You can find lists of things that you wouldn’t normally think would hurt your credit score. Unpaid library fines, small bills you never received and annual fees for canceled credit cards are on that list. However, these things only have a minor impact on your credit score. Let’s look at some of the worst things that could happen to your credit.

 

Bankruptcy
A bankruptcy has the greatest impact on your credit score of anything you could do. A liquidation bankruptcy is worse than a debt repayment plan supervised by the courts, but both make you an untouchable to creditors for years afterward. You may be eligible for a installment loan for bad credit if it is based on your income, if you have regained full control of your income. Avoid installment loans if you’re still on a debt payment plan or at risk of having your wages garnished.

 

A Foreclosure
A foreclosure leaves an incredibly bad mark on your credit report. It may not be your fault, such as when you get divorced and no one is willing to pay the house payment. A short sale is not quite as bad, though it still hurts your credit. A deed in lieu of foreclosure, sometimes jokingly called jingle mail, is about as bad. That’s when you willingly surrender the house to the bank instead of making them go through foreclosure. They don’t have to spend as much on legal fees evicting you from the house and taking possession.
Repossession
Foreclosure refers specifically to losing one’s home. Losing any other type of property is referred to as repossession. Repossession popularly refers to when the lender sends a tow truck to haul off your car or other vehicle. It can occur with other types of property, as well. They could arrive to repossess the big screen TV or furniture you have on payments. Industrial equipment could be repossessed, as well. Anything you’re leasing could be repossessed, as well. Rent handbags and clothing, and the creditor could theoretically enter your home to take it back. Rent furniture for an event, and they can come get it when you’re done with it or after you’ve stopped paying for it. On the flip side, failing to pay your storage unit fees, and they can sell the items at auction to pay the money you owe. That hardly affects your credit, but it can cause serious problems if they sell valuables like a car you left in storage.

 

What should you do if you’re unable to make the payments on your car, RV or other toys? Giving it back to the lender and taking out a loan for the difference between what you owe and the value of the item is less of a hit on your credit. It is similar to the difference between a foreclosure and a short sale of your home.
A Bad Debt Consolidation Plan

 

Debt consolidation plans are not all the same. It is one thing to talk to a counselor who helps you get on a tight budget, prioritize expenses and start paying down debt. They may help you negotiate down your debts with creditors, getting late fees and interest forgiven in return for full payment of the remaining balance. However, services like this often promise to help you though they’re ruining your credit. For example, some debt “counselors” suggest stopping all debt payments for a few months. This kills your credit score. Their advice is to save this money into a fund you can use to settle the debts. Then they offer your creditors less than what is owed. Since you haven’t been making payments, they’re more likely to accept half or less what they’re owed. The problem is that this is almost as bad as bankruptcy in what it does to your credit report. Consumers are often swindled by these services, too. For example, they may ask for a power of attorney document that lets them negotiate debt settlements on your behalf, and they take thousands of dollars in fees for this “service”. Yet you could have done the very same thing yourself, and you’d have had more money to direct toward your debts. In a worst-case scenario, they take the fees and do nothing except close shop and disappear. Now you’re out the thousands of dollars, your creditors are calling, and your credit is trashed.

 

Every charge-off by a creditor hurts your credit. Every time they decide your debt is no collectable hurts you. And they’ll remain on your credit report for seven years after the date they were reported delinquent. Since many companies wait for six months of non-payment to count it as delinquent, it could sit on the credit report seven and a half years after your last payment.

 

Debts Going into Collections

 

Any debt that goes to collections will hurt your credit report. Little debts you didn’t realize you owed that go to collections hurt your credit score. Larger debts going into collections are even worse.

 

This does create interesting problems. For example, making payments on debt that you no longer legally owe could restart the clock. If it was discharged in bankruptcy or settled, making payments could restart the clock and allow them to list it as valid, active and past-due debt. This is why you should demand proof from a debt collector that the debt is valid and not expired before you just pay the debt.

 

The worst debt collectors try to collect debts owed by someone else. It may be someone who has the same name or is simply related to you. You are not obligated to pay these debts unless you are a co-signer or were married to the person at the time the debt was incurred. They cannot put the debt on your credit report, though they may threaten this and other legal action.

 

What if you owe the debt and can’t pay it? Ignore it, and it may result in a lawsuit. This sounds scary, but it shouldn’t be. You might be told your paycheck or bank account is being garnished for the debt. Or you can talk to an attorney who will understand that you can’t pay it. You can also hire an attorney to deal with the issue. At some point, it will move to a charged-off status.

Traditional vs Roth IRA

Justin W —  February 18, 2020

It’s never too late to start saving for retirement. Discover the differences between a traditional and Roth IRA, then choose the one that’s the most beneficial.

If there’s one thing every person should know about, it’s the importance of starting a retirement account. Although there are many possibilities, there isn’t a “one-size-fits-all” solution. That means you need to select what’s going to be the most beneficial to you and your unique situation.

For instance, if you work for a company that doesn’t offer any type of retirement savings, you might consider an Individual Retirement Account, otherwise known as an IRA. If you opt to take that route, you’ll need to decide between a traditional IRA and Roth IRA. As with any savings, it’s essential to factor in all the variances to ensure you make the right decision.

Understanding the Basics of IRAs

When it comes to investing in either a traditional or Roth IRA, the process works much the same. You open an account, put money in it, and then continue adding more if wanted. While exchange-traded funds and mutual funds are the most popular choices, you also have the option of investing in securities, including stocks and bonds.

Regardless, the goal is to make decisions that’ll help your money grow, thanks to compound interest.

Tax Considerations

The primary difference between a traditional and Roth IRA is taxes. If you go with a traditional IRA, the money you invest is tax-deductible. Therefore, every dollar contributed helps lower the amount of taxable income. Of course, the reduction must line up with what the Internal Revenue Service (IRS) allows. In 2020, the IRS limit is $6,000.

With a traditional IRA, your money grows but without any taxes applied. It’s only after you begin taking distributions that the government would tax the money. At that point, the amount of tax paid would be the same as if the money were standard income. In some states, money in a traditional IRA is tax-exempt, meaning you wouldn’t pay any state taxes.

At the age of 70.5, you’d need to take Required Minimum Distributions, or RMDs. As such, your ability to contribute to the account would end. Simply put, with a Traditional IRA, you don’t have the option of growing your money indefinitely.

Now let’s look at how taxes work with a Roth IRA. For this, you fund the account using after-tax money. For that reason, you can’t deduct any of the contributions made. Since you pay taxes on the money when putting it into the account, you’re not taxed when taking it out. Not only does that apply after you retire but before retirement as well.

Another difference, with a Roth IRA, there are no RMDs. Therefore, you can take money out as and when needed as opposed to waiting until you’re 70.5 years of age. Something else worth noting is that with a Roth IRA, as long as you’re working, you can contribute funds. With so many people still employed into their 70s and even 80s, that’s a nice benefit.

Choosing the Right IRA

As someone who takes retirement seriously, it’s essential to make the right choice between a traditional and Roth IRA. First, understand fully how the taxes work for each. If you’re currently in a somewhat higher tax bracket but believe you’ll drop to a lower one after retiring, it makes perfect sense to open a traditional IRA. However, if the opposite is true, then you should go with a Roth IRA.

There are free calculators that can help you figure out if a Roth IRA makes sense for you, but most of them are pretty inaccurate. You can also use a more sophisticated (not free) planning tool called WealthTrace, which allows you to run more complex what-if scenarios including Roth IRA conversions.

You also want to factor in a 401(k). If you have one through your employer, you’re already enjoying several benefits offered by a traditional IRA. For instance, the contributions you make reduce the amount of your taxable income. As your money grows, it’s tax-deferred.

The contribution limits set by the IRS are higher for a 401K than they are for both a traditional and Roth IRA. Therefore, if you’re putting money into a 401K, opening a Roth account as well can prove beneficial. That way, you can diversify your retirement holdings. Simply put, when you retire, one source of income isn’t taxed.

Additional Factors

Without RMDs, a Roth IRA is beneficial to a lot of people. If you have other sources of income to support you in your retirement years, you won’t have to dip into your savings. There’s one other appeal about a Roth IRA. Unlike a traditional IRA, you can leave the money in a Roth account in your will for distribution to heirs.

If you have taxable accounts with gains or income, you can use that money to fund a Roth IRA. As far as the income limit, it’s $137,000 for singles and $203,000 for married couples who file taxes together. Also, for this type of IRA, there’s a conversion known as a “backdoor.” For that, you would put money into a non-deductible traditional IRA, followed by rolling it over to a Roth.

If you choose the “backdoor” conversion, any money you roll over is taxable. While this is currently an option, it may not always be available. Some tax reformists believe it’s a legal loophole that the government should close. Doing so would prevent extremely wealthy Americans from gaining access to it.

Summary

It’s sad, but roughly 50 percent of Americans don’t have any type of retirement savings account. If you’re in a position to choose between a traditional and Roth IRA, count yourself fortunate. Before making a selection, be sure to carefully review any implications of estate planning and taxes.

You want to pay attention to the fees charged for both types of IRAs. The goal is to choose an account with low fees so they don’t eat away at the value of your holdings. Regardless of your age, it’s never too late to act. Therefore, talk to a professional financial planner as soon as you can. An expert can answer more questions and guide you to the IRA that’ll serve you best.

Even when you try to be responsible with your money, you never know when an unexpected setback might put you in a tough financial situation. When you take advantage of Montreal loans, you can keep a relatively minor financial problem from escalating into a serious disruption of your life. A short-term loan doesn’t require that you have a great credit score to get the money you need — if you have a valid checking account and a full-time job, you should be able to quickly get the money. The following are just a few of the situations when such loans can help.

1.        Vehicle Repairs

You depend on your car to get to work and run errands, so a major vehicle repair can prove a significant setback. You don’t want your car to wait in the shop for several weeks while you scrounge up money to pay for the repairs. Though some car insurance policies offer loaner vehicles, they typically don’t fully cover these costs, either.

2.        Unplanned Travel

Most vacations are planned out several weeks — or even months — in advance, allowing you to adjust your budget appropriately. But sometimes, you’ll need to take a last minute trip for events you can’t control, like a wedding or funeral.

 

Though the costs will vary based on how far you need to go to reach your destination, expenses like plane tickets, hotel stays, rental cars, and meals can add up quickly, even for a short trip.

3.        Major Home Repairs

On average, homeowners should expect to pay about one percent of their home’s market value on repairs each year. While saving a small amount each month can help you plan for standard repair issues, major problems like needing to replace your furnace could easily exceed what you’ve saved. Putting off roof repairs or plumbing leaks could compound the damage, which means major home repairs should always be addressed as quickly as possible.

4.        Pet Emergencies

Though Canada’s single payer healthcare system helps keep medical expenses from becoming a financial emergency, you’re still responsible for your pets’ medical costs. Treating a pet after it gets hit by a car or suffers some other medical emergency can cost several hundred or even thousands of dollars. When your furry friend’s life is on the line, treatment often can’t wait.

Parting Thoughts

It’s always best to have money saved away for a rainy day. But sometimes, there simply isn’t enough in your bank account to address an unexpected financial emergency. Through the responsible use of loans, you can get the money you need to keep a temporary setback from becoming a total disaster.

The new year means that it’s time to reflect on your business so you can assess what is going right and what aspects need a little work. Maybe you’re looking to set new goals for your company like a percentage of growth, an increase in net worth, or the number of clients you take on. Whatever the goal, you should sit down, make a plan, and execute it. Here are our tips to make sure that you and your small business start the new year off strong.

  1. Pick great employees

Finding amazing employees isn’t always an easy task. First, you have to put up job postings on sites like Angie’s List or hope internal referrals bring in top-notch talent. Then, you have to sort through dozens, maybe hundreds, of resumes. Finally, you’ll have a batch of promising candidates who you’ll interview in person.

When those potential employees come in for an interview, this is the time to try to get a feel for their character and if they’d be a good fit at your company—both professionally and culturally.

Another important aspect of this process is properly screening your applicants. An employment background check helps to weed out people who are liabilities because of credit issues or a criminal history. This is an important step that can save you the hassle of having to fire and then re-hire.

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  1. Bundle your services or products

If you’re looking to increase your profits, bundling your projects can be more attractive to prospective clients. Customers may view bundles as savings, and even if the actual amount of money they save with a bundle isn’t very much, perception is everything. If you can afford to be flexible with what each bundle offers—for example, if you can swap out products or services—you may find more customers interested in buying what you’re selling.

  1. Ask for referrals

Do you have a lot of happy customers? It’s time to tap into that valuable resource! Don’t be shy about asking your current and past clients for future customer referrals. In addition, you should also be regularly asking for reviews. Good reviews can be used as testimonials on your website or on marketing materials like brochures. Just make sure that you ask their permission first before using any quotes.

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  1. Up your social media game

If you don’t have social media for your company, make it your goal to get things going in the new year—it might just help you boost your sales. You don’t have to sweat about getting just the right hashtags or posting a photo with a particular aesthetic, you just have to get your name and brand out there.

Focus your social media strategy on four three concepts:

  • Consistency: try to post one post per week at a minimum. Make sure you use both hashtags and a geotag.
  • Follow similar businesses: one great way to build followers is to find people who are in the same industry. Who knows? Maybe it’ll lead to a collaboration of some sort.
  • Tell a story: nobody is going to want to follow you unless you share stories important to you and your company. Focus on a narrative when you’re posting. Maybe introduce key employees via social media posts.
  • Engage: ask questions, engage with customers, and encourage comments. Don’t forget to follow other accounts and comment on others’ posts as well.

If you don’t have a full-time social media strategist and don’t have the budget to hire one, consider hiring an intern to help out.

  1. Have a promotion or sale

Having a sale might seem counterintuitive when you’re trying to raise your profits—after all, how are you going to make money by lowering the price of your products? You may be surprised to learn that sales can lead people to buy more than they would otherwise. Even if you’re offering a small discount, your product or service might seem more attractive to clients who are hesitant to bite the bullet.

Final thoughts

The new year brings forth a renewed sense of purpose when it comes to your small business. Use this time to invigorate your business with fresh ideas, innovative customer solutions, and maybe even some new employees. With these tips and tricks, you’ll be well on your way to a successful and profitable 2019.

You’ve worked hard your whole life to get to the point of retirement. It’s your golden years. The time where you get to relax, spend time with family and do the things you’ve always wanted to do. Don’t let any stress get in the way of your retirement years ahead.

Before you walked out the door of your job for the last time, you’ll want to ensure you’ve thought about everything that could cause stress in your retirement. Will you be financially stable enough to do what you want in retirement? Do you have enough insurance and health coverage? Are there any outstanding loans you should pay off?

It’s easy to lose track of all of the things that could pop up at any point. While you prepare yourself for retirement, though, make sure to consider some of the following points as well.

Insurance and Coverage

Chances are your current career has coverage of some sort. Can you guarantee that you will have the same insurance once you retire? On top of that, there are other things to consider like long-term care, Medicare, and even simply managing your investments. Look into senior benefit plans where they cover a wide range of topics that you’ll eventually want to talk about.

Create a Balance Sheet

You wouldn’t want to run out of money halfway through your retirement. So, prepare yourself and have a good understanding of your financial situation by creating a balance sheet.

A balance sheet shows all of your assets and liabilities to give you a value of your net worth. Your total net worth will be the difference between your assets and liabilities. That number is what you’ll rely on during your retirement years.

Develop a Budget

Although it’s not always fun, it is a good idea to create a budget before retiring. You want your money to go a long way, and a budget will help with that. Remember that you won’t be working anymore, which means you won’t have quite the same amount of income every month. Although you may have a decrease in some expenses, there could be more unexpected expenses occurring, like traveling and for your health. Create a budget that matches your retirement lifestyle you hope to live.

Update or Plan a Will

If you have one already, retirement is a good time to update your will. However, if you’ve never made one, now is the time to develop a will. Ensure that all of your wishes are honored after you pass away. Consider going to a lawyer so that your will is legal and properly witnessed.

Tax Breaks

When it comes to retirement, one of the things you don’t want to do is overlook any possible tax breaks. Upon retirement, you may be eligible for different tax breaks that you weren’t available to you before. Speak with an accountant or talk with your investor to see what type of tax breaks you could receive.

Planning for retirement will help you live your life comfortably and stress-free. The more you can do before you retire, the better off you will be. Consider some of these points before your last day of work, and ensure that you are secured and ready for the years ahead.

There are a variety of loans that are available to suit the needs of someone who may be trying to consolidate their debts, take their dream vacation, pay for school, to name just a few of the common life-scenarios that prompt people to try to be approved for a loan. In order to be prepared before you begin the process, you should be aware of the minimum borrower requirements for any loan:

Minimum Age

With few exceptions, the minimum age that is required for a person to be approved for a loan is 18 years old. There are only four states who have an exception to this rule which are Alabama, Mississippi, Nebraska, and Puerto Rico where the potential borrower needs to be older and be minimally between the ages of 19-21 years old, depending on which of these states you live in. Anyone who is younger than 18 years old would need a cosigner before they can be considered.

Residency Status

Any bank or lending establishment will verify your residency status in the United States or any country in which you are seeking a loan. You must be able to provide proof that you have resided continuously in the country for at least six months before applying for a loan. This is the case for virtually any loan available to consumers, from fast cash personal loans online to 15-year mortgages. Lenders like to see signs of stability and predictability in their borrowers’ lives and residency status provides a strong indicator.

Employment History

The longer you have been at your employer, the more likely that a lender will consider you a good risk for loan repayment and strengthen your chances of being approved for a loan. Typically, a lender looks most favorably on someone who can minimally prove two years of employment at the same job. If you work for yourself, you will need to show proof of this through business account bank statements that go back at least 2-3 years. Individuals who have long-term employment and are paid solely on a commission that varies from month-to-month also need to prove that they have a consistent amount of money coming in each month to cover a premium loan monthly payment to the lender.

Debt-to-Income Ratio

With few exceptions, lenders look at how much money you make each month and compare it to your monthly debt amount. This is called the debt-to-income ratio and it usually cannot exceed 35% of your gross monthly income. The average lender will consider a loan if an individual has at least $800-$1,000 of additional monthly income beyond your debt in order to comfortably pay a loan premium each month.

Other Types of Loan Requirements

Mortgage Down Payment

Even though this may not be a steadfast requirement for all mortgage lenders, it is to your advantage to be able to offer between a 5 percent to 20 percent down payment on the chosen property before the loan process begins. This improves the lender score you are given for loan approval since it lessens the ratio of debt that you will incur when you become the owner of the property.

Personal Loan Collateral

This is not always a requirement for personal loans since people do not have the same items on hand for collateral value to offer, but there are personal loan lenders who require some kind of collateral before you are approved for a personal loan because a credit score may not be the most favorable for their minimum requirements. Types of collateral could include a vehicle, property, or cash.

How to be a Stress-Free Landlord

Corey —  April 15, 2018

If you own a rental property, you’re probably aware by now that being a landlord isn’t always as glamorous as it’s made out to be. This is especially true if you own multiple units, with multiple tenants, who have all sorts of needs. Whether it’s a flood at two in the morning, or a broken HVAC air conditioning unit during the dead of summer, maintenance issues can be difficult to attend to. Multiply that with tenant turnover, filling vacancies, scheduling showings, and soon you can find yourself severely overwhelmed.

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