SAN DIEGO, Dec. 16, 2020 /PRNewswire-PRWeb/ — FMG Suite, a SaaS company specializing in marketing software and services for financial advisors and insurance agents, today announced that it has launched Marketing Playbook––an enterprise-level marketing solution for Avantax Wealth Management℠ financial professionals.
Marketing Playbook, powered by FMG Suite, consists of a suite of white-labeled tools that enable effective, multi-channel marketing via social media, email, direct mail, and text message; full access to the FMG Suite content library with built-in compliance handling for all communications; and a robust set of event marketing tools.
With Marketing Playbook, Avantax financial professionals can launch their own content marketing plans using FMG Suite’s professionally-written, FINRA-reviewed materials. Featuring a content library that spans a wealth of tax planning and other financial topics, Marketing Playbook also supports multiple communication modes to reach clients and prospects via their preferred digital and offline methods.
Integrating with Avantax Compliance streamlines the review process and automates archiving, making it easier for Avantax financial professionals to communicate consistently with clients and market effectively to prospects. With the included event tools, the Avantax users can easily and effectively promote upcoming events they host, including sending invites, collecting RSVPs, and managing pre- and post-event communications.
“For Financial Professionals, it’s essential to deepen trust through consistent communication, especially during volatile market conditions like we’ve seen in 2020,” said Nate Biddick, Vice President, Avantax Wealth Management Growth. “FMG Suite created a powerful platform from which the Avantax Marketing Playbook will continue to grow. We are pleased with the tools in our Marketing Playbook, powered by FMG Suite, and believe we are helping our very busy Financial Professionals by providing them with ready-to-use materials, many of which are turnkey in nature, so their firms can market to prospects while the Financial Professionals stay focused on current clients and growth-oriented strategies.”
“Despite recent events that have rocked our industry, we’re proud to have partnered with Avantax to launch Marketing Playbook at a critical moment to help financial professionals communicate consistently with their clients and prospects,” said Scott White, CEO, FMG Suite. “FMG Suite’s enterprise solution empowers Avantax with the necessary tools, educational articles, practice management advice, and timely content, including a series intended to help our clients respond to market volatility caused by the COVID-19 pandemic,” he added.
About Avantax Wealth Management℠ Avantax Wealth Management℠ (which comprises the Wealth Management business of Blucora, Inc.) offers a tax-advantaged approach for comprehensive financial planning. Through its Tax-Smart approach, Avantax representatives help clients leverage taxes to create financial growth opportunities. Most financial companies treat taxes as an afterthought, or not at all, even though taxes are one of life’s most complex and costly expenses. Avantax uses technology, tax and wealth management insights to uncover tailored and advantageous opportunities across our clients’ financial lifecycles to help enable better long-term outcomes.
Avantax Wealth Management℠ is the holding company for the group of companies providing financial services under the Avantax name. Securities offered through Avantax Investment Services℠, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services℠. Insurance services offered through licensed agents of Avantax Insurance AgencySM and Avantax Insurance Services℠. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019, 972-870-6000
The Avantax family of companies exclusively provide investment products and services through its representatives. Although Avantax Wealth Management℠ does not provide tax or legal advice, or supervise tax, accounting or legal services, Avantax representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice. Please consult our firm and your legal professional for specific information regarding your individual situation.
About FMG Suite FMG Suite powers an all-in-one marketing platform that helps financial advisors and insurance agents attract new leads, stay connected with clients and grow their businesses. Rated first in market share and customer satisfaction in the 2019 and 2020 T3 Software Survey Report, FMG Suite helps its customers develop comprehensive marketing strategies and automate their most effective marketing tactics. FMG Suite is headquartered in San Diego, CA with satellite offices across the United States.
While most Americans have weathered the pandemic financially, about 38 million say they are worse off now than before the crisis began in the U.S. a year ago.
Overall, 55% of Americans say their financial circumstances are about the same now as a year earlier, and 30% say their finances have improved, according to a new poll from Impact Genome and The Associated Press-NORC Center for Public Affairs Research. But 15% say they are worse off.
The problem is more pronounced at lower-income levels: 29% of Americans living below the federal poverty line say their personal finances worsened in the past year. Roughly that many also find themselves in a deepening financial hole, saying they struggled to pay bills in the past three months.
The financial outlook for Americans below the poverty line also appears bleak, as 18% say they’ve fallen short on their bills by between $100 and $500 every month. Another 4% say they fall short more than $500 per month.
Despite this high financial need, just 15% of these Americans are getting help from financial services such as debt relief, credit repair, or financial counseling. When they do use these services, low income Americans are more likely to seek some of these services from government or a nonprofit, as opposed to private firms than those with higher income (32% vs. just 4%). Affordability is often cited as a barrier among those lower income adults who do not use these services.
“Living paycheck to paycheck” but paying bills
Britney Frick, 27, is among those whose finances have taken a hit. She worked as a substitute teacher before the pandemic but her role was eliminated. Initially, she found a telecommunications job that allowed her to work from home, but the hours began to dwindle then dried up altogether.
Frick ended up unemployed for six months but was able to get by using her savings, reduced rent and help from her parents.
“I am slowly getting back on my feet but am nowhere near where I was before COVID,” she said.
Frick got a job at a daycare in March, and the steady work is helping her rebuild her financial picture.
“I am still living paycheck to paycheck but at least the paycheck is covering the bills,” she said. “But I am happy to be back at work honestly and happy that things are kind of returning to normal.”
The pandemic has wreaked havoc on the economy — the United States still has 8.4 million fewer jobs than it had in February 2020, just before the pandemic struck.
The government has passed three major relief bills in response, which included direct economic relief payments to individuals. That has helped ease the suffering of some.
The latest round of government payments — $1,400 to individuals — were sent out beginning last month. Households, on average, are using, or plan to use about one-third of the money to pay down debt, about 25% on spending and put the rest into savings, according to a report released last week from the New York Federal Reserve. That closely mirrored spending of prior relief payments.
Stark contrast in savings
Overall, the Impact Genome/AP-NORC poll found 52% of Americans say they were able to save money for most of the past three months, while 37% broke even and 10% were short on paying bills. Among Americans living below the poverty line, 29% say they struggled to pay bills recently, while just 16% have saved. By comparison, 61% of those living far above the poverty line say they have been able to save, including some who are putting away more than $500 per month.
Nearly a third of all Americans had not set up a long-term savings account up, such as a 401(K) retirement plan or college savings account, before the start of the pandemic, while 11% of those who did made an early withdrawal to pay for an immediate financial need.
There also are wide racial disparities in financial wellbeing, with 57% of White Americans, 47% of Hispanics and just 39% of Black Americans saying they have saved recently. Black and Hispanic Americans are about twice as likely as White Americans to say they have come up short on bill payments.
Andrew Holland said his family’s finances were fairly steady for most of the pandemic. The California resident worked as a hospice nurse and case manager and his wife kept her job with a refinery. But the stress and isolation of the pandemic led him to reconsider his work.
Unlike before the pandemic, he had no in-person interaction with colleagues or friends to relieve some of the pressure of his job. So he quit and found a new job in hospice care with fewer hours. His wife also got a new job with better pay.
While their family finances took a temporary hit and they spent some savings, he expects to recover. Holland and his wife have started tracking their spending more closely and are now planning for an earlier retirement.
“This really made me look at what do I want to do and when do I want to do it,” Holland, 35, said. “I feel incredibly lucky that the worst that happened is I lost a month’s wages and got a job with fewer hours.”
The poll found many Americans — nearly a third — had not had investment or similar long-term savings accounts set up even before the pandemic. Another 19% say they have been able to add more to investments like a 401(k) or a college savings plan, and 38% say the amount hasn’t changed compared to last year.
Holland said he is disheartened by the inequality of how the pandemic has played out for people, and is concerned the imbalance will never be corrected.
“I am glad that it gave me the push to look at my finances and plan a little bit more for the future,” Holland said. “I definitely wish it had come at a much lower cost for the world as whole.”
If you dream of owning your home but don’t where to start, the Northwest Ohio Community Action Commission (NOCAC) probably has the answers you’re looking for.
NOCAC is celebrating Financial Literacy Month with live, virtual housing workshops on home repair and home purchase from 6-7:30 p.m. Tuesday, April 20. Topics include US Department of Agriculture home loans and home repair loans, credit-building products like NOCAC’s Matched Savings Program and home weatherization loans. Anyone can register to attend by contacting NOCAC’s financial coach, Amy McMaster, at 419-990-5136, ext. 3122, or [email protected].
“Most people aren’t aware there are free programs to help them purchase their home or repair it,” McMaster said. “This workshop brings all of these agencies into one location so the public can learn more and have their questions answered by the experts. There are so many families on a fixed income, including our elderly, who are not in safe housing. NOCAC wants to make sure families are aware of programs that could make their home more energy efficient.”
NOCAC’s Weatherization Program aims to improve energy savings for income-eligible individuals by providing energy-related home repairs and modifications to improve safety, comfort and efficiency while reducing heating and cooling costs.
The Community Housing Impact and Preservation (CHIP) program also provides home repair funds, including for the full rehabilitation of a property, including correction of structural issues, heating, electrical, plumbing, lead paint hazards, accessibility and water or sewer issues.
The USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low- and very-low-income families. No down payment is typically required and there is no private mortgage insurance involved with low-interest home loans.
All services are free and available through NOCAC’s Financial Opportunity Center (FOC), including the Matched Saving Program.
“I don’t have a magic wand to magically make all their credit problems disappear, but I do have some resources that can make the journey to home ownership easier,” McMaster said. “Most of the families I work with don’t have a credit score of 640 when we first meet. They feel overwhelmed and do not think home ownership is in their future. I help them see how to improve their credit and where to get started on the journey … It’s like eating a whale — one bite at a time.
“There are so many people who have the dream of owning their own home and do not know where to start,” McMaster said. “This housing workshop explains the process and links them to agencies that can assist. Attendees will walk away with information and resources to make their home ownership dream come true.”
NOCAC is also offering a free, online credit repair class at 6 p.m. April 27. Contact the FOC at 419-990-5136 or www.nocac.org to find out more.
FICO credit scores are the most widely used scores by lenders and typically range from 300 to 850. This score is calculated from information in your credit report — including whether you’ve paid accounts on time, how much you owe, how long you’ve had credit, what types of credit you have and how many new accounts you have. Although there are five main factors used to figure out your credit score, there are countless ways to screw it up.
“There’s a lot of things you could be doing wrong,” said credit coach Jeanne Kelly. “Most of the time, the people who come to me don’t even realize what they’ve done wrong.”
It is super easy to forget to check your credit score or be too worried to do it. Some say that ignorance is bliss. Unfortunately for them, that blissful ignorance will come to an end the day they want to buy their first home or car or rent an apartment.
This is one of the biggest mistakes you can make while also being the easiest to avoid. Checking your credit score will alert you if there is fraud linked to your name, show you your credit score and let you know if anything else needs to be remedied.
Your payment history has a major impact on your credit score. U.S. News & World Report estimated that a single late payment can lower a credit score by 100 points or more. However, borrowers might be able to mitigate the damage, assuming they act fast. While missing a payment by just a few days likely won’t put your scores at risk, paying bills 30 or more days late can have a serious effect on your credit.
How to avoid it: Do whatever is necessary to avoid being late on payments. If you are forgetful, set up reminders on your phone or computer. If you spend too much, tighten your belt so you’ll have the cash to make your payment.
How to fix it: If you paid a bill late, contact your lender to get its policy on reporting late payments. Unfortunately, if the lender has already reported the late payment, you probably won’t be able to get it removed from your credit report. You’ll just have to make sure all future payments are made on time.
Keeping too many credit cards open at one time can be problematic, even if you pay each of them off monthly. “Having too many cards can negatively impact both your credit score and your ability to borrow money,” said Julie Pukas, head of commercial product integration at TD Bank. Even if you don’t use all your available credit, lenders might wonder what would happen if you did max out your cards.
How to avoid it: “Having three to five credit cards is usually not a problem,” Pukas said. “But if you find your credit card balances are increasing, that’s a danger signal.” She advised limiting the amount of available credit you have at any one time.
How to fix it: If your ratio gets too high, consider closing one of your newer credit accounts to keep your utilization ratio low and your credit history long.
After payment history, the amount you owe is the second-most-important factor in your credit score, according to myFICO, the consumer division of FICO. Owing money doesn’t necessarily lower your score, but using a high percentage of your available credit can.
Remember that a high credit utilization ratio can hurt your credit score and make lenders think you’re a high-risk borrower. Consumers with the best credit scores use 10% or less of their available credit, Kelly said.
How to avoid it: “There is no absolute ‘right’ answer to how much of your credit limit you should be utilizing,” Pukas said. “What’s more important to note is that, if you’re carrying balances on credit cards that exceed 50% of the available credit, then you’re hurting your credit score.”
How to fix it: “Strive to get your total credit utilization under 50% first and then keep going,” Pukas said. “This is one of the fastest ways to increase your credit score.”
Lenders like to see a long history of responsible credit use, and if you don’t have a card, you might not have much information to show. Although it seems counterintuitive, not having any credit cards can actually hurt your credit score as much as having too many.
You might be cheering if you’ve paid off your mortgage or other loans and buy things only with cash now. But if you apply for a home loan, you might find that you can’t get a loan because you’ve stopped using credit, Kelly said. If you think you’ll be applying for credit at any point in the future, you need to continue using credit to show recent activity on your credit report.
How to avoid it: If you don’t want to open your own credit card account, consider asking a friend or family member to add you as an authorized user. You won’t have to use the card for it to benefit your credit score — you’ll simply piggyback off the good credit habits of someone else. Having a credit card can benefit your credit, Kelly said, because your score is based, in part, on how many types of credit you have and how well you manage those accounts.
How to fix it: Becoming an authorized user on someone else’s card can also help you repair credit mistakes. Just make sure the person who adds you to a credit account is a responsible borrower. After all, their bad borrowing behavior can also show up on your credit report.
Although it’s smart to limit the number of credit cards you have at any given time, Pukas noted that closing old or inactive cards can come back to haunt your credit score. “The length of your credit history affects 15% of your score,” she said. “This is why it’s important not to close credit card accounts that you have had for years.”
How to avoid it: Strive to keep older credit cards active by using them sparingly — once every few months — and paying off the balances on time.
How to fix it: If you don’t trust yourself not to rack up debt on those cards, “consider canceling newer accounts rather than old ones, so that the length of your credit history is not impacted,” Pukas said.
Even though your credit card issuer checked your credit when you applied for your card, it will likely check it again if you ask for a higher credit limit. This could be reported as a credit inquiry, which could affect your score, said Gerri Detweiler, a credit expert and education director for Nav, which helps business owners manage their credit.
How to avoid it: If at all possible, try to spend well within your current credit limit. That way, you won’t put your credit at risk.
How to fix it: This doesn’t mean you shouldn’t ask for a higher limit — especially if you’re responsible with credit and don’t plan to charge your card to the max. But you should think twice about doing so before applying for a mortgage or other loan.
If you owe money on several credit cards, you might be tempted to consolidate debt by transferring all the balances to one new card. But that can be a mistake. Not only can this lower the average age of your credit history, especially if you choose to close out the other cards, but it can also increase your debt-to-credit ratio.
How to avoid it: To keep your score from dropping, make sure the debt you consolidate doesn’t exceed 50% of the available credit on the new card.
How to fix it: Charge purchases to a few different credit cards and keep the debt-to-credit ratios of each below roughly 20%. According to the credit reporting agency Experian, individuals with consolidated debt might want to consult a nonprofit credit counseling company about participating in a debt management plan.
Paying down high balances can help improve your credit score. But if you pay down all of your balances at once, your score could take a hit, said credit expert John Ulzheimer, formerly of FICO.
“This one is a bit tricky, but sometimes consumers will wind up with no activity on any card, and they see their scores go down,” Detweiler said.
How to avoid it: FICO wants to see recent activity on revolving accounts, such as credit cards. If you don’t have any utilization, your score can be affected. The impact is small, though, Detweiler said.
How to fix it: If you decide not to close credit accounts to keep your credit utilization ratio low, don’t shove those cards in a drawer and never use them again. “If you use them, it can help your credit because it’s showing activity on an account,” Kelly said. She rotates the cards she uses to keep them all active and pays the balances to avoid racking up interest.
You have to be careful about which card you use when making big purchases. For example, if you buy a $1,000 television using a retailer’s card with a $1,000 limit, “you’ve just maxed out your card,” Ulzheimer said. If you put it on another card with a $30,000 limit and low utilization, it wouldn’t impact your score, he said.
But by using all of the available credit on one card — especially if it’s your only card — your credit score could drop 50 points or more, Ulzheimer said.
How to avoid it: Make sure, if you have a choice of cards, that you use one that won’t be maxed out. And don’t apply for a retailer’s card just to get a discount if the limit on that card will be close to the amount you’re charging.
How to fix it: Bring your account balance down below the 50% threshold as soon as possible.
Co-signing for family or friends on their credit cards, car loans, residential leases and cellphone plans can be a quick way to ruin strong credit scores, said Ian Atkins, general manager at Fit Small Business.
“This can impact you negatively in two ways,” Atkins said. “First, that debt obligation can immediately show up on your credit report, and the higher debt load can impact your credit score. Second, if your friend or family member doesn’t make their payments, those missed payments will show up on your credit report. If the account eventually goes to collections, that too will show up on your credit report.”
How to avoid it: “You should be very careful when co-signing for friends or family,” said Atkins. If you do co-sign, make sure you can cover the monthly payments if necessary, he said. Also, closely monitor the account to make sure no missed payments occur.
How to fix it: If you co-signed on another borrower’s debt and it’s having a negative impact on your credit, try to get the other person to refinance the debt in their name only. If that’s not an option, you might need to suck it up and take over the payments. It’s a painful lesson, but you won’t soon forget why, in most cases, you should never co-sign on debt.
Your credit “mix” refers to the variety of credit types you have on your report and accounts for about 10% of your FICO score. When you only have one type of credit on your report — such as credit cards — it’s likely your score will suffer due to lack of information.
That doesn’t mean you need to open several accounts you won’t use. But Kelly said you should have at least one credit card and keep it active by using it to pay utility bills, gas or other regular expenses — and then pay it in full each month. Also, consider getting a rewards card so you can earn cash back or points for free travel.
How to avoid it: The ideal credit mix varies, but a healthy balance might feature a credit card, a student loan, a mortgage and a line of credit. This diversity of credit shows lenders you can manage several different types of credit in a responsible way.
How to fix it: If you need to improve your credit mix, try diversifying the types of credit you have by adding a new type to your profile. Credit scores might dip when you first open a new line of credit, but they will rise again after about five regular payments, according to a CreditCards.com report.
Paying down your balances can improve your credit score. How much of an improvement you see depends on which debt you pay.
For example, you won’t see much of an increase in your score if you pay off an auto loan, Kelly said. That’s because the credit utilization on installment loans, such as car loans, isn’t weighed as heavily in credit scoring as your utilization of revolving credit.
How to avoid it: If you have a choice of which debt to tackle, “pay down credit cards first to boost your score,” Kelly said.
How to fix it: There isn’t harm done in paying off debt, just opportunities passed up. Pay off credit card debt at the next opportunity.
If you see a mistake on your credit report, you have to take steps to fix it — and follow up to make sure it’s remedied. Otherwise, the error will remain on your report and might hurt your credit score.
Contact the credit bureau that issued the report that contains the mistake and ask the bureau to investigate it, Kelly said. Also, send a letter to the credit issuer — such as the bank or credit card company — that provided the incorrect information to the credit bureau to let it know you’re disputing that information.
How to avoid it: It’s tough to avoid this situation — after all, a mistake is just that, an error. However, once you discover the mistake, jump on it right away.
How to fix it: Always check the accuracy of the information on your credit report. According to the Fair Credit Reporting Act, credit bureaus are required to correct or remove inaccurate information. Start by sending a letter to the lender and each of the three credit reporting agencies — Experian, Equifax and TransUnion — stating the date the payment was due and the date it was made. For best results, include all supporting documentation and an explanation of the error.
Multiple credit inquiries in a short period can have a long effect on your record. “Applying for credit too often is problematic for a variety of reasons,” Ulzheimer said.
For starters, unwanted inquiries will appear on your credit report or reports. “That’s where most people believe it ends,” Ulzheimer said. “But the real problem with applying for credit too often is adding a bunch of new accounts to your credit reports, which lowers the average age of your accounts. That metric is actually more valuable than the impact of inquiries.”
How to avoid it: The current credit scoring system allows consumers to shop for similar types of loans, such as auto financing, in a short period of time without the inquiries being reported as multiple applications.
How to fix it: As long as you manage current credit accounts well, your credit score should bounce back within three months of the last inquiry.
Negative records such as collection accounts and late payments typically remain on your credit report for up to seven years from the date of first delinquency, Pukas said. “Paying off the account sooner doesn’t mean it’s deleted from your credit report,” she said. “Instead, it’s listed as ‘paid.’”
How to avoid it: Paying your bills on time and keeping credit card balances low will help you maintain healthy credit records.
How to fix it: Unfortunately, it’s difficult to remove negative records from your credit report. “Of course, it’s smart to pay your debts, both to reduce the total amount of debt you owe and to show your willingness to repay your obligations,” Pukas said. “But expect the negative record to have some effect until it is purged from your report.”
Some cities now contact a collection agency when a parking ticket is not paid on time. A $35 expired-meter ticket can turn into a $500 problem that could plague your credit history for years.
How to avoid it: Feed that meter and pay all your parking tickets on time.
How to fix it: If your unpaid tickets have already gone to collections, you’ll have to deal with the agency in question to resolve the issue. Because collection agencies buy debt for pennies on the dollar, you can usually negotiate a lower price to mark the collection as paid. However, this doesn’t mean the information will come off your credit report — it can stay there for up to seven years.
In some cases, offering to pay a bill in full can prompt the agency to remove the debt from your credit report. If you want to go this route, draft a goodwill letter requesting that the lender remove the negative information.
Believe it or not, a $5 library fine can have a negative impact on your financial health. While many libraries overlook these small fees, some cash-strapped institutions send overdue book fines to collections.
How to avoid it: Many libraries offer e-book rentals straight from their websites. With e-books, you won’t have to worry about turning books in on time. If you still prefer to check out traditional books, set a reminder on your phone so you know when it’s time to return your loaners.
How to fix it: If your library fines go to a collection agency, they might show up on your credit report. Your best bet to fix this credit mistake is to pay the collection agency and send a letter to the library begging forgiveness and asking it to remove the item from your credit report.
Judgments are issues of public record that show up on your credit report and that can lower your overall score. Unfortunately, these debts can be tough to resolve.
How to avoid it: Of course, the best way to avoid court judgments is to pay bills on time. If the debt was settled long ago but is still on your credit report, consider contacting the court in question to confirm that it has updated the records.
How to fix it: Generally, consumers need to take their cases to an appeals court if they want to reverse judgments. “Judgments can remain on your credit reports for seven years from the date the judgment was filed,” Ulzheimer said. “Even paying a judgment won’t cause it to be removed. The only legitimate way to get a judgment removed is if it is vacated.”
Paying your rent on time might not help your credit score, but paying it late can certainly hurt. If your landlord grows frustrated with your late payments, they can report you to the credit bureaus.
How to avoid it: Some landlords allow tenants to pay half their rent on the first day of the month and the other half on the 15th day. This type of arrangement can help you avoid paying a huge bill at the top of the month.
How to fix it: To avoid the bad habit of paying rent late, ask your landlord if you can change the due date. Choosing a date closer to payday can make it easier to meet your obligations. If the building owner won’t work with you, find more affordable housing, get a roommate or even land a side job to increase your income.
Medical debt can remain on your credit report for seven years from the date the medical debt originally went into default, Ulzheimer said. “The good news, however, is that medical collections that have a zero balance are not considered by FICO and VantageScore’s newest scoring models,” he said.
How to avoid it: While you can’t prevent medical issues from occurring, you can take steps to prevent them from impacting your scores. Anywhere from 50% to 80% of medical bills have errors, according to U.S. News & World Report. If you receive a high medical bill in the mail, take the time to review the information and identify any mistakes. If your bill is accurate and you can’t afford to pay, try negotiating the balance with a medical billing manager. Or ask the hospital if it offers a financial assistance program.
How to fix it: Talk to your insurance company. “Medical debt that is in collections might eventually have to come off your credit report if it has been paid or is being paid by your insurance,” said Ulzheimer. “This is the result of a settlement agreement between the credit reporting agencies and the attorneys general from 32 states.”
If you don’t pay your taxes, the issue isn’t just between you and the government. When you owe back taxes, the government can place a tax lien on your property, an act that lowers your credit score.
How to avoid it: To avoid taking a credit hit and encountering hefty fees, file your taxes on time each year. If you can’t afford to pay the balance, work with the IRS to set up a monthly payment plan.
How to fix it: If the tax deadline is approaching and you have yet to submit tax information, consider filing for an extension. You can also work with a tax professional to repay back taxes before they affect your credit score.
In an update to credit reporting coming from the National Consumer Assistance Plan, an initiative that was formed by the three major credit reporting bureaus has removed most tax liens from consumers credit reports. This change comes from NCAP’s push to have public record data meet certain criteria for it to appear on your credit report. You can still receive a tax lien, only now standards will be fairer to your credit report.
23. You Fail To Build Your Own Credit After Marriage
Consumers often neglect to consider the ways in which a spouse’s credit behavior could affect their own scores. Individuals maintain separate credit reports after marriage. However, if you and your partner share one or more joint accounts, any delinquencies are likely to impact both of you. Additionally, couples often make the mistake of relying too heavily on one partner’s good credit score.
How to avoid it: If one spouse has better credit, the other might be inclined to let that person take on all the debt. However, borrowing money in only one partner’s name can leave the other spouse with a flimsy credit history that limits that person’s ability to secure loans after a death or divorce. For this reason, it’s important that both spouses take on some amount of debt.
How to fix it: If your credit history is on the light side, consider taking out a credit card or loan in your name and making dutiful payments. Additionally, newly married spouses who change their last names should review their credit records to ensure all information is transferred accurately.
24. You Think a Divorce Decree Eliminates Your Debt
You might reach an agreement with your ex-spouse in your divorce settlement that he or she is supposed to pay off joint account balances. However, if your name is still on the account and it doesn’t get paid, your credit score could take a hit in divorce. “As far as your credit, that divorce decree removes nothing,” Kelly said.
How to avoid it: During a divorce, pull your credit report, highlight any joint credit accounts and, if possible, remove your name from the ones that your spouse has agreed to pay, Kelly said.
How to fix it: Continue to check joint accounts to make sure your ex is paying bills on time.
If you miss several payments, your debt could be turned over to a collection agency. You might even have a debt in collection you’re unaware of, such as an old utility bill that wasn’t paid when you moved. If that collection account is reported, your credit score could tumble.
“I have seen it drop in a credit score 75 points for one collection,” Kelly said. A collection account will stay on your report for seven years, even if you pay it off.
How to avoid it: Make payments on time, or reach out to the debt-holders for repayment assistance.
How to fix it: If you do get a letter from a collection agency for a debt you owe, try to pay what you owe as soon as possible so that it’s less likely to be reported. And check your credit report to make sure you don’t have any debts in collection that need to be paid.
When a debt goes unpaid for a long time, the company that reported the unpaid bill might mark it as a charge-off, thereby indicating it was unable to collect the debt. Like other debts, charge-offs can have a negative impact on your credit score.
How to avoid it: Most debt types don’t get marked as charge-offs until they are four to six months late, according to Detweiler. If you have any outstanding debts, pay them quickly to avoid this kind of mark on your credit report.
How to fix it: Unfortunately, paying a charge-off doesn’t make the information disappear from your credit report. The item will stay on your record for up to seven years after it gets reported.
Along with suffering the pain and stress of losing a home, people who experience foreclosure will likely see their credit scores drop. How much your score falls depends on your credit history prior to the foreclosure and other factors. However, the effects of foreclosure can stay on your credit report for up to seven years from the filing date.
How to avoid it: If you’re having a hard time paying the mortgage, call your lender right away. Or you might get help through your state’s housing agency. Consumers should beware of foreclosure scams and contact the Federal Trade Commission with questions.
How to fix it: Repairing your credit after a foreclosure is a slow process. While foreclosure isn’t as damaging as traditional bankruptcy, consumers should expect to have limited access to credit for several years. Use that time to pay bills regularly and keep credit card balances low.
Your credit score will drop significantly if you file for bankruptcy — 100 points or more, according to myFICO. Chapter 7 and 11 bankruptcies can stay on a credit report for up to 10 years.
If you do file for bankruptcy, you should check your credit report to make sure the accounts included in the bankruptcy show a balance of $0. Keep track of when you filed so you know when to expect the bankruptcy to fall off your report.
How to avoid it: If you can’t afford to make your monthly debt payments, call your creditors to see if you can negotiate a plan with smaller payments. This could help you avoid missing payments altogether and hurting your credit score.
How to fix it: You need to start reestablishing a credit history after bankruptcy, and choosing to avoid credit after a bankruptcy can backfire. “When you do nothing after a bankruptcy, the credit score stays low,” Kelly said. Instead, get a secured credit card — which will have a credit limit based on an amount you deposit with the credit issuer — to rebuild healthy credit, she said.
Renting a car with a debit card allows you to assume the risk of damage done to the car in case of an accident. Renting with a debit card will also subject you to paying for a deposit and renters insurance.
Using a credit card to rent a car will protect your liquid assets in the case of an accident. Some credit cards offer collision protection and towing charges just as a perk of having the card.
When delinquent child support payments go into debt collections or end up with a court judgment, your credit takes a huge blow.
Your score could have 100 points or more taken off your FICO score. If there is a court judgment made, you could also face repercussions like wage garnishments, withholding of tax refunds and a property lien to make sure the child support is paid.