Teens and Money: We Could All Learn a Little More

Posted on May 16th, 2013

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If you’re a parent, your teen has probably already told you how much they know and how much you don’t know.  Here are a few statistics we’ve pulled together from different surveys of teens nationwide.  The numbers may surprise you (then again, maybe they won’t!).

Did you know that 60% of surveyed teens say they know the difference between a credit and debit card, but only 31% say they understand how credit card fees and interest work?

Did you know that 77% of teens claim they know about money management, saving and investing; yet only 38% admit they know how to establish good credit?

Did you know that teens view “Cost of College” as the most talked about subject with their parents? “Clean Your Room” and “Drugs and Alcohol” come in at 2^nd and 3^rd place.

Did you know more teens would rather talk to their parents about investing money than their future choices of careers?

You’re hot. Your credit score is even hotter.

Posted on May 13th, 2013

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You know that times have changed in the dating scene when “What’s your sign?” has been replaced by “What’s your credit score?”

If a credit score weighs in another’s decision to grant you a mortgage, hire you for a job, or give you a credit card, it’s not as unreasonable as many would think for a credit score to help determine the suitability of a mate as well.  Financial advisors in fact, liken one’s credit score to the results of a test for sexually transmitted diseases: both tell about a person’s past, and issues that a romantic interest may have to deal with in the future.

A person’ quest for a great partner — who also has a good credit score — has no gender bias, either, as questions about someone’s financial health comes out of men’s mouths just as much as from women’s.  Even online dating sites like Creditscoredating.com, “Where good credit is sexy,” takes online dating to a whole new level by finding potential matches not only based on age and location preference, but also by preferred credit score.

So why are so many couples putting marriage on hold until their financial houses are in order?  Although it’s easy to say “It’s OK that my fiancee’s credit is bad; we’ll just put all of our credit cards under my name instead of hers,” the fact remains that both credit scores will still be considered for car insurance rates and apartment applications.  And later, when it’s time for the big joint purchases such as cars and homes, it’s a given that both partners’ credit will have to be considered if one person’ income and net worth isn’t sufficient to cover the note.  That’s not to say that a lower score can rule someone completely out of finding love, but protecting assets, making sensible money decisions, and working on a good credit are all part of a great couple’s plan for the future.

Elderly Identity Theft: Now Let’s Prevent It

Posted on May 10th, 2013

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Part Two of Two on the growing issue of senior citizens as targets

Last week we looked at a few of the relatively easy methods for identity thieves to prey on the elderly, from the familiar yet damaging online phishing and phone schemes, to outright theft of wallets and personal information at elder care communities, to manipulative tactics by a family member to use a good credit history or social security number.

So if you’re close to an elder, or perhaps you’re a senior yourself, what can you do to prevent this ugly theft?  Here are a few easy but essential actions to take immediately:

Most importantly, keep the Social Security Number safe.  Lock the card in a safe place, along with any other personal information (such a Medicare card) that displays the SSN.  Instead of showing the Medicare card at each visit to the doctors’ office, ask that they keep a copy in the patient file, which is protected by HIPAA law.

The same caution applies to credit cards and unused checks.  Rather than keeping these in an obvious place like a purse or wallet, lock them in a safe location, or give the cards to a trusted person to hold until needed.

Keep an eye on the mail, and know when you should receive certain statements or bills (including utility bills).  If your mail doesn’t arrive when it should, thieves may have stolen it for easy gathering of personal information.

The best bet to avoid receiving unwanted credit card applications and other publications is to call the individual companies and opt out of the mailing lists.  If this isn’t possible, be sure to shred this mail when it arrives.

Set a fraud alert on the credit with each of the credit bureaus (Equifax, TransUnion and Experian) that will notify a person when there is a request to increase a credit limit, open a new credit card account, or add a card to an existing account.

And finally, remember to check the credit report often for any sign of an account that wasn’t authorized.  If something isn’t right on the report, immediately cancel the account and report a stolen identity.

Sneak Peek: ScoreSense Blog Redesign

Posted on May 8th, 2013

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Sneak Peek! – New Blog Coming Soon…..

Here is a sneak peek of our newly redesigned blog.  We should be going live with this in the next few weeks.  Besides a new look and feel, here’s what we are doing to improve your experience;

1. The blog will now be responsive for our audience who enjoys viewing content on tablets and/or mobile devices. 
2. We’ve added a “Suggest A Topic” section so you can recommend specific topics you’d like us to research and discuss.
3. We will be opening up the blog for comments so we can have ongoing discussions with our users.
4. Categories will be color coded in an effort to make it easier for our users to find the content that most interests them.
5. Enhanced sharing capabilities will allow our users to share content in many different ways.

We are still working on additional features and functionality.  Once we go live, we’d love to hear from our users on how we can continue improving the overall experience.

College Kids and Credit Cards: Did You Know?

Posted on May 6th, 2013

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Did you know that the Credit Card Act of 2009 restricts people under the age of 21 from applying for a credit card unless they can prove sufficient income or have a parent, guardian or spouse cosign?

Did you know that the Act also restricts credit card companies from sending mailers to students under 21, or offering free gifts or food to encourage students to apply for a card?

Did you know that before Congress passed the Act, student loan corporation Sallie Mae reported that the average college student carried at least four credit cards with a debt of $3,173?

Did you know that as an option, parents can add their son or daughter onto their credit account as an authorized user, taking advantage of the opportunity to teach them about good credit practices?

Did you know that debit cards and prepaid cards can give young adults the independence and convenience of a credit card without the risk of spending over the limit and incurring high credit card debt?

Identity Theft of Our Elderly: Who’s Stealing?

Posted on May 1st, 2013

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Part One of Two on the growing issue of senior citizens as targets

Although identity thieves readily use many of the same schemes on victims of all ages, particular methods against senior citizens make this type of fraud even easier.

Perhaps the easiest targets are elderly men and women who live in retirement homes, nursing homes, and assisted living centers.  Many centers are unfortunately lax in inventorying and safeguarding belongings when a new resident arrives, and her personal information is often available and unprotected.  Seniors’ wallets hold not only credit cards, but also Medicare cards, which display the owner’s SSN.   Unscrupulous people who have access to these seniors know that any accusation of a stolen wallet from an overly trusting elder, or from one suffering from dementia, is tough to prove. The son of an elderly Arizona man, for example, worked tirelessly to help catch the person who stole his father’s credit cards – only to find that the thief was actually a caregiver in his father’s assisted living center.

Another type of identity theft that shows surprisingly large numbers (more than two million affected, according to the security firm ID Analytics) is happening in the elder’s actual family.  The fraud commonly reveals itself when there are two people using the same Social Security Number with the same last name, but different first names.  Other, less “documented” theft ranges from manipulating an elderly parent or grandparent into giving his or her password for bank or investment accounts, to obtaining their signature as a co-signer for a loan or cash advance, or filling out and returning a credit card application received in the mail.  Many times, victims will never report this silent act of betrayal, choosing instead to endure collections calls and tarnished credit reports, or even relenting to pay the bills themselves.

Since these innocent victims are often unable to report the crime, or are too embarrassed to, how can we help?  We’ll have answers in Part Two next week.

“How Can I Improve My Credit?”

Posted on April 23rd, 2013

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It’s a question our customers ask frequently, so we’ve gathered some tips collected from some of the nation’s financial institutions that deal with consumer credit every day:

Using your credit cards can be tricky, so think smart when you use them.  Ironically, even if you pay your bills in full every month, racking up large balances can put a dent in your scores.  On the flipside, consumers are told to use their credit when needed, and keeping a low balance can actually increase your score.  When they’re considering giving you a loan, lenders like to see a good payment history.

We all like to shop, but a lot of shopping for credit can reflect negatively on your report as well. BMO Harris Bank tells us that every time you apply for a credit card or loan, the inquiries appear on your report, so keep your applications to a minimum.  Transferring balances, or combing all your credit card balances onto a single card may negatively mark your credit as well.

Requesting and checking your own credit report shouldn’t affect your score as long as you order it directly from a company authorized to provide consumer credit information.

Yes, fixing the errors on your credit report is important when you’re planning to buy a home or car — but keeping your credit report consistently healthy for the long haul lets you take advantage of lower interest rates when the banks compete for your business.

Have You Checked Your ChexSystems Report?

Posted on April 19th, 2013

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Yes, we pay close attention to the all-important three digit number that tells us (and the rest of the world) about our credit worthiness.  There is another report, however, that is less known yet potentially important as well – especially for consumers who may have had a few slip-ups with their checking accounts.

We’re talking about a ChexSystems report, operated by ChexSystems, Inc., a company that interfaces with banking institutions across the country to gather information about particular activities and behaviors with consumers’ checking and savings accounts.

So what kind of information does ChexSystems collect?  Bounced checks, overdrafts, and final debits on closed accounts to name a few.  These “black marks” stay on your ChexSystems reports for up to five years and can affect a bank’s decision on allowing you to open a new account, or extending lower interest rates on loans.

While the majority of our nation’s banks (approximately 90%) take the ChexSystems information seriously, they are unfortunately under no obligation to tell consumers about the negative information on the report until after denying the account.  For individuals who have already closed a bank account before seeking another, this information could leave them completely unbanked for some time.

The good news is the Fair and Accurate Credit Transaction Act (FACTA) amendments to the Federal Fair Credit Reporting Act (FCRA) allow each of us to request a free copy of our ChexSystems report once a year if you request it within 60 days of being rejected from opening a bank account.  And, if you haven’t been declined but still want to see what may be sitting on your report, you can order one from their website and pay $9.00.  If you find a mistake, you can work through the dispute process in the same manner as the big three credit reporting agencies.

Here’s a Dustpan. We’re Cleaning House.

Posted on April 17th, 2013

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It’s a mantra that our moms seared into our minds as we grew, but it’s always worth repeating: It’s time to clean up.  This time, though, we’re talking about cleaning up our finances.  Although the spring is a great time to clean out files (after you’ve plowed through receipts and filed your income tax return) and reassess your financial picture, any season when you make time to clean out your financial house will bring positive results.

You know the scene:  you’re flipping through a stack of mail that’s been on the kitchen counter for a handful of weeks, and DOH!  You find an unpaid bill that’s now past due.  How do you avoid this in the future?

Organize, organize, and organize some more:

Ongoing Bills.  Financial guru Suze Orman says it best: “When you consciously open, read, and file away your bills and statements, you are connecting with your money and taking control of your life.”

Tax Returns and Supporting Documents.  The general rule is to keep your returns for three to seven years, depending on your circumstances and type of return. The IRS website provides guidelines and instructions, particularly for those who own a business.

Investment Statements.  Financial experts recommend keeping any documentation that supports your income tax statement for at least six years.  Once you have your year-end investment statement, you can shred the monthly statements.

A Permanent File.  This file (or better yet, a waterproof/fireproof box) should contain confirmations of all the loans you’ve paid off (auto, school, home, and so on).  This is important in case you need to give proof to the credit bureaus about any misreported information.

Finally – now that you can see the actual surface of your desk at home – remember that there are certain documents that you should keep for a lifetime in your permanent file or box as well:  wills and any other legal filings such as a divorce or adoption, retirement account withdrawal receipts, bankruptcy paperwork, and inheritance confirmations.

Disasters Take More Than Your Assets

Posted on April 15th, 2013

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Throughout the years we’ve seen natural disasters rob from our friends, families and fellow citizens.  We see the physical harm these disasters cause. What we don’t see is the financial after effects that can be even more painful for storm victims.

Here’s a story from The New York Post about the struggles of a Staten Island homeowner after Superstorm Sandy:

“All I needed was a few months of hurricane forbearance to catch up from the $14,000 I’d already paid without reimbursement,” she said. “[But] they reported me in the middle of a federally declared disaster, when my house was in ruins and I was homeless.”  To read more of Allison’s story, click here. 

Stories like these surfaced in the news and even among friends when the housing bubble busted in 2008.  I would consider the housing bubble a disaster too; maybe not a natural one, but still a disaster.  I went through a situation where I had a house originally worth $290,000 that dropped to less than $240,000.00.  My payments were higher than they should have been, given the huge loss.  I contacted my bank proactively to try and work something out.  I wanted to keep my house but I wasn’t prepared or willing to take a $50,000.00 loss.  So I called and called and did everything I could to get my payments lowered so I could stay in the house.  Their response was “there is nothing we can do until you fall 90-120 days behind.”

Huh? So it was better for me to fall behind, take a hit on my credit and then wait for my bank to come close to foreclosure before helping me? This is the problem with living in a digital society.  There are no decisions based on people anymore.  Everything is based on what a computer says.

Needless to say, I looked at my hand and decided to fold.  I analyzed the big picture and realized that the house and all the bills that came with it, along with its huge loss in value, was just not worth it.  If banks would have taken a more proactive approach to help people, maybe the housing market could have rebounded quicker.  Maybe there wouldn’t have been as many foreclosed and vacant houses out there.

Situations like Allison’s and mine go to show you that at the end of the day, the banks rarely (if ever) take a personal situation into consideration.  It’s about that all-important monthly payment.  So before you purchase, get educated on the bank’s true role in your mortgage — and always be prepared for a disaster.