Interest rates are on the rise, but that hasn’t curbed Americans’ appetite for consumer debt. If anything, consumers are borrowing more on credit cards or through auto loans than they have in years, and lenders seeking growth are happy to oblige them.
Recently, a male millennial said he signed up for more than five credit cards over the past year, from issuers including Capital One Financial Corp. and Discover Financial Services, after he received offers in the mail. He also took out a $36,000 loan to buy a new Jeep Grand Cherokee. This individual, who rents, said the offers have been arriving as his credit score has improved. He ...
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VantageScore – Credit Scoring Game Changer?
Various sources have reported that lenders are increasingly using VantageScore to determine credit worthiness. You need to know what it is and why it could be a game changer.
VantageScore is a credit scoring model that first emerged in 2006 as a joint venture of the big three credit bureaus — Experian, Equifax and TransUnion — and now has the distinction of being one of only two scoring models lenders rely on to make lending decisions (the other being FICO). VantageScore currently claims about 10% of this hard-to-crack market for credit scores used in the lending industry, with the greatest adoption seen among the largest banks and ...
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Are Guarantees of Student Loans Changing The Retirement Landscape?
If you think student loan debt is a problem for the younger generation, think again. According to the Consumer Financial Protection Bureau (CFPB), about 2.8 million people age 60 and older have outstanding student loans – four times the number in 2005. Most of the current student-loan debts of people 60-plus were incurred paying for college for a child or grandchild, and in the past decade, for the 60 to 64 age group, student-loan debt has increased eight-fold – to $38 billion!
“Americans in their 60s are now the fastest-growing age group facing student loan debt,” says Andrew Anable, a financial planner at Safeguard Investment Advisory ...
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Don’t Ignore Your Credit Report
It pays to be familiar with your credit report. The information it contains determines your credit score, your ability to access credit and loans, and even your chances of landing a job or signing a lease. It's a good idea to check your credit report on at least an annual basis. In certain scenarios, however, you should closely monitor your credit report no matter when you last checked it. Here are six times you need to check your credit report.
Debt Collectors are Calling
If you're getting calls from debt collectors regarding unpaid bills, you may need to do some damage control. Whether the debt in question is valid or not, it could ...
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Have You Been Rejected for a Mortgage? Get a Grip and Fight Back
How many Americans are rejected for a mortgage loan on an annual basis?
Data are scarce on the topic, but a Federal Reserve study shows that one in eight Americans were turned down for a mortgage in 2015 -- and overextended credit was at the top of the list of reasons lenders used to reject mortgage applicants. The Federal Reserve study pointed out that a high debt-to-income ratio -- i.e., the amount of money you borrow against the amount of money you make -- was a top credit-based reason for mortgage rejections.
If you've been turned down on a mortgage loan due to bad credit, get a grip and fight back.
Sure, the bad news is that ...
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Trading Social Security Benefits for Student Loan Forgiveness? – An “E” For Effort
There's a debt crisis in America right now, and it centers on the cost of education. Roughly 45 million people owe a total of more than $1.4 trillion in student loan debt, working out to an average of about $30,000 per borrower. Starting from such a huge hole, it's hard for today's millennials to chart a reasonable course forward for their finances, and the impact throughout the U.S. economy has been apparent for years.
One lawmaker is seeking to address that crisis, introducing a revolutionary new program that would allow young people to trade Social Security benefits for student loan forgiveness. Unfortunately, the program comes at a ...
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Income Based Repayment of Student Loans Still Better Than Doing Nothing At All
There's a dangerous trend I've seen repeatedly with individuals in income-based repayment (IBR) plans for their student loans, and it's clear to me there's a critical piece of information missing from our general understanding of how these programs work.
Income-based repayment (IBR) plans are offered on federal subsidized and un-subsidized student loans in an attempt to make high student loan debt more manageable to pay off. They extend the repayment term from the standard 10 years to either 20 or 25 years, and cap monthly payments at 10% or 15% of discretionary income depending on the program. However, two other features of these plans ...
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Two Personal Finance Issues That Are Not Going Away in 2018
It's a new year and, unfortunately, many of us continue to grapple with financial issues that do not want to go away. Here are two to think about:
Not savings enough for retirement.
I have encountered countless clients who, although having worked for years, have accumulated little or no retirement savings. They have allowed debt to control their lives and have sacrificed savings opportunities in the process. This perspective must change.
Bankruptcy can be a first step toward achieving financial security. Did you know that retirement savings are fully protected from your creditors - even in bankruptcy? Whether you have one ...
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A Brief History of Bankruptcy
Bankruptcy pertains to individuals and business whose financial expenses outweigh their income or revenue, respectively. The two most popular are chapter 7 and chapter 11. Businesses find chapter 11 to be significantly appealing as it allows the debtor the ability to restructure their business and carry on without having to dissolve the corporation. Here we will examine bankruptcies origins throughout the ages.
The earliest accounts of debtor forgiveness was noted during biblical times. Notably called the Jubilee Year (of the Old Testament). It was also called the year of remission or universal pardon and was applied every 50 years, ...
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How Parents Can Help Their Children Apply for Credit
John was a college student who was working to establish credit so that he can build a good financial future. One month there was an oversight and he missed his car lease payment by a few days. He panicked, thinking that his credit was ‘ruined’. Fortunately, his parents set him straight about how the credit ranking system works. But what was exactly wrong with their son’s understanding that set off his panic state? Students should be taught ahead of time the truths and myths of obtaining credit, specifically, John should have been told the following:
Unless he is 30 days (or more) behind on a payment, his credit will not be affected. ...
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