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How Divorce Impacts Your Credit

April 10, 2014 by  
Filed under Blogs, Misc

by: .

credit after divorce

Don’t Neglect Your Credit During A Divorce

Although divorce procedures do not directly impact your credit, the indirect impact can quickly devastate your credit scores in no time at all.

Things such as child support, joint accounts, and joint liability all of a sudden enter the fold. And with extra responsibility, comes a greater risk of default.

But, have no fear, there are steps you can take to protect your credit during a divorce.

Get Your Credit Report
It is absolutely crucial that you are aware of every account that is reporting to your credit report. Joint account holders and co-borrowers have 100% liability in just about every case. Get a copy of your credit report from all 3 credit bureaus, have a seat and go through every open account in your credit file. Make a list, and give it to your attorney.

Divorce Decree
A divorce decree does not relieve your liability in any joint accounts which you incurred with your spouse. You are 100% liable and 100% responsible for ALL joint accounts even if the court decrees otherwise.

That’s right, even if the court decrees that your spouse is 100% responsible for a certain debt, you are still liable to the creditor in case of default. A divorce decree does not nullify a signed debt obligation. Whether it’s a credit card, auto loan, or mortgage, if your name is on the original contract, you ARE 100% liable for the debt. This means that if your spouse fails to make a payment or defaults on the loan, it will be reflected in your credit report. Plus, the credit grantor has a legal right to take legal action against both you and your spouse.

So what do you do to protect yourself?

  • Close or separate all joint accounts. Talk to your ex-spouse, if possible. Go through all your debt and decide who should be responsible for each and every account. Call your creditors and ask them how to transfer your joint accounts to individual accounts. If your spouse decides to be less than cooperative, paying off the debt and closing the accounts may be your best bet.
  • You may have to refinance your home to get one name off the mortgage, or you might need to sell your home and divide the proceeds. Even if your name is removed from the title or deed, if your name is on the mortgage, you are responsible for the loan.
  • Continue to pay ALL bills on time.
  • DO NOT LISTEN TO YOUR RELATIVES who tell you to run up your spouses debt and stop paying the bills because it’s the other person’s problem. You have just as much liability in the accounts as your spouse, so you will be ruining both your credit scores, which you will need in order to start over.

Re-Establish Credit
If you were left with few to no open and active accounts after the divorce, you will need to begin to re-establish credit. A good way to start is by getting a credit card with a small credit limit. Pay your bills on time, keep you balance low, and your credit score will increase. If getting approved for a credit card becomes problematic, consider applying for a secured credit card in order to re-establish credit.

If Divorce left your Credit in Shambles
Consider hiring a credit repair service to help you move forward and get your life back together.

CreditFirm.net has helped thousands of our clients get their credit back on track and start fresh with an improved credit report and score. So why wait, get started today and be one step closer to better credit.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

How to Buy a Home With Bad Credit

April 8, 2014 by  
Filed under Blogs, Credit Repair

by: .

improve your credit scores to buy a home

Owning a home is one of the most rewarding experiences you can ever have. But, the home buying process can seem confusing and even intimidating, especially if you have bad credit.

So let’s take a look at the home buying process for someone with less than perfect credit and the steps they will need to take in order to buy the home of their dreams.

Fix Credit
Your credit repair professional will go over your credit report and help you maximize your credit scores. Through the removal of derogatory accounts and proper optimization, your credit scores increase and take you a step closer toward your goal. With your new and improved credit, you’re ready to move on to the next step.

Get Mortgage
Once your credit is in order, a mortgage professional will help you get pre-approved for a mortgage. They will take your income, assets, and credit score into account while determining the maximum loan amount that you can qualify for, as well as your interest rate and monthly payment.

Find a Home
Once you’re pre-approved for a mortgage, a realtor will help you find the home of your dreams, within your budget. This is the fun part, driving around looking for your own little piece of heaven.

The Closing
Once you find your home, your mortgage professional will finalize your mortgage paperwork, process your loan, and get you to the closing table where you get your keys.

Get Started
CreditFirm.net has helped countless families improve their credit and achieve the dream of buying a home. So stop dreaming about buying a home and start doing something about it. Get on the path toward buying a home by enrolling with CreditFirm.net today.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

How To Get Approved For A Credit Card

March 10, 2014 by  
Filed under Blogs

by: .

tricks to get approved for a credit card

How To Get Approved For A Credit Card

Applying for a credit card seems fairly straight forward. Fill out an application, cross your fingers, and hope for the best.

But there’s a better, smarter way, of getting approved for the credit card you want.

Credit card companies have a certain criteria they look for when determining whether to approve a consumer for a credit card.

So, without further adieu, here are the steps to take to make yourself more attractive to credit card companies and not only improve your chances of getting approved for a credit card, but get approved for a higher credit limit.

1. Pay your bills on time for at least 6 months straight.

According to the Fair Isaac Corporation, the last 6 months payment history impacts your credit score more than anything else . Make sure that your payment history reflects on-time payments within this range and shows that your finances are in order.

2. Limit your inquiries.

An inquiry appears on your credit report every time you apply for credit. Applying for too much credit at once makes you look desperate for credit and in possible financial trouble. Limiting yourself to one credit application every 6 months will improve your chances of getting approved for a credit card and improve your overall credit scores.

3. Pay down your credit cards.

If you already have credit cards, make sure that you pay them down to a utilization rate of 20% or less. This means that if your credit limit is $1,000, your balance should be $200 or less. The reason for this is simple. Maxing out your credit cards makes you look like your living off the cards and don’t have enough cash at the moment. Keeping a low utilization rate will make you look like your simply using the credit cards for convenience.

4. Be Realistic

If you know that your credit isn’t in tip-top form, don’t apply for the most difficult to get credit cards with miles and bonuses. Set your sights a bit lower and a no frills credit card like the Capital One classic card. CreditCards.com has a great took to hetp you determine which credit cards you may get approved for.

5. The Application

There are certain things that credit card companies look for on a credit card application. Lets go over a few common questions.

Are you married or single?
Although this question looks trivial, it is a great way of determining risk. Married people project more stability than single people.

Do you Own or Rent?
Consumers that rent are more likely to move to a new location over the next 12 months than a consumer who owns a home. And moving, as we all know, is a large expense. This is another question looking to gauge your stability.

Do you have a Checking account, Savings account, or Both?
Consumers who do not have checking accounts are either irresponsible or have something to hide, in the eyes of the credit card company. Having a savings account means that you are responsible enough to plan for the future and possibly carry a reserve of money in the bank for a rainy day. Having both a checking and savings account means that you are a responsible and stable individual.

What is your Total Household income?
Simple enough question, but many consumers actually get this question wrong. The credit card company isn’t asking you what your income is, they want to know what is the total income of everyone that lives in your household. Accidentally putting down your income, instead of your household income (which is undoubtedly higher), may decrease your chances of getting approved for a credit card. So make sure to answer this question correctly

Would you be interested in blank checks to use for cash advances?
Most cash advances on credit cards are charged the highest interest rates possible. Consumers that withdraw cash from their credit cards are either in financial trouble or fiscally irresponsible, credit card companies tend to stay away from such individuals. A credit card company wants to lend money to responsible consumers that will pay the money back.

As you see, there is much more to getting a credit card than luck. Credit card companies look for a specific individual to lend money to. By following the advise outlined in this article, you will begin to look more attractive to a credit card company and increase your chances of getting approved for a credit card.

If you’ve followed all these steps and still can’t get a credit card, you may need some professional intervention from a company like CreditFirm.net to help you improve your credit and get approved for a credit card.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

What is a Good Credit Score?

February 18, 2014 by  
Filed under Blogs, Credit Score

by: .

score gauge

It seems that one the most frequently asked questions consumers have is “what is a good credit score?”

And it is a GREAT question.

As you start out toward the path of improving your credit score, it is important to clearly define your goals and set an exact target for your credit scores. This is why it is paramount to specify exactly what good credit is.

Although it can be a bit tricky defining the exact range for a good credit score. According to the Fair Isaac Company, the developers of the FICO scoring model, here are the general ranges for credit scores.

Credit Scoring Range.

  • Excellent Credit: 750+
  • Good Credit: 700-749
  • Fair Credit: 650-699
  • Poor Credit: 600-649
  • Bad Credit: below 599

What’s Your Credit Score?

Now that you can define what a good credit score is, it’s a good idea to find out where you stand. Credit monitoring companies charge anywhere from $10 to $30 per month to give you access to your credit scores. But, you can actually get your credit scores from all 3 credit reporting agencies for free (no credit card required).

Click Here to find out where you can get your FREE credit Scores (no credit card required).

Once you take a look at your credit scores, you’ll have an idea of how lenders view you and your creditworthiness.

But, how did the credit bureaus come up with these scores?

How Are Credit Scores Calculated?

Credit scores are calculated by applying a mathematical formula to the information contained in your credit report. So if you’re wondering why your scores may be a bit low, the answer will be in your credit report.

Click here to find out where you can get your FREE credit reports (no credit card required).

The FICO scoring model uses several key factors to determine your credit scores. And although the actual formula has not been publicly disclosed, we know the general guidelines used to calculate the FICO credit score.

  • Payment History
  • Amounts Owed
  • Length of Credit History
  • Credit Variation
  • New Credit/ Inquiries

Basically, the information in your credit report is run through an algorithm which scores your creditworthiness on the aforementioned factors, and spits out a number which helps lenders gauge the risk of lending you money. The higher the credit score, the lower the risk, the better the terms of the loan.

The Benefits Good Credit

Good credit will help you give you access to hundreds of thousands if not millions of dollars in credit at the best possible rates and terms. Whether it’s buying a house, financing a car, getting a business loan, or even a credit card for your day to day expenses; good credit will open the doors to a better life.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

1099-C | Debt Forgiven – But Not Forgotten

February 4, 2014 by  
Filed under Blogs, Taxes

by: .

IRS Cancellation of Debt form 1099-C

Debt Settlement – An Unsettling Surprise

For those of you who think that settling your debt is the end of the line, think again, the IRS wants a cut.

Typically, a few months after a consumer settles their debt with a creditor or debt collector, they receive a Cancellation of Debt notice from the IRS, also known as form 1099-C. Here is a sample copy.

You see, the IRS considers forgiven debt as a form of income, and this income MUST be reported in your tax return.

Here’s an example of how this works:
You call up a debt collector to settle a $5,000 collection account. Through your shrewd negotiating skills, you’re able to settle the account for $1,000. Great Job!! You pay the $1,000, balance is reported as $0, account is closed and the collection agency then files a form 1099-C to the IRS, reporting the $4,000 you didn’t pay as your income. And this could lead to quite a large tax burden.

The issue is that a most people don’t realize that they have to pay taxes on their forgiven debt. The law does not require debt collectors to divulge this information to consumers and why would they. It’s not exactly an attractive proposition and it’s not their job to help you do your taxes.

The Good News

The good news is that you may be able to reduce or even eliminate this tax burden by filing a simple form – IRS Form 982 also knows as the Reduction of Tax Attributes Due to Discharge of Indebtedness.

Well, that’s a mouthful. But do yourself a favor, if you receive a 1099-C Cancelation of Debt form, take it to a knowledgeable accountant. There are several exclusions which could offset the “debt income”. One example of an exclusion is if your Liabilities are greater than your Assets, meaning that your net worth is negative, you may not be liable for the cancellation of debt income.

There’s one more thing that I need to mention, technically, mortgage lenders file form 1099-C form consumers that have had short sales and foreclosures. Obviously, the amounts that they could possibly report as debt income could be astronomical.

There is an exclusion for these cases as well, it is called the Mortgage Forgiveness Debt Relief Act, and it covers up to $2 million in forgiven mortgage debt, as long as it is filed by April 2014. This will be the last year that the act is valid, so it is important that you get all of your ducks in a row before you file your taxes.

The Bottom Line
Be aware of the fact that you have a tax liability on any forgiven debt. And be sure to contact an expert accountant who can help you navigate the tax laws to save you money.

Also be aware that CreditFirm.net is always here to help you improve your credit with an expert team of credit consultants and attorneys at your service.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

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