August 30th, 2010
Review: BillFloat – Can’t Pay Your Bills? They Have you Covered (For A Fee)
It’s the 1st of the month and time to pay the bills. After unexpected medical bills or some other financial emergency bungled your budget earlier this month, you realize there’s a bill or two your funds can’t cover. What do you do? You float it.
BillFloat, founded in 2009 and incubated by PayPal, has a simple, fresh solution to an old problem—what to do when you can’t pay the bills.
Instead of turning to Mom and Dad, friends, expensive payday loans, high-interest bank loans, or skipping payment altogether and risking the consequences (penalties, credit damage, getting services terminated), BillFloat pays your bill for a fee as low as $4.99 and you pay them back within 30 days. Plus, the site requires no credit checks and uses its own “decisioning engine” to determine qualified customers.
August 27th, 2010
How to Protect Your Credit After Divorce
The end of a marriage is often associated with heartbreak and emotional upheaval, but your former soulmate could be walking away with half of your assets as well as leave you in a bad credit situation. Check out the ways to protect and rebuild your credit after a divorce.
June 24th, 2010
What is a thin file?
In the world of credit, thin is not a good thing. If you have a “thin file”, it means you have a limited or brief credit history or not enough credit accounts to generate a credit score.
Consumers with thin files often cannot pull their credit score or credit report, which also means that most lenders, issuers, and banks will reject thin file applications because they are unable to see the consumer’s credit report. Consumers with thin files are seen as credit risky and inexperienced with managing credit because they have a limited credit history.
If you face similar financial challenges because of your thin file, don’t give up just yet. Fattening up your thin file requires establishing credit and maintaining proper credit habits to build healthy credit. Here’s how to put some meat on your skinny credit:
May 25th, 2010
Bad News For Obama’s Foreclosure Relief Plan
Obama’s foreclosure prevention plan continues to disappoint as more than 122,000 trial mortgage modifications were canceled in April. The program was projected to provide help for 3 to 4 million homeowners at risk of foreclosure by placing them temporarily in trial modifications to assess if they were qualified for permanent assistance.
Administration officials state that the number of canceled trial modifications spiked last month likely because borrowers were allowed to enroll in the trial program by self-reporting their income, but were later dropped from the trial program once they couldn’t provide evidence of actual income. About 637,353 homeowners remain in the trial modification program, which determined if homeowners can keep up with lowered payments and to give lenders time to assess their eligibility for permanent modifications.
May 12th, 2010
How To Prepare For A Stock Market Meltdown
It was an episode as close to Armageddon as Wall Street can get: traders watched in shock last Thursday as the Dow Jones industrial average plummeted nearly 1,000 points and cut the value of all stocks by $1 trillion.
It was the biggest intraday point drop in Dow history. Some blame the growing debt crisis in Greece, a technical computer glitch, a mistyped trade, or maybe all three factors combined for the 20 minute panic that threatened a stock market collapse. But by the end of the day, the Dow Jones was only off about 350 points and closed at a miraculous 10,520.32, leaving traders’ heads spinning.
The sudden selling and the brief meltdown eerily reminiscent to the late 2008 collapse of Lehman Brothers, AIG, Fannie Mae, and Freddie Mac reminded consumers how vulnerable this economy remains, even with improving unemployment numbers and more confident consumer spending. As CNNMoney puts it, we “will not have financial wiggle room to address future economic weakness.”
While the federal government scrambles to handle its fiscal crisis, take your own precautions to prepare for another possible Armageddon knocking on our economy’s door.
- Invest in stable, solid stocks. Eschew high-risk stocks and be sure to invest in some stable stocks, like consumer staple and discretionary stocks from companies like Procter & Gamble and Mattel, that have established reputation, longer-term horizons, and stable earnings. The Street website suggests that staple and discretionary stocks should comprise 20% of one’s portfolio.
- Diversify your investments. Don’t put all your eggs in one basket and diversify your investments across different companies, industries, countries and asset classes. You’ll have a smoother ride when rolling with the ups and downs of the stock market because diversifying allows your investment performance to fluctuate less and offsets losses in some investments thanks to gains in others. One site suggests pursuing a diversified strategy with 3 types of assets: stocks for growth, bonds for income, and money market securities for safety and liquidity.
- Have more than one stream of income. Multiple streams of income offers broader financial security in the case of crisis. Should you lose your main job, you’ll still have money trickling in via a sideline job, profitable hobby, or freelance work that will tide you down until becoming full-time employed again. You won’t have to tap into your savings or retirement nest egg as much. Plus, you’ll be earning extra money to put towards an emergency fund, investments, or other valuable assets.
- An emergency fund! We’ve emphasized the importance of emergency funds so much that we wrote an entire article about how to build one. Don’t get caught off-guard when financial emergencies happen—have an emergency fund to back you up that can last you 3 to 6 months of your normal living expenses.
- A killer credit score. Build and maintain a killer credit score and, no matter what the economic conditions, you’ll be getting the best interest rates, credit card offers, and loan terms. A few percentage points difference on a bank loan or mortgage saves you hundreds or thousands of dollars over the life of the loan.
The next stock market meltdown doesn’t have to deplete your investments or ruin your financial future; always be fiscally responsible about where you put your money and how you manage your finances.
April 12th, 2010
Dear Credit Karma… Identity Theft
Dear Credit Karma,
I just found out today that I am a victim of identity theft. I have at least one bad debt incurred by the identity thief on my credit report. How can I find out if this person is still using my I.D.? How can I get this bad debt removed from my report? What will all of this do to my credit score? I look forward to your help.
Identity theft is a terrible crime that causes considerable stress, time, and financial trouble to one in every
twenty Americans a year; but take heart, there are ways for you to fight back if you are a victim as well as preventative measures to make you less vulnerable to identity thieves.
If you’ve already been targeted and had fraud committed on your credit card, bank account, or other financial accounts, take these steps immediately and quickly to minimize damage as much as possible…
April 8th, 2010
Lenders & Housing Agencies Offer Mortgage Protection Plan to Unemployed Homeowners
Insurance plans to provide mortgage assistance to underwater borrowers who recently lost their job are becoming more prevalent. unemployed borrowers’ mortgages for up to 6 months. It’s called mortgage insurance, and it can provide assistance for unemployed borrowers’ mortgages for up to 6 months. It’s the kind of much-needed help the housing market needs, especially in the case of unemployed homeowners struggling to avoid foreclosure, and also provides a safety net for a homeowner’s peace of mind in the midst of financial crisis.
With the unemployment rate steadying around 10% and foreclosures around the corner for millions of troubled Americans, job-loss mortgage insurance is now available from traditional insurers, homebuilders, banks, real-estate agencies, realty groups, and local housing agencies.than ever before. Mortgage protection like this, as well as similar aid from the federal government and even credit card issuers, is helping calm would-be homeowners’ nerves about buying homes in a speculative housing market. However, policies vary significantly, so be sure to select a provider that provides the best fit for your needs.
February 19th, 2010
The Case for Walking Away From Your Mortgage
“Strategically defaulting” and walking away from your home is becoming less taboo and more mainstream as the 2009 housing collapse left 10.7 million families underwater on their mortgages– meaning they owe more on their mortgages than their homes are worth. With an additional 6.7 million estimated homes expected to be underwater by the end of 2010, homeowners face a very difficult question– to pay or to walk away.
When It Makes Financial Sense
Let’s say you took out a mortgage in 2002 for a $600,000 home that is now worth only $300,000. Depending on how home values fluctuate, it could be decades before your home returns to the sales price you started paying on years ago. You can sit back, enjoy the home, and pay off your mortgage as planned, but you may be left with a home valued at less than what you paid. On the other hand, you could walk away from your mortgage and rent a similar home for less than your current monthly mortgage payments. This could save you thousands of dollars a year, and hundreds of thousands over the life of your mortgage.
February 11th, 2010
Protect Your Credit Score From Medical Bill Disasters
One in six adults, about 46 million people, in the U.S. are living without health care coverage. For uninsured and insured Americans alike, a sudden medical emergency and its accompanying bills can land a huge blow to one’s bank account and possibly their credit score. In fact, medical costs remain the leading cause of bankruptcy in the United States. Here’s how to plan ahead and responsibly manage medical costs should you come up against a medical emergency.
January 25th, 2010
Big Banks and Credit Card Issuers Lend a Hand In Haiti Relief Efforts
Opening your heart and your wallet to relief efforts in earthquake-ravaged Haiti can be done by credit card, text message, and even through your iPhone thanks to companies’ innovative charity campaigns. Credit card issuers and banks have been particularly active in supporting Haiti relief efforts, with nearly every major financial company–from JPMorgan Chase to Goldman Sachs– facilitating donation programs or pledging donations themselves.
After media outcry criticizing credit card companies for taking a cut of “transaction fees” from cardholders’ charitable donations to Haiti relief efforts, American Express, Visa, Discover, MasterCard, and others have waived transaction fees for donations to charities. All of the familiar names in the financial sector are also contributing to the cause: Goldman Sachs, JPMorgan Chase, and Morgan Stanley are donating $1 million to the Red Cross and other charities; Citigroup, which has a branch in Part-au-Prince, Haiti, is donating $2 million plus supplies; Jefferies Group, an investment bank, donated a day’s worth of trading commissions totaling $5 million, and topped it off with an additional $1 million donation from the bank itself.
If you want to contribute personally to recovery and rebuilding efforts in Haiti, consider the following company initiatives committed to lending a helping hand:
- Discover cardholders can donate their CashBack bonus points to the American Red Cross, in addition to donating directly to select charities minus transaction fees. Discover is also matching cardholder donations dollar-for-dollar, plus an initial $100,000 company contribution. This is your opportunity to convert cashback bonuses from a shopping spree into a life-saving donation.
- In addition to waiving transaction fees, Bank of America is allowing consumers to make donations at their bank locations. Whether you show up at a BofA branch or donate via credit card, 100% of your money will be given directly to the charity of your choice. Bank of America has also committed $1 million to relief charities and pledges to match donations made through the Matching Gifts program, with no cap to their overall contribution.
- Take 30 seconds to contribute $10 to the Red Cross by texting “Haiti” to 90999 (charge will be added to your monthly cell phone bill). This successful “mobile giving” texting campaign has spread through social media networks Facebook and Twitter like wildfire, raising $10 million in its first week. Yele Haiti Earthquake Fund is another texting campaign, just text “YELE” to 501501 to donate $5. It’s such a simple and easy way to do your part to help out in Haiti.
- Gamers can contribute too by playing video games online or via iPhone. AppRelief features iPhone apps that will donate 100% of profits to the Red Cross. Also, video game website IGN is hosting a Haiti Charity Event webathon on Jan 27; tune in to donate to Habitat for Humanity or bid in a charity auction while getting your fill of video game entertainment.
- Several airlines, hotel chains, and businesses in the travel industry have come up with creative ways for customers to support Haiti relief efforts by donating airline miles, hotel loyalty points, or supporting travel companies that will do charitable donations on consumers’ behalf. Check out this Los Angeles Times blog post for a list of participating companies.
Whether you charge a donation to your credit card or text to a charity, please take advantage of these humanitarian opportunities to support relief efforts in Haiti by contributing and spreading the word.
At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!
