economy

February 16, 2016 Posted by kingcade

The Federal Reserve recently released data that indicated that American’s borrowing habits are excessive whether the economy is booming or hurting.  Over the past decade, credit card debt has gone from $1.02 trillion in 2008, down to $835 billion in 2011 and back up to $935.6 billion by the end of last year.

Americans between the ages of 18 and 65 have an average of $4,717 in credit card debt. The average interest rate is 15 percent, according to creditcards.com. Therefore, if a credit card user makes a minimum payment of $189 per month, it will take more than ten years to pay off a debt of $4,717. Ultimately, the debtor would pay a total amount of $22,869, a cost of $18,155 for a very small loan.

A study released by the Boston Fed examined American credit card debt and found that the biggest reason Americans have such high debt is due to the availability of credit.

The study also showed that only 35 percent of credit card users do not carry a balance. This means they pay off their bill every month and only use their cards for convenience. The other 65 percent of credit card users are “revolvers,” meaning they do not pay their balance in full so the debt revolves. Revolvers tend to see credit limit increases as an invitation to spend more.

Many credit card users are reeled in when companies offer free teaser years that come with as much as $600 worth of miles or hundreds of dollars in cash back as incentives to sign-up and spend. Studies show that credit card debt typically starts in a debtor’s 20’s. Often times the debtor is not earning very much at the time and the availability of funds through credit essentially amounts to extra wealth and reduces the need to save. Although the habit typically starts early in adult life, credit card debt follows most Americans into middle, even old age.

Keep in mind; there are incentives to breaking your credit card habits. According to the Federal Reserve, paying off your credit cards comes with a return that averages 14 percent. This means simply paying off your credit card debt is the best investment you can make.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

FICO’s New Credit Score and What it Means for Home Buyers

September 10, 2014 Posted by kingcade

Following the 2008 housing crash, your credit score now plays a major role in the home buying process. Having a low credit score can result in borrowers having a higher mortgage interest rate and sometimes not qualifying for a loan at all.

FICO’s new credit score model is expected to change all that. The upgrade, called FICO 9 is likely to result in a seismic shift in credit reporting, helping those who have had less than perfect credit.

FICO 9 will be released this fall and will be less sensitive to medical collections information reported to credit bureaus. According to FICO, the median FICO score for consumers who only have medical collections on their credit report will increase by 25 points with the changes.

The new model also drops collection agency accounts that are paid off either in full or via a settlement. In addition, under FICO 9 people will be able to get a credit score even if they lack credit history.  Credit bureaus will instead be able to pull their phone bill or cable bill. This will tell lenders if the applicant is at risk of defaulting or if they have a good track record of paying their bills on time.

Mortgage experts do not anticipate FICO 9 having a dramatic increase in new home sales, but they do say, “It will help a set group of people secure a loan or get better terms.”

Under the current FICO score, a settled collection account can drop a score down low enough to not qualify for a mortgage. Under FICO 9, borrowers who could not pay their debt in the past but are now back on track, will not be penalized for past credit mistakes.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources: http://www.foxbusiness.com/personal-finance/2014/09/10/what-fico-new-credit-score-formula-means-for-home-buyers/

New FICO Model Could Boost Credit Scores for Millions

August 19, 2014 Posted by kingcade

FICO, the company responsible for the most widely used credit score in the U.S. announced this month that its newest scoring model will differ drastically from past versions. Known as FICO 9, the new model will take effect in fall 2014. FICO 9 will differ from FICO 8 in two major ways:

1.) It will differential between medical and non-medical bills that have been turned over to collections. Medical bills will no longer carry as much weight in consumers’ credit scores. Currently, FICO 8 makes no distinction between unpaid medical and non-medical bills.

2.) It will disregard accounts in collections that consumers have already paid. Currently, FICO 8 makes no distinction between paid and unpaid accounts in collections.

Treating medical debt differently comes as a welcome change to consumers. In a May 2014 report, the Consumer Financial Protection Bureau (CFPB) said millions of Americans’ credit scores are being “overly penalized” by medical debts in collections.

So how do you know if your credit score will improve because of the new model? Basically, if your credit score is low as a result of unpaid medical bills or bills that went into collections that you later paid, you are likely to get a significant boost from FICO 9 when it takes effect.

Remember, you have the power to boost your credit score by following these “money smart” moves:
• Pay your bills on time.
• Keep your balance on credit cards below 30% of your total credit limit at ALL times.
• Using credit as early in your adult life as possible.
• Keeping a good mix of credit accounts on your credit report.
• Applying only for credit that you actually need.

If you are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:
http://www.nerdwallet.com/blog/health/2014/08/08/new-fico-score-boost-credit-medical-bills-focus/

Credit Repair Company GUILTY of Deceiving Consumers and Lying to Credit Bureaus

July 8, 2014 Posted by kingcade

RMCN Credit Services, Inc., one of the nation’s largest credit repair companies, has been ordered to pay $2.35 million in civil penalties after it violated federal law by deceiving consumers and lying to credit bureaus. The company reportedly would charge consumers up-front fees- as much as $2,000 before rendering services. The court order bars the defendants, Doug and Julie Parker, the owners of the company, from similar conduct in the future. The company is also required to submit reports to the Federal Trade Commission (FTC) for a decade to ensure that it is incompliance with the terms of the order.

According to the FTC, the company “continued to send deceptive dispute letters to credit bureaus even after the company received detailed billing histories or signed contracts from creditors proving the credit reports were accurate. RMCN also falsely told consumers that federal law allowed it to dispute accurate credit report information and credit bureaus must either prove it or remove it.”

If you are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:
http://bizbeatblog.dallasnews.com/2014/06/credit-repair-company-settles-with-feds.html/

Men vs. Women: Does Gender Matter when it comes to Debt?

April 15, 2014 Posted by kingcade

While no person falls neatly into statistical averages, understanding the differences between men and women when it comes to debt management can help couples understand each other’s “money personalities.” According to credit counselors interviewed in a recent study, women more often handle the household budget, paying bills and spending money on necessary and discretionary items.

Because of this day-to-day spending responsibility, women carry more guilt for debt woes, which can be compounded if their spouses blame them. Women appear to shy away from debt compared with men, according to an Experian analysis released last year. On average, men carried 4.3% more debt than women. Their mortgages were also 4.9% higher than home loans taken out by women. The study also found that women used less available credit on their credit cards than men- 30% versus 31%.

While men may appear to be more comfortable taking on more debt, they also get into financial trouble more often. Experian found that men were more likely to fall 60 days or more behind on their mortgage payments than women – 5.7% versus 5.3%. Despite having more problems handling a larger debt load, men seek help later than women, according to credit counselors.

Several of the counselors interviewed said women respond to financial crisis by eliminating items on the household budget, where men work more to increase the income to get out of debt. The best solution is a combination of both along with an understanding between the two spouses.

If you have any questions on this topic or are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Related Resources:
http://www.foxbusiness.com/personal-finance/2014/04/02/men-women-and-debt-does-gender-matter/?intcmp=related