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Average credit score is at all-time high — for consumers who can save

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The average consumer credit score has gone up during the pandemic, an unexpected positive side effect on personal finance from relief efforts and changes to everyday life.

On Monday, the Fair Isaac Corp., which markets the proprietary algorithm used by the three major credit bureaus to determine the most commonly used credit score, known as FICO, reported that the average credit score now stands at 711, a full five points higher than a year ago.

The FICO score ranges from 300 to 850 and is widely used by banks and lenders to determine a consumer’s credit risk. A lower score may mean a borrower has to pay a higher interest rate or put more money up front — or even be shut out of a loan, credit card or financial product entirely.

Several factors go into determining a credit score, with one of the most important being a borrower’s credit utilization ratio. And that’s where the coronavirus comes in.

For families that weren’t among the worst off, the pandemic brought credit relief in three major ways that allowed them to pay off their debts faster: They were able to use part of their stimulus checks. They saved money by not going out for dining, traveling or recreation. And rock-bottom interest rates let them refinance their homes and lower their monthly payments.

All three of those things benefited Evelyn Cox, 40, of Utah, mother of two.

At the beginning of the year she was staring down a household debt of over $20,000. Then both she and her teenage daughter had car accidents. They weren’t hurt but the cars were totaled and when she went to replace them the loans were more expensive then she expected.

“I felt like we’re hanging on by a thread year after year, and I can’t deal with the stress,” Cox told NBC News.

That’s when she decided to take action and get the family’s finances in order. Her husband works in customer service and she does medical transcription and odd jobs to pick up extra income, like selling items on eBay, and working for DoorDash. Between the two of them they gross $45,000 a year. On that income and with two teenagers, one of whom has special needs, tackling their debt wouldn’t be easy. But she got to work.

She printed out a poster-board chart of her credit score and debt and put it up in her bedroom. She put the whole family on a budget and started paying down debt. Then the pandemic happened.

“Initially we were all overwhelmed and all at each other’s throats,” Cox said. But there were some unexpected upsides.

The family was able to use most of its stimulus payment to pay down their debt, she said. They made most of their meals at home, saving more money. With school going remote, she no longer drove her son to a far-off school that met his needs, saving on gas. Vacation money also went toward paying off debt. Then she and her husband refinanced their mortgage, reducing the term of their loan and their monthly payments. Everywhere they saved, Cox plowed most of the money into paying down their debt.

And month by month the lines on the chart in her room got better and better, with the debt going down and their credit score going up. It was “a huge motivating factor,” Cox said.

Now she’s debt free, her credit score is an excellent 800, and she’s working on both building an emergency fund and learning how to invest.

With the household finances in a more comfortable spot, she is now able to reach out more to help others, including giving more frequently and more generously to those in need.

“It feels incredible,” Cox said. “The peace of mind is worth so much more than the financial gain. I wish we’d done it years ago.”

She’s not alone.

“Borrowers are prioritizing their credit health with the hopes of qualifying for the super low interest rates on homes, cars,” Farnoosh Torabi, a financial expert and host of the “So Money” podcast, said in a message. “There is a cohort of consumers that very intentionally worked on credit repair and credit health to help increase their chances for low rates.”

Financial pros say there has also been specific relief offered in the coronavirus relief legislation that has helped consumers stay current with their creditors, improving their scores.

“Even if cash-strapped consumers aren’t currently paying their credit accounts, as long as they have an agreement in place with their creditors — like auto finance firms, student loan companies or credit card issuers — then those businesses are likely still reporting nonpaying customers as having accounts ‘paid as agreed,’” Lynnette Khalfani-Cox, a personal finance expert, said in an email.

“This is consistent with the relief provided in the CARES Act, and just having credit tradelines or accounts reported as ‘current’ or ‘paid as agreed’ maintains or improves a person’s credit scores,” Khalfani-Cox said.

While improving a credit score may pale in significance to the global issues the world is facing, it does give consumers more options, said Ted Rossman, a credit industry analyst for CreditCards.com.

“Even if you’re not in the market for a credit card, mortgage or car loan right now, you very well could be in the next several years. Aside from loans, many apartment rentals, cellphone plans, utility subscriptions and even some job offers involve credit checks.”

Every silver lining has a cloud too, though, and U.S. consumers can still be in for some dark days.

“There is a bit of a lag between when a major macroeconomic event occurs and when the FICO score reflects that,” wrote FICO VP Ethan Dornhelm.

For the millions of Americans who are out of work, falling behind on their bills and maxing out their credit cards, their FICO scores will eventually drop. During the Great Recession of 2007-09, credit scores didn’t hit their lowest point until months after the crisis officially ended.

For some consumers battling Covid-19-induced hardship, government relief and assistance programs are ultimately delaying the inevitable blow to their credit rating.

“In the case of the Covid-19 pandemic, the lag between the onset of the pandemic and when credit files begin to show the financial strain that millions of Americans are feeling is further affected by the significant steps taken by both the government (stimulus spending) and private sector (lender payment accommodations) to help consumers ‘bridge the gap,’” Dornhelm wrote.

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Black Lives Matter job fair aims to provide economic opportunity in Polk County

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LAKELAND, Fla. (WFLA) – Black Lives Matter organizers in Polk County are putting together a database to help lead people on the path to economic opportunity.

“I do a lot of things. General contracting, general clean up,” Tony Jones, of Lakeland, told a local recruiter.

Tony Jones, who lives in Lakeland

Jones is a veteran looking for a job. He served four years in the U.S. Army.

He wants to work, just needs an opportunity.

“You can’t pay no bills and eat if you’re sitting at home waiting for somebody to hand you something. You gotta get out and get it,” he said.

Jones came to the Dream Center in Lakeland to try to take those steps at a job fair organized by Black Lives Matter Restoration Polk Inc.

Black Lives Matter advocates protested to end police brutality this summer in Lakeland and all across the world with the ultimate goal of social justice.

“What’s going to happen next with Black Lives Matter after the marching and the rally? For us, it’s providing economic opportunity,” said Jarvis Washington, President & Founder of Black Lives Matter Restoration Polk Inc.

Wednesday’s job fair event launched Washington’s economic initiatives.

“We’re going to be working on the personal growth of the individual. We’re going to be helping them on everything from the mentoring program, credit repair programs, teaching them money management,” he said.

BLM partnered with Civitas Recruiting for the event.

Susan Freebern created the organization a few months ago to help community leaders steer under-served communities to good-paying jobs.

“They don’t know where to go to get these kinds of jobs. They don’t feel like they’re offered these kinds of jobs through regular staffing companies. I’m just going to go find those jobs and bring them to them,” she said.

On Wednesday, Civitas Recruiting and Black Lives Matter Restoration Polk gathered information to recruit workers for future projects through the Work Opportunity Tax Credit program.

“Nothing’s gonna be fixed overnight or taken care of. I think we just need to all strive together, make positive steps. That’s all you can do,” Jones said.

To sign up for the program click here.

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How DIY Debt Relief is Simplifying The Road to Financial Freedom

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Los Angeles, California, Dec. 02, 2020 (GLOBE NEWSWIRE) — “Debt” is an anxiety-inducing topic for most Americans. According to financial experts, about 80% of Americans have some form of consumer debt and are $38,000 in debt, excluding mortgage debt. Unfortunately, financial literacy isn’t a topic that’s extensively covered in schools. As a result, many Americans lack valuable knowledge on personal finance topics — including how credit cards and loans actually work, or how to get out of debt quickly should they experience financial hardship. When times are tough, the concept of “free” money is very appealing and overrides reservations about amassing large amounts of consumer debt.

While consumers have numerous debt-relief options — ranging from consumer credit counselling to debt settlement to bankruptcy — the actual road to recovery is fraught with numerous hazards that include repayment terms with unaffordable monthly payments, repayment terms that take too long, exorbitant fees, and false promises.

With over a decade of experience in the credit and finance industries, these are problems the founders of DIY Debt Relief understand all too well. Debt relief — specifically settling delinquent accounts with creditors and collectors — cost consumers more time and money than most can afford. Compounding the problem are unscrupulous service providers that make promises they can’t keep — charging too much for the service they provide and taking too long to provide said relief. It was with these issues in mind that DIY Debt Relief was created. 

DIY Debt Relief is a web-based company that provides educational videos and supporting materials to offer a “do it yourself” alternative for distressed consumers. By eliminating the need for a third-party service provider, consumers can avoid the prohibitive fees they charge — which in turn reduces the amount of time needed to settle accounts, pay off the agreed upon balances, and become debt-free. Additionally, even creditors and collectors who often refuse to work with third-party service providers are all too eager to work with consumers directly.

 The content, tools and resources DIY Debt Relief provide are designed to help consumers assess, evaluate, and improve their financial situation. The information is based on United States federal laws and regulations which govern the actions of creditors and debt collectors, which means they can be accessed and utilized in all 50 states. With these assets in hand, consumers can create a plan of action to get their delinquent, unsecured debt paid off as quickly and as affordably as possible. And with the belief that credit repair is the next logical step after the debt settlement and repayment process is completed, DIY Debt Relief provides additional resources and information teaching consumers how to quickly and correctly rebuild their credit profiles and FICO scores. 

The DIY Debt Relief process is easy to follow, gives the consumer control, is less expensive to implement, takes less time to complete, and can provide better results. Rather than relying on a third-party to entrust your financial future to, consumers now have the option of taking the initiative and doing the necessary work to get themselves to the debt-free future they deserve. With the goal of taking DIY Debt Relief internationally, the eventual next step is to make the videos in other languages. For right now, DIY Debt Relief’s videos educate on debt relief only in the United States — but its possibilities are endless, its effect promising, and its only trajectory from here is up.  

DIY Debt Relief IG: @diydebtrelief   www.diydebtrelief.com

Media Contact: support@diydebtrelief.com

This news has been published for the above source. DIY Debt Relief [ID=15547]

Disclaimer: The pr is provided “as is”, without warranty of any kind, express or implied: The content publisher provides the information without warranty of any kind. We also do not accept any responsibility or liability for the legal facts, content accuracy, photos, videos. if you have any complaints or copyright issues related to this article, kindly contact the provider above.  

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How DIY Debt Relief is Simplifying The Road to Financial Freedom | 2020-12-02 | Press Releases

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Los Angeles, California, Dec. 02, 2020 (GLOBE NEWSWIRE) — “Debt” is an anxiety-inducing topic for most Americans. According to financial experts, about 80% of Americans have some form of consumer debt and are $38,000 in debt, excluding mortgage debt. Unfortunately, financial literacy isn’t a topic that’s extensively covered in schools. As a result, many Americans lack valuable knowledge on personal finance topics — including how credit cards and loans actually work, or how to get out of debt quickly should they experience financial hardship. When times are tough, the concept of “free” money is very appealing and overrides reservations about amassing large amounts of consumer debt.

While consumers have numerous debt-relief options — ranging from consumer credit counselling to debt settlement to bankruptcy — the actual road to recovery is fraught with numerous hazards that include repayment terms with unaffordable monthly payments, repayment terms that take too long, exorbitant fees, and false promises.

With over a decade of experience in the credit and finance industries, these are problems the founders of DIY Debt Relief understand all too well. Debt relief — specifically settling delinquent accounts with creditors and collectors — cost consumers more time and money than most can afford. Compounding the problem are unscrupulous service providers that make promises they can’t keep — charging too much for the service they provide and taking too long to provide said relief. It was with these issues in mind that DIY Debt Relief was created.

DIY Debt Relief is a web-based company that provides educational videos and supporting materials to offer a “do it yourself” alternative for distressed consumers. By eliminating the need for a third-party service provider, consumers can avoid the prohibitive fees they charge — which in turn reduces the amount of time needed to settle accounts, pay off the agreed upon balances, and become debt-free. Additionally, even creditors and collectors who often refuse to work with third-party service providers are all too eager to work with consumers directly.

The content, tools and resources DIY Debt Relief provide are designed to help consumers assess, evaluate, and improve their financial situation. The information is based on United States federal laws and regulations which govern the actions of creditors and debt collectors, which means they can be accessed and utilized in all 50 states. With these assets in hand, consumers can create a plan of action to get their delinquent, unsecured debt paid off as quickly and as affordably as possible. And with the belief that credit repair is the next logical step after the debt settlement and repayment process is completed, DIY Debt Relief provides additional resources and information teaching consumers how to quickly and correctly rebuild their credit profiles and FICO scores.

The DIY Debt Relief process is easy to follow, gives the consumer control, is less expensive to implement, takes less time to complete, and can provide better results. Rather than relying on a third-party to entrust your financial future to, consumers now have the option of taking the initiative and doing the necessary work to get themselves to the debt-free future they deserve. With the goal of taking DIY Debt Relief internationally, the eventual next step is to make the videos in other languages. For right now, DIY Debt Relief’s videos educate on debt relief only in the United States — but its possibilities are endless, its effect promising, and its only trajectory from here is up.

DIY Debt Relief IG: @diydebtrelief www.diydebtrelief.com

Media Contact: support@diydebtrelief.com

This news has been published for the above source. DIY Debt Relief [ID=15547]

Disclaimer: The pr is provided “as is”, without warranty of any kind, express or implied: The content publisher provides the information without warranty of any kind. We also do not accept any responsibility or liability for the legal facts, content accuracy, photos, videos. if you have any complaints or copyright issues related to this article, kindly contact the provider above.


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