As a credit expert, I am constantly asked by business owners and entrepreneurs if I can help them establish business credit. The answer is…Yes! We are in the process of adding building  business credit education to our products. We are so excited! Stay tuned for more.

I was on a well respected credit website today reading their recent blog and I was blown away by the misinformation they were giving about the pros and cons of filing bankruptcy. Having gone through a bankruptcy personally and having counseled hundreds of clients who have filed a bankruptcy, I can tell you that bankruptcy is not the kiss of death for your credit. While I am not an advocate of people running out and filing bankruptcy without careful consideration, I am advocate for truth.

I often wonder when I see an anti-bankruptcy campaign whose interest is really being considered. Credit card companies will do all they can to have you believe bankruptcy is a horrible thing and you are a horrible person for filing. Consumer credit reporting agencies TransUnion, Equifax, Experian (The Big Three) would have you believe the same.
Why? Obviously the credit card companies want to you pay up, not only what you owe but all of the extras they tack on. I’ve seen a $300 credit card become an over $1000 collection. So why do The Big Three want to avoid bankruptcy? Because they make money every time your account gets sold to another collection agency. And, the worse your credit score the more money they make.

Ok, I know what you are thinking… Victoria, people should take responsibility and pay what they owe. I could not agree with you more. But, what do you tell the family who never missed a payment until the major wage earner was stricken with cancer and the insurance company stopped paying? The number one cause of bankruptcy is…You guessed it – medical bills. And, yes doctors deserved to be paid. The problem is that often doctors will not set up payment arrangements. So good people end up filing bankruptcy.

Now to debunk bankruptcy myths:

Myth 1: A bankruptcy will affect your credit score for 10 years.
Truth: While bankruptcy may stay on your credit report for 10 years (chapter 7 only), your credit score will not be affected for the entire 10 years. With proper reestablishment of credit your score will begin to recover quickly.

Myth 2: Filing a bankruptcy will lower your score to the 500′s.
Truth: If you are not paying your credit cards and have maxed them out. Your credit score is more than likely already in the 500′s.

Myth 3: Accounts included in a bankruptcy will remain on your credit report for 7 years.
Truth: Seven years is a MAXIMUM not a MINIMUM amount of time an account included in bankruptcy may remain on a credit report.

Myth 4: You will not be able to get a good mortgage rate for 5 years after bankruptcy.
Truth: Many consumers can qualify for an FHA (federally backed mortgage) 2 years after bankruptcy with very attractive rates. Three years if a home was involved in the bankruptcy.

Myth 5: Employment and insurance can be severely affected after a bankruptcy.
Truth: The impact on insurance is typically much less than the interest, fees, and late charges charged by credit card companies. And, under United States Bankruptcy Code an employer can not discriminate against you for filing bankruptcy. However, they can and most likely will for judgments, late pays, and multiple collections.

As I said before, I am not an advocate of people running out filing bankruptcy. If you are contemplating filing bankruptcy, make sure you weigh all of your options.

I have spent almost two decades empowering my clients financially through credit education. If you have filed bankruptcy and need help re building your financial life, call me at 317-527-1440. I am here to help.

Tags: banking, bankruptcy, business, checking, collections, credit, Credit Education, credit score, Credit Scoring, credit tip, debt collection, Fair Credit Reporting Act, FICO, FICO.credit, money, Money Tips, Real estate

Did you know that almost everything you own and use for personal or investment purposes is a capital asset? Capital assets include a home, household furnishings and stocks and bonds held in a personal account. When a capital asset is sold, the difference between the amount you paid for the asset and the amount you sold it for is a capital gain or capital loss.

Here are ten facts from the IRS about gains and losses and how they can affect your Federal income tax return.

1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.
2. When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you paid for it – is a capital gain or a capital loss.
3. You must report all capital gains.
4. You may deduct capital losses only on investment property, not on property held for personal use.
5. Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.
6. If you have long-term gains in excess of your long-term losses, you have a net capital gain to the extent your net long-term capital gain is more than your net short-term capital loss, if any.
7. The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income. For 2010, the maximum capital gains rate for most people is 15%. For lower-income individuals, the rate may be 0% on some or all of the net capital gain. Special types of net capital gain can be taxed at 25% or 28%.
8. If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.
9. If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.
10. Capital gains and losses are reported on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040.

For more information about reporting capital gains and losses, see the Schedule D instructions, Publication 550, Investment Income and Expenses or Publication 17, Your Federal Income Tax. All forms and publications are available athttp://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Original published: Issue Number:    IRS Tax Tip 2011-35

Tags: 1040, tax, tax return, taxes

According to CNNmoney.com,  Adjustable Rate Mortgages, also known as ARMS are coming back. Adjustable rate mortgages accounted for nearly 70% of all mortgages during the housing boom. ARMs disappeared after the bust,  accounting for only 3% of the market in 2009.  Now, they make up 5% of all mortgages issued.  Freddie Mac predicts an increase to 10% in December.

No doubt that a 5/1 Arm can save homeowners considerably, I still think it’s a bad idea. The sales pitch is the same.  “This is a great deal for anyone not planning to stay in their home.” “You can get a lower interest rate.” Currently, a 30 year fixed mortgage is at 5% while a 5/1 ARM is at 3.5%.  On a $200,000 house that’s a savings of over $10,000 over the 5 year term.

As a former loan officer,  I could see the value of ARM products if home buyers were planning to stay in a home for only  seven or eight years. The difference – As a Consumer Credit Expert, I always made sure my clients knew the risks.

I asked my clients the hard questions:

What would happen if you lost your job and could not move or refinance, would you be able to handle a mortgage payment that could be $500 more than  you’re paying under the ARM?

What happened if something happened to your credit and you could not refinance?

If you find yourself in front of a  loan officer pushing an ARM, ask yourself. What happens if I can’t move or refinance when the ARM comes due? Do not be lured by short term savings.

As a Consumer Credit Expert, I educate consumers on the pitfalls of credit mistakes. Credit is important, and we can help you understand it.

Call us with your credit questions 317-527-1440

You’ve seen the ads, “Get your credit score now” “Instantly get your credit score” and so on.  Buyer beware! Not all credit scores are created equal.  Fair Issac and Company set the standard for the credit scoring model that we use in the United States.  Most lenders will use the FICO score to determine your credit worthiness.

In an attempt to compete with FICO the big three credit reporting agencies, TransUnion, Equifax, and Experian have come up with their own scores. On the surface this does not sound like a bad idea.  But, here’s the rub.  Many lenders only use the true FICO score.  So, the score most consumers buy is worthless.

I have many clients come to me not understanding why when they pull their credit they have a different score than what the lender has. Typically this is because the client bought the wrong score.  True FICO scores can be purchased from myfico.com .

I urge my clients to concentrate not on their credit score, but on managing their credit. I urge them to pay their bills on time, keep revolving credit balances  low or at  zero dollars, and do not open unnecessary lines of credit.  Unless you are looking to purchase a home, auto, or need to take out additional credit,  you do not need your credit score.

Tags: banking, budget, credit, Credit Education, credit score, Credit Scoring, credit tip, debt collection, dominate your destiny, Empowerment, FICO, FICO.credit, finance, savings, Wealth

Tags: banking, budget, business, checking, credit, Credit Education, credit inquiries, credit score, Credit Scoring, credit tip, dominate your destiny, entreprenuership, Money Tips, saving, Wealth

According to FICO the creator of our current credit scoring model, maxing out credit cards can reduce you credit score by as much as 45 points.

Tags: credit, Credit Education, Credit Scoring, credit tip, Empowerment, Fair Credit Reporting Act, Fair Debt Collection Practices Act, FICO, FICO score, finance, home purchase, money, Money Tips, Wealth

We all make them – MONEY MISTAKES. It’s easy to fall into the traps and snares that credit card companies, banks, and other lending sources are so good at enticing consumers with. We are inundated with special offers, cash back, rebates, guarantees, rewards and so on. Buyer Beware! These tactics and offers are designed to keep you in debt. We recently did an episode on The Credit and Finance Show about common money mistakes.

These mistakes include:

• Paying on minimums on your credit cards. This can cost you thousands of additional dollars in interest and fees.
• Buying a brand new car. AAA auto in a study states that concluded that the average new car depreciates $3,392 per year.
• Smoking. This is a costly habit that costs an average of $2000 per year. The health costs are immeasurable.
• Keeping a drafty attic. You can often find low cost services that can help with insulation if you cannot do it yourself.  Beware of spending too much on high dollar energy savings items.  Weigh the costs against the savings.
• Ignoring your student loan. Student loans do not go away. If you are unable to make your payments call the lender and let them know.

Other resources:

12 Obscure Websites That Can Save You Money

Avoid These 7 Cash Back & Credit Card Traps

Many of us make common money mistakes that can not only cost us thousands of dollars, but can also affect our credit rating rating. If you have made financial mistakes, like many of us have, we can help. Call us today and start changing your life from fear and frustration to happiness and relaxation.

Tags: budget, business, collections, Credit Education, credit score, credit tip, debt collection, finance, money, saving, Wealth

Everyday hundreds of Americans apply for a home  mortgage. Unfortunately, many lenders do not instruct their clients on the do nots of home financing. Consequently, before the loan process is complete, an approved buyer becomes unapproved.

Chuck Bricker of Bank of America  and his team has put together a list of what they call  “Thou Shall Not”.   According to Chuck Bricker of Bank of America the following  things  should NOT be done between the time of submission of your home loan and closing.

Chuck Bricker goes on to state, “Some of these may seem very rudimentary and even silly, but I promise you that each one is from at least one real life event in my years of experience.”

Thou Shall Not:

1. Quit your job.
2. Overdraft your checking account.
3. Stop paying your rent or mortgage.
4. Change employers or compensation structure with current employer, at least without notification to your loan officer first.
5. Open any new accounts – including to finance appliances, etc, for your new house.  Tempting as it may be, get the keys first, please.
6. Make any CASH deposits to your account(s).
7. Liquidate any major accounts, like 401k, without, first, getting proper instructions on documenting the withdraw or loan & deposit into your checking account properly.
8. Get gift funds from a friend or family member – Contact me first for proper instructions on how to transfer the money from donor to you & document it for your loan file.
9. Do anything that will result in a new collection, judgment or tax lien, etc.
10. Finance a new Harley Davidson & make your first excited phone call about the new purchase to your me, your loan officer.  Sorry, I probably will not share in your excitement.
11. Change your marital status without notifying your loan officer.
12. Change your target closing date without notifying me first.
13. Forget to inform me that the home has a huge hole in the roof that could second as a shower when it rains.
14. Withdraw a large sum of money from your account(s) to make a major purchase – appliances, automobile, Michael Jordan rookie card, etc.
15. File bankruptcy.
16. Stop making payments or pay late on your current debts.
17. Get an loan of any type for your down payment.

Situations that reflect these items above do sometimes arise.  If a client has the possibility of experiencing one (or more) of the above items – or anything similar – please contact  your loan officer.  There are others involved in helping during the loan process, such as  processors, assistants, etc… According to Chuck Bricker, for matters like the above, your loan officer is best equipped to help you navigate potential problems.

Finally, Chuck Bricker suggest that if you have applied for a home loan and perceive any bumps in the road, be proactive and up-front with your loan officer.

Tags: banking, credit, Credit Education, credit tip, Home Buying, home purchase, money, Money Tips, Real estate, saving, savings

Today Victoria and Jeff was joined by Author, Motivator, Divine Inspirational Speaker, Dr. CJ Koen.  Today’s scripture is: “For I know the plans I have for you, “declares the LORD,” plans to prosper you, and not to harm you, plans to give you hope and a future.” Jeremiah 29:11 (NIV)

We had a blessed wonderful time today with Ms CJ Koen on BlogTalkRadio,  Below are a few nuggets from today’s show.

• Prosperity  is not your economic situation but your heart situation.
• God wants us to prosper.
• God does not give us spirit of fear, but of power, love , and of sound mind. 2 Timothy 1:7
• God knows what is coming down the road.
• When God gives you something he gives you peace with it. (Psalm 29:11)
• God knows what is best for us. People want to buy a home, but may not be financially, or emotionally ready to purchase that home.
• Seek God’s wisdom before making major decisions.
• God wants us to have plenty of  joy.
• Money is not evil. The LOVE of money is evil. (1 Timothy 6:10) Listen to how Ms CJ breaks down the truth.

Click here to download today’s show and get all of the golden nuggets from today’s show.

For more information about Ms. CJ Koen visit her on the web at mscjandyou. Follow her on twitter @mscjandyou. Join her on facebook,   Listen to Ms CJ Koen on BlogTalkRadio, Her show is uplifting and inspirational.

Tags: credit, Credit Education, Empowerment, finance, Inspiration, Life, Money Tips, Wealth