Kristy's Blog

Color Dilution Alopecia.

So my dachshund Hedi is a blue dapple dachshund who was born Aug 8, 2020. She weighs 12 lbs.

I noticed about 4 weeks ago that she had a bald sot on the back of her head and was losing hair on her back at the top back. I took her to the vet, who performed a skin scaping to detect mites and then did blood work to look at her thyroid. Blood work came back normal and she had so mites. The vet suggested 3 mg of Melatonin A it caN help.

That led me to do some research. The research I found was to do 3 mg melatonin, 1 tab apple cider vingear, two capsules Vitamin A and 1 omegas (3-6-9). So I started her on June 12. Here are the photos:

Jun 12

Here is the regimine I’m following created for a silver lab. Gunner’s regimine.

My breeder, Kaibab Dachshunds, also suggested melatonin and Omegas. She said her sister-in-law had a dachshund with CDA, gave her the melatonin and Omegas and all the hair grew back.

Here are Jun 26th photos:

And today Tail doesn’t look too good, but back looks really good:

If you notice, the hair is lighter.

Just the other day I was talking to a friend of mine who had gone through a very messy divorce which ultimately caused her to file for bankruptcy. She lost everything and was basically starting from square one when it came to credit and improving her credit score. She asked my advice on applying for a credit card with bad credit and steps to take to increase her FICO score. The first suggestion that came to mind was applying for a secured credit card but the downside of that is that all these types of cards do not offer a 3 bureau credit reporting – which does not help when you are trying to improve your credit score. So, I suggested becoming an authorized user on someone else’s credit card. To that suggestion came a blank look – she had no idea what an authorized user was. And, my friend did not fully understand how and if being an authorized user would affect a credit score and the positive and negative aspects of this type of credit rebuilding. I am sure my friend is not alone in understanding the nuances of the authorized users. So, let’s dive in to the definition of an authorized user and the positive and negative affects being an authorized user can have on one’s credit score.

What exactly is an authorized user?

An authorized user is someone who has their name on a credit card but they are not the primary credit card account holder. For example – you are a student going away to college and your parents give you a credit card to use for emergency expenses. The card has your name on it but it is your parent’s credit card account. Your parents are liable for the balance owed on the account and they are responsible for making timely payments. You, the authorized user, are only able to make purchases with the card.

The account holder is the only one who can add an authorized user and they are the one who can ask for credit limit increases, make payments, and remove authorized users. The most common authorized user relationships are:

• Parent & Child
• Employer & Employee
• Couples

Most credit card issuers will allow you to add an authorized user very easily – over the phone, online, or with a paper application. Generally, all that is needed is their name, date of birth, and in some cases, their Social Security number. This is different from a joint cardholder or a co-signer because the card issuer does not pull the credit history of the user – so no credit check is done.

Generally, after a few months of becoming an authorized user on an account, the history associated with that account will show up on the user’s credit reports. It is a good idea to check your credit reports to make sure and if it does not show up, the account holder should call the bank and request the history to be reported on the user’s credit file. When this account is added, it will then be considered in the scoring system and measured alongside the other current accounts. The only exception to this is the new version of FICO 8 – the benefit of being an authorized user will be reduced if FICO thinks you are being added to a stranger’s account simply to increase your score. Therefore, it is important to have some type of relationship with the person who’s account you are becoming an authorized user on.

How being an authorized user can positively affect your credit score.

Now that we understand WHAT an authorized user is, we can get into WHY someone would want to be an authorized user on an account. The most common reason is to improve one’s credit score and build up their credit history. If you are trying to get into the fair to good credit score range, the two most important areas to focus on are payment history and amounts owed – which makes up 65 percent of your FICO score. That means, you want to become an authorized user on an account which has a stellar payment history and is not maxed out or close to it.

So, let me get back to my friend – I suggested she ask her parents (who are retired and living comfortably) to become an authorized user on one of their credit card accounts. One they have had for a while, with an excellent payment history, and a low balance owed. This type of account should boost up her credit score with these good aspects.

Keep in mind there are many credit scoring models used by lenders to evaluate everything from car loans to mortgages. And not all consider authorized users the same way. So, the best rule of thumb to follow if you want to increase your score, is to find an account that has a good payment history, low balance, and has been open for good length of time. After a few months of becoming an authorized user on this account, check your credit scores to see if this account has positively affected your credit score.

How being an authorized user can negatively affect your credit score.

There is also a dark side to becoming an authorized user and circumstances where it can negatively affect your credit score. The best way to explore this is by way of example. Let’s say my friend goes to her brother and becomes an authorized user on one of his credit cards. Everything is going good for the first year but then her brother starts overspending and maxes out the credit card and then cannot afford to make the monthly payments. So, not only are there late payments on this account, but the credit utilization is at 100 percent. At no fault of my friend, her dream of an improving credit score just went down the drain.

Being an authorized user on an account where the primary account holder is not making payments on time or maxed out the card, can negatively affect your credit score. The best advice when this happens is to have your name removed from the account by the account holder immediately. If the damage to your credit is not too terrible, you can apply for your own credit card. Or, you might be forced into having to get a credit card with bad credit – like a secured credit card.

This type of unique financial relationship has its pros and cons when rebuilding credit history and improving credit scores. It offers someone who is trying to increase their score a way to piggyback a good trade line on to their own credit reports. As with anything having to do with credit repair, make sure you understand how becoming an authorized user on someone’s credit card account can help or hurt your credit score. Make sure to have an open dialogue with the primary card holder regarding the arrangement and always have an exit strategy if it all goes south.

Even though it’s a crime to exaggerate your income on credit card applications or loan paperwork, many people are tempted to do just that so they can obtain the best credit terms possible. But just how do credit card issuers verify a potential borrowers income? Interestingly enough, credit card issuers do not directly verify your income before opening a credit account for you. This practice stands in stark contrast to lenders that issue home mortgages or car loans that do check to ensure that your income is the amount you stated on your application.

While credit card companies will take you at your word in terms of the income you state on your application, they do verify that your income is consistent with all of the other financial data you reported on your application. Income is indirectly inferred from entries like reported car payments or mortgage payments.

Not All Credit Cards Are Created Equal

One notable exception to the general credit verification practices of almost every other credit card is how American Express will periodically review the finances of its cardholders. When this happens, all of the consumer’s AmEx accounts are temporarily suspended and AmEx requires that person to grant the company access to their tax returns, which allows them to directly verify your income. After they’ve completed their review, and found that the consumer’s income is the amount that was reported, then all accounts are re-activated.

In cases where a consumer has generated a considerable amount of debt and is late making a payment, a credit card company may ask that consumer to verify their income.

What Can You Do To Make Your Income Look Larger?

Even though you must be honest about reporting the size of your income, most credit card companies have fairly broad criteria as to what constitutes income. You can use the salary from your job of course, but did you know that you can use investment income, income from rental properties, federal and state benefit payments, freelance income, alimony, and child support as part of your income. So, if you have a full or a part-time job, and you’re getting Social Security, you can combine those amounts to pump up the amount of income you can report.

In addition to the income streams stated above, the provisions of the Consumer Financial Protection Bureau (CFPB) allow consumers to combine their income with that of their spouse or domestic partner so long as they are actually sharing expenses such as credit card payments.

Why Honesty Is The Best Policy When It Comes To Reporting Income

Most Americans are taught from childhood that it’s always best to tell the truth, and that lying is wrong. As the old saying goes, “you can’t cheat an honest man.” Honest people also don’t have to worry when a lender or the IRS vets their finances. Remember that lying on financial forms is a form of fraud that can you get you fined with fines up to seven figures (!), or even be sentenced to jail time (up to 30 years). People have been convicted of lying on credit card forms to obtain high credit limits that they were subsequently unable to pay off. One extreme case in 2012, involved a New York resident named David P. Gaylord, who falsely stated his income at between $90,00 and $122,000 per year on credit card applications, while simultaneously telling the IRS that he only made $12, 488 in 2006. Gaylord wound up running up thousands of dollars in charges that he was unable to repay, and declared bankruptcy. When the FBI finally caught up with Gaylord, he was given a sentence of time served, with an additional five years of supervised release. Plus, Gaylord had to pay a whopping $46, 914.73 in restitution.

Consider Your Debt-To-Income Ratio

Given the example cited above, you can see why it’s always the best idea to be honest about your stated income. Remember that one of the things that all credit card issuers look at is your debt-to-income ratio, which should be about 36% or less, if you want to be considered a good credit risk. However, if your income isn’t that spectacular and you’re worried about your income stream looking good on a credit card application, there are some things you can do.

• Pay down existing credit card accounts, not just your cards with revolving accounts, but any card that shows an outstanding balance. These amounts will be reported on your credit report as debts.
• If you are applying for an additional card with a company that you already have an account with, it’s doubly important to pay down as much existing debt as possible. As soon you do that, it will have a favorable effect on your credit picture with that company.
• If the company denies you additional credit, you can always contact them and negotiate. Ask them if they will close one of your other accounts, or transfer an existing balance to the new card you’re applying for. It never hurts to ask.

Things To Avoid On Your Credit Card Applications

Credit card companies may not always verify your income, but remember that they have a perfect right to do so. In order to avoid getting in trouble for providing false information on credit card applications, you should strenuously avoid the following actions:

• Inflating or distorting the amount of income you earn from any source, including jobs, investments, government payments, etc.
• Under-reporting your current rent or mortgage payments.
• Reporting that you’re gainfully employed when you’re not.
• Failing to accurately report how much debt you’re carrying. This one is easily verifiable and can quickly blow up in your face.
• Don’t under-report your income on your income tax returns. If you’re caught doing this, it will have serious repercussions. It’s simply not worth it to be a tax cheat.

You may think that your little white lies about how much you make or a credit card issuer won’t notice how much debt you’re carrying. It is expensive to carry out a full investigation of someone’s income, but if you’re applying for a significant amount of credit, the credit card company may actually go to the trouble of checking you out. Honesty really is the best policy, just in case your finances are fully vetted.

If you have a debt in collection, paying off those debts may not be very high on your priority list. A few basic internet searches will teach you how to force debt collectors to stop calling you and stop sending you payment demands and paying those collectors may no actually help your situation: the simple fact is that collection agencies don’t remove their trade lines from debtors’ credit reports after receiving payment. As a result, you may be unmotivated to pay the debt because it doesn’t directly benefit you: the credit agencies are leaving you alone and your credit scores remain unaffected.

There is no guarantee, however, that ignoring a collection agency will make it go away. If you don’t negotiate with a debt collector, you run the risk of being sued by the collection agency, however, not everyone who fails to pay gets sued. Collection agencies use a variety of different criteria when determining whether or not to sue a debtor.

The Age of Your Debt

One of the most crucial factors that could herald a lawsuit–even more so than a particularly high debt–is the age of the debt. Once your state’s statute of limitations for debt collection expires, debt collectors lose the ability to sue you for payment. Each state’s statute of limitations varies and can range from four years to fifteen years. The average statute of limitation is 6 years.

For debt collectors, lawsuits are a last resort, as suing costs money. Phone calls and letters are the cheap tactics in the collecting game. Debt collectors want to give you as much time as possible to pay the debt voluntarily. They may even try and get you to make partial payments since making a payment restarts the clock on the statute of limitations in most states – therefore extending the window in which they can sue you.

If the statute of limitations is rapidly approaching, however, and you have yet to make payment arrangements, beware. This is the time period during which a collection agency is most likely to sue you. You’re clearly unlikely to pay on your own, and soon the collector will lose the ability to take legal recourse. If it wants to recover the debt, a lawsuit is the company’s only viable option.

The Amount You Owe

The amount you owe to the collector plays a considerable role in whether or not you’re a ripe candidate for a lawsuit. In general, the more you owe, the greater your risk. Suing a consumer costs money, so if you only owe an amount less than $100, chances are you are not likely to be sued as the cost of the suit would not offset the monies that could be collected. However, low debt amounts are not a guarantee against a lawsuit. Some law firms specialize in low-cost lawsuits: they operate by filing suits in volume – generating the paperwork to initiate a suit plus the filing fee could be cheap enough that if enough lawsuits are filed, the net winnings could offset the cost of lawsuits that lose or cannot be collected on. In 90% of the cases, consumers do not show up to court, and the JDB wins the suit by default.

Who Owns Your Debt

Junk debt buyers often get lumped into the same category as debt collectors, but there are some differences, especially when it comes to getting sued.

A junk debt buyer (JDB) typically buys debt in bulk for pennies on the dollar, while a collection agency contracts with the original creditor to try and get the money from a debtor. Much of the debt a JDB buys is not likely to be collected, but the junk debt buyer pays for quantity, not quality. A junk debt buyer may only send out a few letters to each debtor as the total effort they will make to try and pick the low hanging fruit from the pile of debts they purchase. If they get no response, they may resell the debt to another JDB. However, junk debt buyers often run lawsuit mills where they literally file thousands of lawsuits all at once. If your collection agency is actually a junk debt buyer, you are more likely to be sued. How can you tell which is which? Do a search online – if there are numerous complaints about the qualify of the suits brought to consumers, they are more likely to be a junk debt buyer.

Your Financial Situation

As creditors, collection agencies can review your credit reports whenever they wish. If you’re a candidate for a lawsuit, debt collectors will closely review your other debts and whether you are paying them on time. They’ll also look into whether or not you’ve recently applied for any new debt. If you seem to have your financial house in order, collectors can safely assume that you have disposable income that the company can seize via a lawsuit. Others’ only income is exempt from seizure.

Your Personal Situation

In some cases, debt collectors will go a step beyond your financial situation and review your personal life This provides collection agencies with a wealth of information about your ability to pay–even if the information itself isn’t directly financial. If, for example, you’ve gotten married recently or gotten a new job, a debt collector may conclude that your household income has increased and, as a result, you have additional income with which to pay off your debt.

In Conclusion

Not every debtor gets sued. Each collection agency has different guidelines that dictate when a lawsuit is or is not an option. If, after considering the amount you owe, the age of the debt and your personal and financial situation you feel that you are at risk of facing a lawsuit from a collection agency, you may want to contact the company and attempt to negotiate a settlement. Remember, its always better to negotiate a settlement and pay voluntarily–even if it’s inconvenient–than it is to have your wages or bank accounts garnished as the result of a lawsuit.

One of the most popular questions asked about credit is “How many points will I lose/gain if X happens?” If you were trying to repair your credit, it would be good to know what “baddies” on your credit report are doing the most damage and target those items first. Unfortunately, it’s not possible to absolute number, as the credit-scoring model is both a secret and takes into account many other things on your profile besides the occurrence of a single event. However, it’s possible to deduce approximate losses and gains from the various articles and press releases that FICO has put out over the year.
The credit-scoring model is based on 5 factors:

1. Your payment history
2. Your revolving account balances
3. The average age of your credit accounts
4. Your mix of credit
5. How much new credit you have.

First of all, let’s see how much your score is affected by your payment history:

* Your car was sold at the remaining balance or more than the remaining balance
** Your car was sold, but a deficiency balance remains.
★ Fico score drop was estimated by reviewing user posts on myfico.com

The credit-scoring algorithm is proprietary to all who formulate it, namely, FICO and Vantage. As you can see in the chart above, even a slight misstep can cause those with an excellent credit score (for our purposes here, it’s 780). For those with a credit score below 700, there is probably one or more other factors in your credit score that is driving it into the “good” range (for our purposes, this is 680).
Again, the chart above only approximates what your credit score drop would be if any of those events occurred. John Ulzheimer, credit expert for Credit Sesame says, “It’s not as simple as just assigning a number to those incidents. That’s not how credit scoring works. However, judgments and repos are equal derogatory events to whatever the impact, it would be the same assuming the age of those 2 events are the same and they’re added to identical credit reports…which of course would never happen because no 2 reports are the same.
“For some people adding a repo or a judgment would be meaningless if their credit reports are already polluted with derogatory information. For others, the impact would be catastrophic. Generally speaking, people with good scores are going to see a larger score drop than someone with already poor scores. This is because no derogatory event has a specific point value. “
A key takeaway from Ulzheimer’s statement is that the above charts are approximations, and indeed there is no guarantee that if you have an event listed in the chart above that your score drop will fall into the ranges listed. The other take away is that everyone’s credit report is unique. Buried in consumer reports are metrics like:

• the amount of debt, in the case of repossessions, unpaid charge offs, foreclosures, and settlements
• whether or not a balance is still owed on an account,
• the amount of time the problem with your credit lasted, and
• how long has it been since the credit problems began.

The more derogatory marks that are on your credit report, the less effect an individual occurrence has on your credit.

Maxing Out Credit Cards

If you max out a credit card, you will experience about a 25 – 45 point drop in your credit score. You will see this drop even if you pay off your credit balances each month: your statement date is the date that a credit card company reports your balance to the credit bureaus. In fact, the higher your starting score, the more a maxed-out card can hurt you. Someone with a so-so score of 680 stands to lose only 30 points, at most, says FICO.

Short Length of Credit History

You average age of accounts (AAoA) is 15% of your credit score and it’s based on the amount of time your accounts have been open. It is not the amount of time you’ve had a credit history, though these two things can be closely related. Therefore, if you are new to the credit world, you will not be able to get a perfect credit score.

Average Account Age: How People with Excellent, Fair Credit Scores

Your Mix of credit

Barry Paperno, credit-scoring expert, says that your mix of credit has the least impact of any of the 5 criteria, making up only 10% of your score. “FICO’s research has found that, all things being equal, consumers with a ‘mix’ of credit types on their credit reports tend to be less risky than those who have experience with only one type of credit,” says Paperno, “it’s best to consider this category as more of a ‘good to know’ than a ‘got to know’”.

Amount of new credit

The amount of new credit you have comprises 10% of your credit score, but it has more impact than the mix of credit. New credit is calculated by considering factors about your accounts that include:

• How many accounts have been opened in the past six to 12 months
• How many credit inquiries have been made recently.
• How long ago you opened a new account
• How long ago you had a credit inquiry.

Hard points numbers: it’s widely accepted that merely having an inquiry on your credit report can cost you up to 5 points.

Sources:

• http://www.creditcards.com/credit-card-news/fico-credit-score-points-mistakes-1270.php
• http://blog.credit.com/2015/01/the-simple-chart-that-can-explain-why-your-credit-score-dropped-105835/
• http://ficoforums.myfico.com/
• http://www.creditcards.com/credit-card-news/average-credit-account-age-fico-score-1586.php
• http://www.myfico.com/crediteducation/questions/credit_problem_comparison.aspx
• http://www.creditcards.com/credit-card-news/fico-score-new-credit-loan-inquiry-1270.php
• http://www.creditcards.com/credit-card-news/how-repossession-affects-credit-1270.php

Right at the bottom of your credit report, you’ll probably notice a section called “credit inquiries.” And while these footnotes might look innocent, they could be hurting your credit score. Fortunately, there is a solution.

What Are Credit Inquiries, and How Do They Affect My Credit Score?

When a bank, lender, or other business entity reviews your credit score (as part of the process of applying for a new line of credit), a note is placed in your credit history. This is called a credit inquiry.

Credit inquiries usually have a negative impact on your credit score, although it’s a fairly small one. This is because too many credit inquiries suggest to potential lenders that you might be “credit hungry” — and possibly in some financial trouble. Nobody wants to lend to someone if they suspect that they might not be repaid.

Soft Inquiries Vs. Hard Inquiries

There are two types of inquiries, soft and hard. Soft inquiries are inquiries from existing creditors or when you request a copy of your own credit report. Hard inquiries occur when you apply for new credit and the lender makes a request to see your credit report.

Your FICO score does not take into account any credit report requests that are soft. It also doesn’t consider involuntary inquiries made by businesses with which you haven’t applied for credit, for instance, if a potential employer wants to check your credit score as part of your application.

Hard inquiries do count against your credit score and can result in a drop in your credit score of two to five points.

Removing Inquiries From Your Credit Report

Normally, credit inquiries will remain on your report for two years, at which point they drop off without any effort on your part. But if you can’t wait that long, there are ways to have inquiries removed early.

Your credit report (which you can obtain a free copy of) will contain a record of your recent inquiries. Some of these you should recognize, but others you might not. Thanks to the Fair Credit Reporting Act, you are protected against any unauthorized inquiries appearing in your credit history. That means it’s entirely within your rights to contact those inquiring lenders and challenge whether they had authorization to pull your credit file. If they cannot (or aren’t willing to) provide express proof that you authorized the inquiry, you can demand that they remove the inquiry.

If it sound complicated, don’t worry; it’s true that managing your credit history can be a complex process, which is why most individuals turn to a credit repair specialist to handle the work. Remember, a couple of inquiries here and there are perfectly normal and won’t destroy your score. Still, if a quick boost is needed, removing those inquiries is a useful step to take.

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The middle class has been in the news a lot lately thanks in part to the debates emerging around the 2016 presidential election cycle. Most notably Democratic candidate Bernie Sanders has said he is stumping for the working class and wants to fix the “rigged economy” we live in. Meanwhile studies have shown that the middle class is indeed shrinking and a report by the Federal Reserve reveals that 47% of Americans wouldn’t be able to cover a $400 emergency if they had to.
That’s probably why Neal Gabler’s piece in The Atlantic titled “The Secret Shame of Middle-Class Americans” has struck a chord and gone viral over the past few weeks. In his lengthy article Gabler confesses to the financially instability — which he refers to as “financial impotence” — he endures despite being a relatively successful author and writer. As Gabler points out (and the Fed survey drives home) he is not alone. So what lessons are there to be learned from Gabler’s story to help those in the 47% get themselves to a better financial place?

Standardize your expenses

One of the issues Gabler refers to often is his profession as a writer. This forces him to stretch his advances for years while he works to complete his books. As a result of this arrangement Gabler also ran into problems with the IRS since he would receive large sums of money some years and next to nothing in subsequent years. Furthermore this caused him to pay tax penalties since he didn’t have it in his budget to send a chunk of his advance to the government.

While most Americans aren’t likely to have a situation quite like this one there are circumstances where we might have more money in certain months or years than in others. The lesson here is to try to save as much as possible from the “fat” times to carry you through the “lean” ones. For example a teacher who is only paid for the nine months out of the year they work ought to set aside part of their paycheck to get them through summer (not to mention grow their savings as well).

Even if you don’t have a job that sees major monetary fluctuations there are other ways you should attempt to standardize your expenses. This could involve any number of tricks that help you budget for your larger expenses as well as set money aside. An example of this would be, if your electric bill is $150 dollars at its peak, budget for that $150 every month. That way, if your bill is lower, you’ll have money you can add to your emergency fund or other savings. Similarly, if you have an annual or bi-annual bill that’s due such as insurance, ensuring that you are stashing monthly payments towards this bill can prevent you from paying late or wiping out your savings when it comes due.

Be proactive with your financial problems

As Gabler addresses in his piece many of us with financial problems don’t talk about it. Worse yet, some may try to hide their issues or even ignore them all together. Unfortunately this can lead to more problems.

We’ve all had times when the last thing you want to do is check your bank account balance because of the bad news doing so will bring. However in these cases the best thing to do is be proactive and make changes. One such change Gabler reports making is moving his family from Brooklyn to East Hampton. This move not only saved them money on rent/mortgage payments but also allowed them to stop paying for the private school tuition they were paying in Brooklyn.

Sadly, in Gabler’s case, the advantages of the move were greatly offset by their inability to sell their Brooklyn apartment. Eventually Gabler was forced to sell the apartment at a loss but was able to rid himself and his family of that mortgage payment. He says, “I suppose I could have slashed the price sooner to bring in more would-be buyers—in retrospect, that would have been the wisest choice—but I wanted to cover what I owed the bank.”

Clearly Gabler’s logic in not wanting to lose money on the deal makes sense. On the other hand he doesn’t state how much he spent on unnecessary mortgage payments before inevitably taking a loss anyway. There’s no denying this is a tough situation but, by his own admission, it’s one that could have been mitigated by being more proactive.

There is a lot to be said for recognizing when you’re headed for or are in a tough financial situation and making changes to minimize the damage. Relocating or downsizing is just one example (even if it didn’t go so well for Gabler). Other potential options include selling an unneeded vehicle, tightening your budget using the envelopes method, or even consolidating your credit card debt with a personal loan. Of course you’ll also want to build up an emergency fund as soon as possible.

Avoid “keeping up with the Joneses” and set an example

Gabler points to the “keeping up with the Joneses” syndrome as one of the reasons the American middle class is struggling. This is to say that we buy things we can’t really afford just because we want the latest or greatest. In Gabler’s case — regarding his decision to send his children to private school — he says, “I never wanted to keep up with the Joneses. But, like many Americans, I wanted my children to keep up with the Joneses’ children, because I knew how easily my girls could be marginalized in a society where nearly all the rewards go to a small, well-educated elite.”

Although certainly noble, this still falls under the banner of living beyond your means. Overspending and pushing the limits of your income is what first leads to financial fragility and ultimately larger money issues. The most important thing is to take care of yourself and your family and not to get caught up in the affairs of others.

Additionally, while we’d all like to provide our children with a life as good as or even better than the ones we’ve had, piling up debt is not the answer. Not only does this jeopardize your entire family’s future but also sets a bad example. Children often learn financial habits from their parents meaning that your behavior could only serve to continue the cycle of paycheck-to-paycheck living for another generation.

As Gabler points out there is no easy solution to fixing the problems the middle class face. And, as we’ve seen over the past year, politicians all have their own diagnoses and set of ideas for setting Americans on a new financial course. Still the biggest change we can make is taking a look at our own situation and doing whatever we can to strengthen our savings.

This article by Jonathan Dyer first appeared on Dyer News and was distributed by the Personal Finance Syndication Network

by Otto Baynes

Most types of large loans require you to have significant income and credit history built up to secure them. Student loans are an aberration in the lending world; at age 18 you can begin securing loans in the tens of thousands of dollars with no credit, no collateral, no income and no immediately clear path to repaying them.

Banks have tended to secure student loans at the back end rather than the front, and one central means of doing so has been to lobby the government to not allow them to be discharged through bankruptcy. Up until 1976, it was actually possible to include student loans with other forms of debt in a bankruptcy proceeding. The bankruptcy code was progressively altered from that point forward, first to severely limit the circumstances under which federally-backed loans could be discharged, then eventually to also include private loans in these circumstances as well.

The key words here are “severely limit,” however. Popular belief is that student loans are like tax penalties or child support — there’s simply no way to discharge them in bankruptcy and you’re stuck with them forever. However, that’s not what the law says. It is possible to discharge student loans in a Chapter 7 or 13 bankruptcy if you are experiencing “undue hardship” and can demonstrate that you are unlikely to ever be able to pay them back.

Why Am I Just Now Hearing About This?

So why do so few people actually do it? Because the law is worded very vaguely, and in the end it usually comes down to the interpretation and discretion of each individual judge or appellate panel in each bankruptcy case. It also requires a separate adversary proceeding, which is sort of like a miniature civil suit against the lender that takes place within the bankruptcy. This makes the bankruptcy take extra time and generally requires bringing in a lawyer who is experienced in these matters.

To be blunt, most people won’t be so abjectly low on means of sustenance that they’ll qualify for the court’s definition of “undue hardship.” If the student loans are an undue burden that is contributing to actual financial ruin, however, this course of action may be worth looking into.

The Brunner Test

Since the wording of what constitutes “undue hardship” is left so vague and open to interpretation, successful bankruptcy discharges of student loans generally rely on citing precedent from previous cases. There is one standard test that has been commonly used in many cases across the country. It is called the “Brunner Test,” and it is a simple series of three questions:

• Has the debtor attempted in good faith to make payments on the loan that are within their means?
• Is the debtor’s income so low that forcing them to make the minimum allowed loan payment will interfere with their basic necessary expenses?
• Given the applicant’s current income and likely future prospects, is there a realistic expectation that the loan can ever be fully repaid?

Being able to honestly answer “yes” to the first two questions and “no” to the third means that you have a chance to have your student loans discharged along with the rest of your debt, provided it is a chapter 7 or 13 bankruptcy (no other types allow you to do this.) It will be left up to the appellate panel or the judge to make the final determination, however. If you happen to get a judge who is a big Ayn Rand fan and expects people to get out of trouble by yanking their bootstraps so hard they fly into a higher tax bracket, you may not get your loans discharged even if you have a strong case under the Brunner terms. This is where the help of an experienced bankruptcy lawyer comes in.

Prior Case Law

If you feel like you may be able to do this, the best place to start looking is at prior case law where people were able to get their student loans bundled into their bankruptcy. One central case to look into is Hedlund v. The Educational Resources Institution, which basically established that debtors with student loans should not be expected to live in conditions resembling indentured servitude just to pay off that specific debt. In Re Walker, 406 B.R. 840 is one that is of specific interest to parents, as it establishes that having a large number of children cannot be held against you as a factor in dismissal. And Shaffer v. U.S. Department of Education determined that even if the debtor has the education and experience to potentially make payments in the future, there must be a clear path to such financial stability or the presumption cannot be made that it will just suddenly materialize someday.

These are just a few starting points. Roughly 200 to 300 bankruptcies each year allow the discharge of student loans. This number is so low not because of refusals, but because less than 1% of all those who file for bankruptcy and have student loans even attempt to do it! Naturally, if you never file the adversary proceeding, there is no chance whatsoever that your loans will be discharged.

Credit Sesame recently published a study showing that men in general have better credit scores than women. The study, taken by surveying 2.5 million of their 7 million members, found:

• Men have more debt, yet higher credit scores. The average credit score for men was 630*; for women it was 621. Men’s average debt was $25,225 and for women it was $21,171. Debt to income ratio averaged 17 for men and 18 for women.
• Men had more credit card debt than women. Men’s average credit card balance was $3,854 for men, $3,624 for women. Credit limits were higher for men as well: average credit limit was $20,043 for men and $17.159 for women. Men’s percent utilization of credit limit was 19% for men, 21% for women.
• Women are more likely to have collection accounts. 57% of men had no collection accounts; only 53% of women did. Both 29% of men and women had one to four collection accounts. 14% of men had 5+ collection accounts, while 18% of women did. In some states, a third of all women had collection accounts, while only 20% of men did.
• The more debt a consumer has, the better their credit score tends to be. However, men with the same amount of debt as women tended had better credit scores. For instance: men with $150,000 of debt averaged a 700* credit score, while women with the same debt averaged a 690 credit score.
• The older you are, the better your credit score. However, men had better credit scores than women throughout life, with the largest credit score gap (15 points) occurring when men and women reach the age of 65.
• Where you live also tends to influence credit scores. Zip codes with the highest credit scores for men had lower scores for women in every case. Large metropolitan areas in the East and West had the highest credit scores: New York City averaged a 734* credit score for men with women having a 728 score. Only in areas with the lowest average credit scores did women best men. For instance in Columbus, OH, men averaged a 570 credit score; women averaged 575.

*Credit scores range from 300 to 850, with 850 reflected excellent credit.

Main Difference in Credit Scores – It Boils Down to Income

While income is not a factor when calculating credit scores, having more money definitely makes it simpler to manage credit: more money means making payments is a lot easier to do. More money also means loans can be paid down at a faster rate: Bloomberg Business calculated that it may take a woman one year longer to pay back student loans. The cycle of higher credit feeds on itself: better credit management leads to higher credit scores and higher credit limits on credit cards. Higher limits mean you can carry a larger balance and still have low credit utilization rates. The lower your credit utilization (the ratio of what you owe to your credit limit), the higher your credit score. Credit utilization is 30% of your credit score.

Women in general make 79 cents to each dollar that a man makes. This gender income inequality occurs across all types of jobs, ages and races. Why do women get paid less? The reason may be two-fold: there’s a cultural bias in the perception of women’s competence as compared to men and also that women are usually responsibly for child-rearing, which can get in the way of working 100 hour workweeks, the kind of face time that usually gets rewarded with promotions and partnerships.

President Obama announced in January 2016 a proposal that addresses the gender pay gap. Under his proposal, companies with more than 100 employees will be required to report data on pay broken down by gender, race and ethnicity. This “outing” of pay grades may pressure companies to pay their employees more equitably.

Less pay can also be responsible for the higher incidence of collections of women over men. If you are short on cash, you may not be able to pay all of your bills on time, and if enough time elapses, these bills can go into collections. Collections are credit score killers – one collection can drop your credit score by 100 points or more, depending on where you start out on the credit scale.

Debt to income ratios are super important when it comes to obtaining a mortgage. If you make less money, your debt ratios will skew higher, which is bad. Conventional loan guidelines like to see no more than 36% of your income going towards your mortgage; FHA guidelines allow 42%. Mortgages are considered installment loans and having an installment loan can help your credit rating as the credit scoring models like to see a mix of credit, both revolving (credit cards) and installment (mortgages and auto loans). Your mix of credit accounts for 10% of your credit score.

Q.
I recently applied for a mortgage and was denied because my credit score was under 600. I was surprised to hear this because I have no debt beyond my car payment which has never been late in the 4+ years that I have been making car payments. I got rid of all my credit cards and paid them off 8 or 9 years ago. The mortgage company said that THAT was the problem. I don’t have ENOUGH established credit and they suggested that I get 3 or 4 cards. Not an easy thing to do when your credit score is so low. Talk about a “Catch-22”!

The decision to eliminate my credit card debt has come back to bite me in the butt. The only other payment that I make every month is my rent. I have a good, strong solid rental history of 6 years with my current landlord and I can also throw in the 2 landlords before this one. Unfortunately, my rental payments don’t get reported to the credit bureaus, so it does nothing to benefit my credit. I have found several web sites that, for a montly fee, claim to report rent payments to Experian and Trans Union, and that this has the POTENTIAL of raising my credit score substantially.

As a tenant, I have to sign up and then my landlord can go back up to 2 years and verify my on-time rentaI payments. I rent from an individual and this is the only rental property that he has. The 3 that I have looked at are RentalKharma.com, RentBureau.com and RentReporters.com. I’m a little hesitant to sign up for any of these for fear that it is just going to cost me money and not benefit my credit score. I don’t know if this matters or not, but I live in Michigan. Perhaps an answer to my question will benefit renters all over the country.

A.
Your landlord or rental management company may be able to help you by using rent-reporting companies like this, and it will be your job to convince them to do so, but there are some things to consider. The companies themselves need to be reputable, cost effective, and their service needs to work.

Reporting rental history is hardly an established way of building credit yet. VantageScore and FICO are on board, but the problem lies in getting the rental payment history from your landlord to the credit bureaus, which is no small task. Experian is working overtime to make this commonplace (starting in 2010 with the purchase of RentBureau), and TransUnion is definitely opening the door for large rental property management companies with ResidentCredit, but both of these credit bureaus just started incorporating rental history last year. And, Equifax appears to be playing catch up.

One thing is for certain, nobody is talking about how much this type of trade line may, or may not, raise your credit score. From what I can tell, the less credit you have (college student, no score, etc.), the more you may benefit from this type of reporting. For the average joe who already has a score, the rise in points may only be marginal. We’re still in the early stages of rent reporting, but RentTrack did a 6-month review of the impact last year that found the overall affect to be positive.

Getting back to the aforementioned rent-reporting companies. I did some research and here’s what I’ve learned:

RentalKharma

This company has a B+ rating with the BBB, which isn’t too bad, with mostly resolved complaints, but I would definitely give it a look to learn where the issues have been, so you know what to be on the lookout for. They charge an upfront $40 fee, then $9.95 per month thereafter, but it was buried in the site – I had to dig into the FAQ to find it! I prefer a company to be forthcoming and transparent in their cost and business practices.

I do like their 100% satisfaction guarantee that states a full refund if your rental payments don’t get verified by your landlord or rental management company, however, I couldn’t help but notice there was nothing about guaranteeing that rental payment showing up on your credit report. If you refer back to the BBB, I think you’ll find this has been an issue in the past. The other thing that bothers me is the fact that they only report your rent to TransUnion.

Upon searching this company, it was hard to ignore the complaints on them around the internet. Please be vigilant in your research before hiring RentalKharma.

RentBureau

These guys are owned by Experian, so everything will be somewhat streamlined. If you’re renting from a property management company, ask them whether they already report to RentBureau. If not, Experian recommends you and your landlord opt-in using the following rent payment services (all with stellar BBB ratings), which are different from rent reporting companies:

• ClearNow – Reports rent payments to RentBureau (Experian) once landlord and tenant are both enrolled (landlord pays $14.95/month for one debit; tenants are auto-debited for rent payment).
• RentTrack – Appears to be for landlords with 20 or more properties. Reports to Experian and TransUnion. Price is not listed on their website.
• PayYourRent – In your case, having a landlord, he/she would need to pay $19.95/month for ACH (there’s a cc option too).

Once your landlord or property management co. signs up with one of these rent payment services, they are usually charged monthly for the convenience of accepting tenants’ rent payments online via ACH or credit card, plus transaction fees. Tenants are also expected to sign up or opt-in to pay rent using their service.

For tenants, like you, who are interested in this strictly for the credit reporting benefits, you can offer to cover that extra cost for your landlord in your rent payment. You know, bargaining can be a powerful tool.

RentReporters

Although RentReporters has an A rating with the BBB, I can’t say the same for their website. It was over-simplified, and I found the lack of information very frustrating. As a result, I can’t say much because I, honestly, am not sure how it works or what the true cost is for both renter and landlord. If you have used, or have any first-hand experience with this company, please share in the comments below.

This article by Consumer Recovery network first appeared here and was distributed by the Personal Finance Syndication Network.