February 2019 - FREE CONSULTATION

Credit Cards Are a Way of Life for Most Americans

Posted on February 28, 2019by Admin

For many Americans, credit card debt has become a way of life. According to CreditCards.com, more than 39 million Americans have carried some form of credit card debt for at least the last two years. While using a credit card responsibly can help establish credit, it can become problematic when the debt accumulates.

Credit card companies camp out at universities, promoting their cards to students at colleges and offering free gifts for those who sign up that day. The problem is, many of these students have no idea how to pay off debt and see these cards as a way to buy products without any consequence. Before they know it, these cardholders are carrying a balance they have no way of paying. According to the survey from CreditCards.com, eight million of those surveyed say they do not remember a time when they were not in debt.

The CreditCards.com survey was conducted by YouGov, who surveyed over 2,500 adults. Of those surveyed, 1,780 were credit cardholders and 1,040 of them carry debt on these cards. These cardholders are not charging unnecessary expenses, however. In fact, most of the individuals surveyed said that they used their credit cards to pay for daily spending on necessary expenses, such as groceries or utilities, or on emergency expenses, including medical bills and car repairs.

The survey also reported that the millennial generation was the group that was the most concerned about credit card debt. Due to their high level of student loan debt, many of these younger consumers are not able to cover their daily living expenses on top of their student loan payments.

While the consumers surveyed who were in older generations who use credit cards to pay off medical expenses, millennials say they have no choice but to resort to credit cards to pay for food and living expenses. When the bill arrives, they are not able to pay off the balance in full.

The key to handling credit cards successfully is to not let the balance get out of hand. If possible, pay the balance down monthly after using the card for required expenses. Since the average interest rate is at 17.55 percent, carrying a balance from month to month can make it nearly impossible to pay down the debt. Minimum monthly payments will only allow the cardholder to pay off any interest accrued during that monthly billing cycle.

If you are struggling to pay off credit card debt, certain tips can be helpful in dealing with the debt. One tip is to not fall victim to companies promising rewards for spending on their cards. If you are paying the balance off in full every month, the rewards offered can be beneficial, but if you are carrying a balance and still using the card to earn rewards on top of the balance owed, you are only making the situation worse. If your credit card has a high interest rate, consider a balance transfer to a new card with a lower interest rate. However, be sure that you know what the promotional period is for that card so that you pay off the balance before the promotional time expires. Otherwise, you may end up with an even higher interest rate when all is said and done.

People living in the Miami metro area, which includes both Fort Lauderdale and West Palm Beach, carry the second-highest credit card debt balances in the country, second to San Antonio, Texas.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt. We offer additional tips for eliminating credit card debt on our blog.

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If you have 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 McMaken 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 McMaken website at www.miamibankruptcy.com.

Foreclosures, Timothy Kingcade Posts

National Mortgage Delinquencies on the Decline While Foreclosure Rates Spike

Posted on February 27, 2019by Admin

Mortgage delinquencies are on the decline nationwide, according to the most recent Black Knight First Look report. The mortgage delinquency rate fell 3.75 percent for all loans in the month of January, which is down 3.45 percent from December 2018. While that decrease may not seem significant, it is when compared to one year ago. In fact, mortgage delinquencies are down nearly 13 percent from January 2018.

Black Knight, Inc., provides integrated technology services in addition to data and analytics to mortgage and real estate industries. They provide this First Look report annually to review where statistics are nationally and from state-to-state when it comes to foreclosures and mortgage delinquencies.

According to the report, approximately 1.945 million properties were 30 days or more past due in January 2019. This figure is down 68,000 from December 2018. When compared to January 2018, the numbers are down by approximately 257,000.

Additionally, Black Knight reported that 504,000 homes were at the point where they were considered “seriously delinquent,” which means the mortgages were more than 90 days past due but were not yet in foreclosure. This figure is down 7,000 when compared to December 2018 but 203,000 from January 2018.

Homes that were reported in the pre-sale inventory category, meaning homes that were in some stage of the foreclosure process, were down approximately 60,000 from December 2018 and down 72,000 from January 2018, which is in line with the rest of the trends reported. The foreclosure inventory rate was 0.51 percent of all homes still holding a mortgage. This figure shows a 2.20 percent decrease from the prior month and a 22.43 percent decrease from January 2018.

Interestingly enough, Black Knight did report that approximately 50,200 foreclosures were started in January 2019 nationwide. This figure is actually an 8.42 percent increase, as compared with December 2018. It is still down 19.42 percent, however, when compared with the previous year.

The rate for monthly prepayment was at a 10.15 percent decrease in January, as compared to December 2018. It also showed a decrease of about 25 percent from January 2018, which was also the lowest level reported since before the end of 2000.

Why is the decrease in the monthly prepayment rate significant? A prepayment is a settlement of a debt or installment payment made before the payment’s due date. It can be made for either the entire balance owed or for an upcoming payment that is paid in advance of the due date. The fact that these prepayments have gone down is unusual since prepayments are typically more common when delinquency rates decrease. It would go along with the trend for the prepayment rates to go up rather than the other way around.

Black Knight does not believe this is cause for concern since housing turnover tends to go down in January and February traditionally. Prepayments could pick up again throughout the spring so long as delinquency rates remain low or where they are.

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Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.blackknightinc.com/black-knights-first-look-at-january-2019-mortgage-data/

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Millennials Hold Over $1 Trillion in Debt

Posted on February 26, 2019by Admin

With the increase in student loan debt, it is hard to ignore the effects it is having on a particular generation. The most recent statistics reveal that “Millennials,” individuals who were born after 1982, hold more than $1 Trillion in debt – much of that being student loan debt. In fact, the amount has risen 130 percent since 2008. These figures come from the New York Federal Reserve Consumer Credit Panel and are the highest debt levels reported since before the 2007 recession.

Most students end their undergraduate careers with an average of $37,000 in student loan debt. If they choose to move onto graduate studies, that debt can reach six figures before the student is done. Following graduation, most of these students are struggling to meet basic living expenses on top of meeting their monthly student loan payments.

The student loan debt burden has also impacted millennials’ ability to purchase a home. Consumer debt is reported at a record high of $13.5 trillion. Mortgage debt constitutes most consumer debt nationwide, but that is not the case for the millennial generation. Since 2009, mortgage debt increased by only 3.2 percent while student loan debt jumped 102 percent.

Overall, student loans make up the second largest category of consumer debt. Credit cards and auto loans follow. At the end of 2018, car loans made up the third largest percentage of debt in the U.S., followed by credit card debt.

If a borrower is not able to maintain payments on his or her student loan debt, the damage that results to that person’s credit can be significant, and this hit to a credit score can seriously hurt the person’s chances of obtaining a mortgage down the road. This fact could be another reason why fewer millennials are taking out mortgages.

Student loan debt is different from other types of debt. It is currently estimated that somewhere around 40 percent of all student loan borrowers will default at some point on their student loans. Many different mistakes can be made when it comes to student loan repayment. If you believe you qualify for student loan debt relief, speak with an experienced bankruptcy attorney about your options.

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all 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 McMaken 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 McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.badcredit.org/average-student-loan-debt/

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

The Top Ways To Get Out Of Debt

Posted on February 25, 2019by Admin

Debt is a weight that can drag you down and make you feel like you are drowning without any way out. Having extreme debt can affect your health, happiness and personal relationships. Getting out of debt can be an even bigger struggle, if you do not devise a plan that works for your specific situation.

Debt Consolidation

One popular method of paying off debt is through debt consolidation. What consolidation means is the consumer’s debt is combined into one, single debt amount owed. Debt consolidation can be done through many different methods. A consumer can apply for a personal loan or consolidation loan to pay off all of the debts with the monies from the loan. This method allows you to only make one payment to one creditor rather than multiple creditors. With this method, we strongly advise that you do your research. Not all debt consolidation companies are reputable, and it is important you understand the terms of the loan before signing on the dotted line. For most debt consolidation loans, you need good credit to be approved. If you are already struggling financially, many lenders will see you as a risky bet and will avoid lending to you without a co-signer or at least some collateral to secure the debt.

Credit Counseling

Many different credit counseling resources exist, and they usually involve a professional counselor who will work with the debtor on understanding his or her financial situation and researching possible options to get out of debt. Credit counselors often will work with the individual to organize and manage their debt, and the counselor will also contact the debtor’s creditors on payment arrangements, including creating payment plans or negotiating lower interest rates. Credit counselors can also put together a debt management plan that allows the debtor to make lower monthly payments through the debt counselor who, in turn, pays the individual’s creditors.

Like debt consolidation companies, it is important that you do your due diligence in choosing a credit counselor. Less-than-reputable agencies do exist, so make sure you choose someone who has your best interests in mind. Know that a credit counselor cannot make certain promises, such as guaranteeing that your creditors will work with them or that they will be able to directly reduce your debt. While they can certainly work towards that goal, lenders are not obligated to work with credit counselors. If a ‘credit counselor’ is promising you this or telling you that they can completely eliminate your debt by having you pay a low monthly payment to them, this is a BIG red flag.

Debt Settlement

Another potential option for paying off debt is through debt settlement. This process normally involves a third-party company that works with a debtor’s creditors to allow the debtor to pay a lower amount than what is owed. However, with this option the likelihood of scams is very high. Many of these companies have been reported for taking the debtor’s money and never negotiating on the debt. Additionally, debt settlement can result in a person’s credit taking a rather serious hit due to the fact that the debtor will normally have to stop making payments to the creditor, pushing the accounts into default. Unless the creditor agrees to work with the debt settlement company, a judgment can easily be issued against the debtor, resulting in wage garnishment to satisfy the debt.

Filing for bankruptcy

Debt can be complex and oftentimes frightening to deal with. Many times, people are hesitant or feel ashamed to ask for help. However, not properly dealing with debt can only make problems worse. Rather than run the risk of being sued by a creditor or have your wages garnished, it is best to deal with your debt head on. There are a number of debt relief options available, including filing for bankruptcy, which can completely wipe out unsecured debts like credit cards, medical bills, personal loans and more- and give you a fresh financial start. Exploring these options with the guidance and support of an experienced attorney can help you make the right decision.

Do not let your debt cost you another sleepless night. Here are some of the signs that bankruptcy is right for you. 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 McMaken 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. The consultation is free, the relief is real! You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Uncategorized

Common Mistakes People Make When Paying Down Debt

Posted on February 22, 2019by Admin

Credit card debt is one of the biggest problems facing those with serious financial challenges. While using a credit card responsibly can be a good way to establish credit, things can quickly get out of control when a person relies too heavily on credit cards and does not have the ability to pay off the balance every month. Paying down credit card debt can be a struggle, but many common mistakes people make when trying to pay down their debt can make that process even more difficult.

Not Addressing the Cause of the Debt

Credit card debt can add up quickly if you run into an unexpected situation, such as a job loss or medical crisis. Credit card debt can also accumulate quickly if you rely on your credit cards too much for every day, smaller expenses. If you spend more than you are making each month, and cover the overage with a credit card, these expenses can add up quickly. It pays to thoroughly review your financial situation and spending habits to see what is causing the debt and establish a spending budget that fits your income.

Adding to the Balance While Paying on the Card

If you truly want to pay down credit card debt, it is important to stop adding to the balance. Many times, people will think that they can pay off the debt while continuing to use the card. However, all this does is add new charges to an old balance that is already accruing monthly interest. No matter how disciplined you may be with paying off your new expenses every month, you may find yourself never truly making progress on the outstanding principal until you stop using the card completely. It is advisable to cut up the credit card (so you are never tempted to use it) and still pay off the debt each month. Do not call and close out the card. Depending on your total available credit, closing a credit card account with a high credit limit could hurt your credit score, particularly if you have high balances on other loans or credit cards.

Not Effectively Utilizing 0% Interest Balance Transfers

Many times, consumers will utilize promotional balance transfer offers to pay off debt by transferring credit card debt on a higher-interest card to a zero-interest card. However, if the person continues using the card and accruing a balance, he or she may never be able to successfully pay down the amount due before the promotional period ends. Once that period does end, the cardholder will be stuck with an even larger interest rate than he or she had previously.

Not Having a Plan

If you want to be successful in paying off your credit cards, you need to have a plan. One mistake many cardholders make is to make payments without any real plan when an unexpected windfall, such as a bonus or tax refund, is received. If you receive a large sum of money, it can be tempting to put all of that money towards a large balance, but it can also be helpful for the future to put that money towards a savings so that an emergency fund exists in the event it is ever needed.

It also helps to put together a plan that will actually work when paying off credit cards. If you have more than one, it helps to take one card, focus your effort on that card and then put the money that you are putting on the first card once it is paid in full to go to the next one and so on. This method is often known as the “snowball method,” and many debtors have had a great deal of success with this debt payoff plan. However, make sure to keep paying the minimum payment on the other cards while paying off the first one to avoid falling into default.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

What It Means to Commit Bankruptcy Fraud

Posted on February 21, 2019by Admin

When filing for bankruptcy, it is extremely important that you fully disclose all information requested and that all information provided be accurate and true. Although, most people who file for bankruptcy are honest hardworking people, some individuals can be tempted to hide property and assets. This is called bankruptcy fraud, which is a federal crime that the U.S. Department of Justice takes very seriously.

Bankruptcy fraud occurs when a person knowingly and fraudulently commits certain prohibited acts in their bankruptcy case. It is estimated that somewhere around 10 percent of all U.S. bankruptcy filings include some form of bankruptcy fraud. If this fraud is discovered, the person committing the fraudulent act can face fines up to $250,000 and even imprisonment for up to five years in federal prison.

The four most common types of bankruptcy fraud include: concealment of assets, petition mills, multiple-filing schemes, and bust-out schemes. It must be shown that the person intended to commit the crime of bankruptcy fraud, which means that intent to deceive must be present. The person must have planned to commit the fraudulent act. If, for instance, someone makes a mistake in their forms or accidentally forgets an asset when preparing the documents, fraudulent intent is not necessarily there.

One of the most common types of bankruptcy fraud is concealment of assets. Concealing assets accounts for approximately 70 percent of all bankruptcy fraud cases reported. A person should never assume they can outsmart the bankruptcy court. Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to hide assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you listed in a subsequent bankruptcy filing.

Another form of bankruptcy fraud is making false statements either in sworn documents filed with the court or in person to the bankruptcy trustee. Debtors are required to fill out a bankruptcy petition and a number of other supporting documents, which includes a schedule of income and assets as well as a sworn financial declaration. By submitting these documents, you are swearing that all information provided is completely true.

Bankruptcy fraud can also be committed by someone filing too many bankruptcy cases in two or more states. These filings can be made using the same name and information or also false name and information, so long as they were filed by the same person. In these types of cases, the debtor will list the certain assets on some claims while other assets on the others, thus confusing the system. The ultimate goal of these multiple filings is to keep assets from total liquidation, giving the person time to conceal assets he or she wishes to keep.

Another form of bankruptcy fraud that seems to focus heavily on non-English speaking claimants involves bankruptcy petition mills. These “mills” are fraudulent schemes committed by a third-party, where that person claims to be a consultant who can help someone avoid eviction. That person gets all of the tenant’s information and files a bankruptcy petition without the tenant ever knowing. While the bankruptcy case is pending, the perpetrator of the crime will often completely clean out the tenant’s bank accounts and destroy his or her credit. Sadly, these types of schemes are on the rise, especially in areas where many non-English individuals reside.

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Bankruptcy Law, Credit Card Debt

A Growing Number of Americans Have More Credit Card Debt than Savings

Posted on February 20, 2019by Admin

Many Americans are fighting a never-ending battle between saving money and barely making enough to pay their day-to-day expenses. More and more Americans are relying on credit cards to not only pay for big expenses but everyday expenses, resulting in a major imbalance when it comes to credit card debt and emergency savings. In fact, for many Americans, that emergency savings is essentially non-existent.

According to a new study published by the personal finance company Bankrate, nearly 30 percent of Americans have more credit card debt than they do money in savings. This number is up from 2018 when 21 percent claimed they had more credit card debt than savings.

The increased reliance on credit cards could be indicative of the fact that many households are under a great deal of financial strain. According to Bankrate, 41.2 percent of households nationwide carry some level of credit card debt with the average balance being $5,700. Income may be increasing at a rate of about three percent annually, but the cost of living is surpassing that. Oftentimes, the increase in pay does not keep up with the jump in basic living costs.

According to Federal Reserve data, 39 percent of American consumers say they have enough money in savings to cover a $1,000 car repair or unexpected emergency room visit. The level of savings, of course, does vary by income classification. In 2018, the median American household had $11,700 in savings, but for those who do not have enough to meet even just a $1,000 bill, this amount of savings is never realized.

The recent government shutdown did not make this financial situation any easier for many struggling consumers. The shutdown and lack of pay forced government workers to take on debt just to keep up with expenses, which added to the debt many already carried before the shutdown occurred.

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Bankruptcy Law

Famous Celebrities Who Went Bankrupt before Becoming Rich

Posted on February 19, 2019by Admin

Sometimes you have to go through hard times before you make it big. In fact, many famous people did just that before they became successful. They represent your typical rags to riches stories, and these life stories go to show that even the most successful people struggle on their way to the top. For individuals thinking of filing for bankruptcy, these stories often give them hope that filing for bankruptcy will be the beginning of greater things to come.

Dave Ramsey

Dave Ramsey is known for his financial advice, so it may seem hard to believe that even he struggled financially at one point in time. However, even his rise to the top had its peaks and valleys. He started with a great deal of real estate holdings through his brokerage firm, Ramsey Investments, but his real estate success was not long-lasting. His holdings ended up being leveraged, resulting in creditors calling in their debts. Ramsey eventually filed for bankruptcy. After bankruptcy, he went a different direction and focused his efforts on financial counseling for his local church. He attended workshops on consumer financial issues and used this knowledge to build his own seminars. Now he is known for his first book and subsequent programs titled Financial Peace. His net worth is over $55 million, and individuals all over the world swear by his program in their own financial success.

Abraham Lincoln

You would not assume that one of our nation’s most famous presidents would have filed for bankruptcy, but it is true. In his 20s, before he entered politics, Lincoln and a partner opened a general store in Illinois, buying their store’s inventory on credit. However, as business did not sore, their debts were not paid off. He ended up selling his sake in the store, but after his business partner died, Lincoln was on the hook for over $1,000 in debt. While technically bankruptcy did not exist at that time, he worked out a payment plan to repay his creditors successfully over the span of 17 years.

Walt Disney

Orlando, Florida is well-known for one specific name, and that name is “Walt Disney.” Like the others mentioned, you would not think that Disney would have gone through something like bankruptcy, but it is, in fact, true. He was barely out of his teen years when he filed for bankruptcy. Disney formed a company called Laugh-O-Gram Studio in 1920 where he made animated fairytales. He formed the company on the assistance of a financial backer, but after that source went broke, Disney was not able to pay off his debts, let alone his animators, forcing the company to file for bankruptcy one year later. He obtained a family loan in 1923 when he started a new company. Five years later, Disney created Mickey Mouse, and his career and the company took off. Disney almost had to file for bankruptcy in 1937 upon the release of Snow White and the Seven Dwarfs, but he was able to get a bank loan to finance the movie. The company took off even further from that point, resulting in the rest of the classic movies we all know and love.

P.T. Barnum

Even the creator of one of the greatest shows on earth went through his fair share of financial struggles. P.T. Barnum is one of the founders of Ringling Brothers and Barnum & Bailey Circus, a show that lasted from 1871 to 2017. Barnum began his career at 25 when he purchased the Scudder’s American Museum in New York City, one of the most popular attractions in the city at that time. However, the building burned down five times, resulting in Barnum to continually put out money to refurbish the building. The cost of keeping up with building expenses was not supported by the museum’s revenue, forcing him into eventual bankruptcy. He ended up conducting lectures on “The Art of Money Getting,” which allowed him to repay his past debts. It was not until he was 64 when he joined forces to create one of the most famous circus attractions of all time.

Willie Nelson

Willie Nelson is one of the most well-known country singers of all time, but even Nelson struggled financially. Growing up during the Great Depression, his family struggled to pay their living expenses, and Nelson even had to pick cotton to earn money for his family. Oddly enough, his cotton picking sparked his desire to perform. At age 13, he chose to sing in local dance halls to earn money. He became a disc jockey at a local radio station in Texas, which allowed him to do his own recordings, thus sparking his career. While he never formally filed for bankruptcy, he went through extreme financial difficulties after the IRS claimed he owed over $32 million, resulting in them seizing his assets in 1990. He was able to eventually settle the debt, but it was definitely a defining experience for him. He even released an album called The IRS Tapes: Who’ll Buy My Memories. All profits from the sale of that album went directly to the IRS.

Elton John

Another famous singer, Sir Elton John, went through his own financial struggles. He first came onto the music scene with the release of the single Your Song in 1970. After that, he released hit after hit, resulting in enormous fame and wealth. He lived quite the lavish lifestyle, and eventually in 2002, that lifestyle caught up with him. He declared bankruptcy after properties he owned incurred a large amount of debts. It is estimated that he spent somewhere near 1.5 million British pounds monthly around that time, which definitely led to his financial issues. However, he has managed to bounce back after he entered into a contract to perform in Las Vegas at Caesars Palace in 2003. He also contributed on several Walt Disney movies, including The Lion King, resulting in a steady cash flow, bringing his wealth currently to approximately $450 million.

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Credit

Qualifying for a Home Mortgage with Bad Credit

Posted on February 18, 2019by Admin

A low credit score does not have to keep you from buying a home. Reviewing your credit score is a part of the mortgage approval process. What is considered “bad credit” when it comes to a mortgage or home loan? Ultimately, that designation can depend on the lender. Not all lenders have the same guidelines when it comes to determining what is bad credit. Many lenders specialize in working with clients who have a less than perfect credit rating.

For the most part, the base credit score to be approved for a regular home mortgage is 620. Some lenders will require the score to be higher, while others may permit a lower score. It helps to check your credit score before you contact a lender so that you are aware of where you stand on the credit spectrum. Most lenders will use FICO credit scores for determining whether to approve a home mortgage. Scores can range anywhere between 300 and 850.

A poor credit score may not prevent you from obtaining a mortgage, but it can certainly affect the interest rate offered with the loan. The better the credit score, the lower the interest rate will often be.

If you have a score of 620 or below, you may consider applying for a government-backed Federal Housing Administration (FHA) loan if you are not eligible for a Veterans Affairs (VA) loan. However, some FHA lenders may require a score of 620 to 640 for approval.

You can still get a conventional mortgage not through a federal government-backed lender, although it is easier to qualify with government lenders with less-than-stellar credit. Lenders will look at a number of factors when determining whether to offer you a home loan, including the down payment amount, the types of property desired, the maximum debt-to-income ration allowed, the minimum income allowed for the loan, and lender fees. It is always a good idea to shop around when looking for a home mortgage, and never take the first offer. Review the different options available to you before making a selection.

If you have a bad credit score and still would like to be approved for a home mortgage, you can improve your chances by getting a co-signer. A co-signer is someone whose credit score is better than yours and whose financial situation can help you be approved for the loan. That person will sign on the mortgage documents with you and will be equally responsible for the obligation. It is a big decision to make since your inability to pay the loan will negatively affect the co-signer’s finances, as well. Before you contact a relative to see if he or she will co-sign, review your financial situation to make sure you can make the payments regularly. If you cannot, it may be advisable to find another alternative.

It can also be helpful for the borrower to make a larger down payment when purchasing the home in lieu of finding a co-signer. Making a larger payment upfront will decrease the risk of default, making the lender more likely to issue the loan.

If you have time and can hold off on purchasing a home now, it may be advisable to work on your credit score to improve it so that you will be approved for the best loan possible.

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Credit, Debt Relief, Timothy Kingcade Posts

Errors on Credit Reports Lead to Major Life Disruptions for Thousands

Posted on February 15, 2019by Admin

It is always recommended that you review your credit report periodically to ensure that no errors exist in your credit history. If you do discover a discrepancy or error on your report, it is recommended you contact the credit agency to have the problem fixed. For the most part, after this is done, you expect the error to disappear and not create any problems in the future. What if that does not happen? That scenario was the case for thousands of American consumers who later discovered that what they thought was fixed came to haunt them at a later date.

Thousands of Americans have been fighting legal battles related to errors found in credit reports by all three of the nation’s largest credit reporting agencies, Equifax, Experian and TransUnion. Not only are these individuals fighting legal battles, but they are feeling the effects on their credit scores. Credit errors can also lead to mistaken identity if one person who has excellent credit happens to be mixed up with someone who does not. For some, these errors have caused their credit scores to tank so much that they have lost the ability to be considered to rent an apartment or for a job. By the time the error is fixed, it is often too little too late for that person. The job may already be filled at that point or apartment rented.

It is estimated that in the past three years, more than 4,000 federal lawsuits have been filed against Equifax by litigants who claim that the credit reporting agency failed to follow federal law with respect to fair credit reporting. Other cases were filed locally via state court. According to the Consumer Financial Protection Bureau (CFPB), 175,000 complaints were filed with the CFPB between 2015 and 2017 regarding credit report errors. Of these complaints, 65 percent of those filed in 2017 had to do with information that was incorrect.

Some of these errors can occur when people who have similar names, addresses or even Social Security numbers are mixed up. One way or another, their files cross paths, causing information to be mixed up and incorrect.

However, one major problem has to do with how much credit bureaus can get away with when it comes to accountability. It can be extremely easy for them to avoid a full and comprehensive review.

In response to many of these court filings, Equifax has argued that it has procedures in place to ensure that their reports are accurate. They dispute any responsibility and say that banks and credit card companies that provide this information to Equifax are the entities who should be held responsible. Attorneys representing the consumers involved insist that these errors are mostly the fault of the credit reporting agencies, especially when it comes to consumers being mixed up if their names or information is close or similar. Many times, these agencies do not require information used to sort consumers to be an exact match which can lead to these problems.

This problem is not a new one by any means. In 1992, Equifax came under fire after attorneys general in 18 states claimed that mixed consumer files caused damages these individuals. At the time, Equifax told regulators that they would put procedures in place to detect these errors when they occur. However, whether these procedures were actually effective is debatable.

The Federal Trade Commission (FTC) claims that one in every five American consumers has an error on their credit reports. Many of these errors go undetected by consumers.

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