Protecting Your Credit Report is Important

There are two main reasons why people should check their credit report on an annual basis. The first is to ensure that everything is accurate. This can also help you detect fraud and ensure that your identity is still secure. The second reason people check their credit reports is to find out what their score is, especially if they’re about to apply for something or make a major transaction.

Regardless of why you check your credit report, you are able to verify the accuracy, detect fraud, and research what you can do to improve your credit score. All of these elements are crucial and can affect your day-to-day lifestyle.

For instance, if you’re struggling with mortgage debt like millions of other Americans, you might seek mortgage debt solution through a loan modification or mortgage modification. If your credit report is inaccurate, you could be faced with higher interest rates and lose money that you don’t deserve to be losing. Whether it’s your mortgage debt, a car loan, or any other type of credit, ensuring that your credit report is accurate is crucial to your financial health and security.

Remember, you are entitled to a free credit report each year by all of the three major credit bureaus. By taking advantage of this free offering, you’ll be able to monitor your credit report and ensure that your financial profile is exactly where you want it to be.

Bank of America Not Helping Homeowner Debt

While Wells Fargo and Bank of America have so far not made a public comment, Attorney Schneiderman says he will sue for compliance if the committee doesn’t take action for the banks’ policies. The settlement within the continental United States includes other lenders such as JPMorgan, Citigroup, and Ally Financial. This new policy brought $25 billion of relief to homeowners across the country.

By replying in 30 days to mortgage modification requests, banks will be helping homeowners avoid foreclosure and stay current on their monthly payments. By either purposefully not complying or being inefficient in response time, both Bank of America and Wells Fargo are hurting American homeowners, says the Attorney General.

Since last year’s mortgage settlement, over 20,000 homeowners in New York alone have been helped by these new terms. Since October, both Bank of America and Wells Fargo have amassed 339 documented violations of these new refinancing terms. Whether or not the national monitoring committee decides to take action, Attorney General Eric Schneiderman says that he will ensure that these banks are held responsible for their actions.

5 Important Tips for Avoiding Debt

Avoiding debt with a credit card isn’t difficult as long as you employ strategies that are focused on your budget. By making purchases with your credit card that you can afford to pay with care, you’ll be able to handle your budget and avoid harmful debt.

1. Avoid cash advances. Many people take out cash advances so that they can pay everything in cash and better manage how much they spend. However, cash advances are actually more expensive because they have higher interest rates and transaction fees that accompany them.
2. Limit the number of credit cards. While opening a credit card is not harmful, having too many can make it difficult to keep track of payments and how much you’re spending. By limiting the number of credit cards you have, you can rest assured that you have enough credit for emergencies but don’t have to worry about keeping track of your spending.
3. Consider leaving the credit card at home. This will prevent the temptation of window shopping and spending money frivolously when you could have kept the card at home.
4. Keep a record of purchases. This will allow you to check for fraud when bills come in the mail. Furthermore, a record of purchases allows you to track your spending habits and make changes as needed.
5. Save, save, save! One of the most important elements of avoiding debt is having an emergency savings account. This should be different from retirement savings and similar accounts.

Mortgage Debt Solutions in 2013

Mortgage debt solutions in 2013 provide a vast variety of options for homeowners. Working with a bankruptcy or foreclosure attorney can help homeowners decide which of the following solutions is best for them.

1. Mortgage modification. This is a mutual agreement where one or more terms concerning the repayment of the loan are modified. To qualify, borrowers must be able to verify their financial ability to repay as well as make the case as to why the terms must be changed.
2. Refinancing. A homeowner with good credit and a good history of payment can refinance the property and take advantage of lower interest rate possibilities.
3. Reinstatement. This solution is only available for homeowners who were late on payments because of a temporary situation. If you were late on a payment, you can reinstate the loan with the previous amount due with any late fees by a date that you and your lender agree upon.
4. Repayment plan. If you’ve missed mortgage payments, negotiating with your lender can help you make up missed payments over time.
5. Forbearance. One of the biggest considerations of forbearance is that it’s a temporary agreement until permanent terms can be agreed upon. However, this allows homeowners a period of time to reestablish their finances.

How to Refinance Your Mortgage Debt Effectively

Knowing common refinancing mistakes also gives you the wisdom to make positive financial decisions. While record low rates make it a good time for refinancing mortgage debt, it creates a double-edged sword. Avoid these mistakes to pay back your mortgage debt without unneeded hardship.

Failing to shop lenders. The most common mistakes that homeowners make isn’t fully examining their options. By shopping a wide variety of lenders, you can find someone who has the best interest rates and terms for your situation. When refinancing, you want to shop around for the best choice – this in itself can save you thousands of dollars. However, be sure to also consider the cost of fees, as these can be costly and add up.
Over valuing your home. It’s important to remember that your home isn’t the same price it was when you bought it. Nationally, home prices are approximately 30 percent lower. Expect a higher refinancing offer if you don’t have enough equity.
Poor renovation timing. Whether you want to renovate for personal reasons or to boost the value of your home, do it before or after the appraiser comes. Since renovations mean your house will be a temporary mess, this can lower the appraisal value than it should have been if the appraiser comes during the renovation. However, waiting until the renovations are done are a great way to enhance value.

Mortgage and Estate Plan Considerations

Fortunately, no matter how large or minuscule your remaining balance might be, your outstanding mortgage debt won’t be passed to your family members if you die. However, the only exception is if you’re married and the house is owned jointly. If this is the case, it’s likely that your spouse is the co-signer, who would then be responsible for the rest of the payment. A life insurance policy that pays immediately upon your death can protect your spouse from having to pay off the remainder of the mortgage single-handedly. An unprotected spouse will be left with the mortgage debt and may have to sell the home to satisfy the debt.

However, if you’re married and you own the home alone, it’s important to have an estate plan. Without the estate plan, your spouse and family members could lose the home after you pass. For older homeowners, there are a few considerations to take to protect their spouses and loved ones.

Establish a trust. A land trust or revocable trust establishes a process of who will receive the property should you pass.
Sell or give the home to your children. By doing this, older citizens can ensure that their family has the home after their death.
Include the home in your deed. While signing over the deed doesn’t change mortgage considerations, it means that your kids can avoid probate. However, this is dangerous because now the property is subject to your kids’ liability. In other words, if you sign over the deed to your home and your child gets sued, your property could be at stake.
Write a will. Including the property in the will won’t prevent it from going through probate, but it’s better than no written documentation at all.

Pinnacle Foods Reorganizes Outstanding Debt

The refinancing by Pinnacle Foods involves a $1,630 million term loan, $150 million revolving credit, and $350 aggregate principal amount. Pinnacle Foods intends to use the money garnered from the new term loan and any unsecured senior notes to repay their outstanding debt.

To complete the refinancing process, Pinnacle Foods had to pay fees to have their debt reorganized. The fees cost approximately $52 million. This included $34 million in fees early in the process associated with the redemption of interest notes. Despite the high amount of fees, Pinnacle Foods expects that the refinancing will save money in the long term and that its annualized interest expense will drastically be reduced, especially when compared to 2012.

Pinnacle Foods based their strategy on the successful initial public offering as well as the initial moves they made for refinancing last year. By completing the process, Pinnacle Foods has a clearer idea of their debt repayment process moving forward as well as the support they have with banking partners and holders in the company. The flexibility provided by the refinancing is expected to give Pinnacle Foods a cash flow boost moving forward.

Protect Your Credit While Donating

The IRS notes that these scam artists are using a variety of tactics to get financial information. This could cause immeasurable damage to your credit report as these scammers are participating in fraud and identity theft. To protect yourself from charity scams, it’s important to keep these practices in mind:

· Only donate to authorized charities. Whether you’re donating to Boston or Texas, only donate to charities you know that you can trust. Aside from big names like the Red Cross, use the Exempt Organizations Select Tool on the IRS website to find charities that are legitimate.
· Look out for similar names. One of the tactics scammers use is to make their charity’s name similar to a larger organization. Because the name sounds and looks familiar, people are more likely to donate. But in reality they’re giving away money or personal information that could harm their credit.
·Don’t give out personal information. The IRS warns against using credit cards or checks to donate to charities you are unsure about. These methods give scam artists your personal information. Protect your credit by protecting your personal info.
· Avoid sending cash. On the other hand, you don’t want to send cash either. For both security and tax record purposes, you want to keep a paper trail of any donations. Thus, to contribute by check or credit card, you must verify that the charity is legitimate.
· Report potential fraud. Finally, if you have suspicions about a charity, it’s important to report it. You’re protecting unsuspecting victims by doing so. The IRS also provides more information about tax scams and schemes.

Not All Mortgage Modifications Are Equal

The good news is that not all mortgage modifications impact your credit score the same way! Furthermore, the current standing of your credit score may also affect your decision. If you’re struggling with mortgage payments, your credit might not already be in the best shape. If this is you, then your credit score is likely to be relatively unaffected by a mortgage modification. However, if your credit score is in great shape, you might want to reconsider a mortgage modification if your credit is important to you.

There are also various type of mortgage modifications. Through the government’s HAMP – Home Affordable Modification Program – homeowners will experience a drastic drop in payments. Whether or not this hurts your credit score depends on whether lenders report missed payments during the trial period as delinquent. Through HAMP, homeowners will experience a 3-month trial period to determine whether the program is right for them. However, some lenders might report you as current if you were up-to-date with payments before you began the program.

To protect your credit, it’s important to always make payments when you’re able to. Never intentionally miss a payment, especially since this shows on your credit history. While some people might prefer a foreclosure, it’s important to note that a foreclosure could be more damaging to your credit score than a loan modification. To protect your credit, it’s important to be in contact with your lenders. Aside from negotiating financial terms, consider negotiating the ways that they report your financial activity to the credit companies. If you “paid as agreed,” your score won’t take a beating.

4 Credit Report Considerations

The key to checking your credit report is to focus on accuracy. Since financial documents affect your everyday life, it’s crucial to ensure that everything is right and that anything that’s wrong is immediately fixed. Key elements to watch out for include:

1. Personal Information. Remember, mistakes are not uncommon on credit reports. Human error, similar names, or inadvertent mix-ups can all lead to inaccurate information. Ensure that all of your personal information is accurate, especially if you have any suffixes such as Jr. or Sr. You don’t want to be mixed up with another person on your credit report!
2. Activity. This is the prime time for you to be on the lookout for fraud or identity theft. See any activity you don’t recognize? Then investigate it and report it immediately. Quickly countering errors on your credit report is one of the most crucial strategies to defending your financial reputation.
3. Inquiries. Anytime you look into opening a new credit card or getting insurance, these people are allowed to “inquire” about your credit score. These inquiries should only remain for up to two years before vanishing. If you see any that are over two years old, be sure to follow-up and have the inquiry removed.
4. Public records. Have you ever filed for a bankruptcy? Mortgage modification? Ensure that all of your public records are accurate. Any inaccuracy could be unjustly harming your credit score.