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MEDIA CENTER

The Money Minute - November 2014

In this Issue 


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Holiday Tips: Credit Do's and Don'ts

Apprisen wants to empower you with the knowledge you need to have a fulfilling holiday season without damaging your credit score. Here are some Do's & Don'ts to help you avoid just that.

 

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Don't Fall For These Mortgage Assistance Myths

In the euphoria of purchasing a home, it’s hard to believe that anything could happen to make you miss a payment on that dream come true, but all too frequently a job loss, divorce, or medical issue happens and you are faced with possibly not being able to pay.

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 Worried about Finances

What Are Your Financial Fears and How Are You Dealing With Them?

The NFCC recently released the results of a poll in which they asked Americans if they had any financial fears and the results were telling: 71% of respondents admit to having financial worries.

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It's Your Money. Do You Need Help Taking Control of It?

Have you reached the point where you need help getting your finances on track? Many people do and it's usually through no fault of their own. If you are thinking about seeking guidance from a credit counseling agency, you should know the signs of a good company.

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Holiday Tips: Credit Do's and Don'ts

Apprisen wants to empower you with the knowledge you need to have a fulfilling holiday season without damaging your credit score. Here are some Do’s & Don’ts to help you avoid just that.

Do's

If you have planned for the holidays by saving all year, great! But paying with cash won’t help improve your credit score. Use your credit card to make the initial purchase, and then pay off the card in full with savings to avoid paying interest.  This will help improve your credit score. The key is to be disciplined to pay off the card right after the purchase.

Haven’t opted out yet?  Now is the time. Soon card issuers will be sending “pre-approved” credit offers. You could receive offers in the mail. Multiple offers in your mailbox increase your risk of Identity Theft and tempt you to open and use credit you really don’t need. You will have to pay it back with interest unless paid off in full right away. Call 1-888-5-OPTOUT (1-888-567-8688) to opt-out of getting pre-approved credit offers.

Be aware of your credit card limits. Did you know that if your balance goes over 30% to 35% of your available limit, you start to negatively impact your credit score? Know your limits and calculate 35% of the limit. You should set this as the maximum amount you can spend on that card. Put a post-it note on the card to remind yourself.

Don'ts

When the store says you can get a percentage off your purchase for applying for a card, understand that every time you apply for credit it lowers your score. Don’t open a credit card unless it is a store you shop at frequently and preferably will receive benefits from the card such as coupons, % off with every card purchase, or cash back, etc. Department store credit cards typically have higher interest rates.

Don’t open a card just for the holidays, pay it off, and then close it. A part of your score is based on length of history. It is better to not open an account than to open one and then close it immediately.

Credit cards are revolving lines of credit; they should not be used like an installment loan. Maxing out the available limit and then paying it off over time through minimum payments only negatively impacts your “credit utilization” and you will end up paying back much more with added interest.

If you weren’t financially prepared for this holiday season, start early and make sure the 2015 Holidays are stress free!
 

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Don't Fall For These Mortgage Assistance Myths

In the euphoria of purchasing a home, it’s hard to believe that anything could happen to make you miss a payment on that dream come true, but all too frequently a job loss, divorce, or medical issue happens and you are faced with possibly not being able to pay. I often see people who wonder what to do and have fallen for many of the myths out there. Here are a few of the most common:

I have to be behind on my mortgage before they can help.
This is the one we hear most often, and it is NOT true.  While there are a few options that require delinquency, there are many more that do not. The popular Making Home Affordable Program does not require delinquency, and in fact the “little known way to pay off your mortgage” that’s making the rounds on the internet refers to the Home Affordable Refinance Program which requires your mortgage to have NOT been behind in the last 12 months.

I have had a job loss (or divorce, or a specific hardship), surely there is something that I qualify for to help!
While it is true that you must have a hardship to qualify for most programs, that is rarely a sufficient qualification alone. Generally, there has to be a financial hardship where your mortgage is now taking up a large portion of your income and your budget must be able to support the modified payment amount. A HUD-certified counselor can help review you for options or you can contact your mortgage company directly to see which option may suit your situation best. 

A modification will drastically reduce my mortgage payment.
While many people do find this to be true, the primary point of a modification is to take the amount you are behind and put it back into the balance, thus catching up the loan without you having to pay it all at once (or have a fantastic credit score to refinance). The payment amount is generally based on your income so it may go down, stay the same, or even go up slightly. 

My mortgage company will keep me up-to-date on what’s happening with my assistance request.
It is true that most companies and representatives will try to contact you once a week or so during the request process, but they are not always allowed to leave messages. So, if they need something and they miss you, you may never know unless you contact them yourself.  Make it a point to call weekly to check on the status of your request or have the HUD counselor “tag team” this with you. I firmly believe that tenacity is the single biggest factor in assistance approvals!

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    What Are Your Financial Fears and How Are You Dealing With Them?

    The NFCC recently released the results of a poll in which they asked Americans if they had any financial fears and the results were telling: 71% of respondents admit to having financial worries.

    Sharing the to spot on the list are concerns about a lack of savings, equally divided between not enough savings for everyday emergencies (16%), and not enough money for retirement (16%).

Other top worries include the following:

  • Not surprisingly,  fears related to either losing a job or not being able to find a good-paying job was second on the worry list (13%).
  • Worries associated with debt held the third spot (7%), and included concerns about not being able to pay credit card debt, student loan debt, a monthly vehicle payment or existing medical debt.
  • Four percent of respondents worry about not being able to afford health insurance. Four percent also have concerns about their credit score and access to credit.
  • Rounding out the list were fears that their personal financial situation is out of control, not being able to afford to send children to college, not having a good overall understanding of personal finance, losing a home to foreclosure and potentially having to file bankruptcy.

Admitting financial fears is the first step toward resolving them. The next step is taking action to resolve the problem. I would like to know what you are doing to address your financial fears. Are you going to cut back on your spending? Are you planning to increase your income? Are you thinking about reducing your debt?

If you need help, Apprisen’s certified financial counselors can help you create a plan to reduce your financial fears. Give them a call at 1-800-355-2227 or visit www.apprisen.com.  

It's Your Money. Do You Need Help Taking Control of It?

Have you reached the point where you need help getting your finances on track? Many people do and it's usually through no fault of their own. If you are thinking about seeking guidance from a credit counseling agency, you should know the signs of a good company.

  1. Select counseling with a long track record. A company that has longevity is more stable and has employees with the experience you need.
  2. The agency you choose should be a non-profit 501©3 IRS designated agency. A non-profit is more likely to have lower fees and put more of that money back into services for its client and community.
  3. Your credit counseling agency should be a member of and subscribe to the standards of the National Foundation for Credit Counseling (NFCC) and accredited by an independent third party organization. Both of these organizations hold credit counseling agencies to high standards. Your credit counseling agency should also be HUD certified to provide housing counseling.
  4. Find an agency that has a clean record. You can check with your local Better Business Bureau (BBB) or with your state’s Attorneys General’s Office. Check to see that your agency is a member of the BBB and the local chamber of commerce where it has locations.
  5. Your credit counseling should only use certified financial counselors. The certification process ensures that your counselor has proven that they have the knowledge to tackle your issues accurately and thoroughly. While you are looking, take the time to verify the agency is licensed to do business in your state.
  6. The best credit counseling agencies will offer a variety of personal finance educational opportunities like workshops, seminars, and online webinars.
  7. Look for a credit counseling agency with physical locations. Chances are that you will want the convenience of being counseled online or over the phone. However, agencies that have physical offices show their commitment to the communities they serve.
  8. The credit counseling agency you choose should offer a variety of services. Good credit counseling agencies should be able to help you with a variety of needs including; financial counseling, housing counseling, bankruptcy counseling, debt management, and more.
  9. You want an agency that thoroughly reviews your financial situation. Your first financial counseling session should last about an hour and should review your personal finances in depth. You should be provided with a personalized plan and options for moving forward.

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