What You Need To Know About Cancelling Mortgage Debt

A lender will, on occasion, forgive some portion of a borrower’s debt. The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule are available, but, until recently, the borrower was required to pay tax on the debt forgiven. A new law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. However, this relief expires on December 31, 2012 and NAR will be working to obtain an extension throughout the year.

Below is some general information you need to know about this law and cancellation of mortgage debt.

General Rule for Debt Forgiveness
If a lender forgives some or all of an individual’s debts, the general rule is that the forgiven amount is treated as ordinary income and the borrower must pay tax on the forgiven amount. Exceptions apply for bankruptcy, insolvency and certain other situations, including mortgage debt.

Current Law for Mortgage Debt
(Jan. 1, 2007 through Dec. 31, 2012): A borrower can be excused from paying tax on forgiven mortgage debt. The debt must be secured by a principal residence and the total amount of the outstanding obligation may not exceed the original mortgage amount plus the cost of any improvements.

Does the relief apply only to a sale?
No. The provision has broader application. Lenders might forgive some portion of mortgage debt in a short sale (when value at sale is less than the amount owed) or in a foreclosure where the debt is wiped out. In addition, if a borrower still living in the home is able to make an arrangement with a lender that reduces the principal balance of a mortgage, the amount forgiven in that workout will not be taxed.

Can the homeowners in a short sale or foreclosure claim a loss?
No. The loss is considered a personal loss and is, therefore, ineligible for either capital loss or ordinary loss treatment.

What happens to the seller when mortgage debt is forgiven?
Until January 1, 2013, the homeowner will pay no tax on any forgiven amount.

Does this provision apply to a refinanced mortgage?
Only in limited circumstances. The relief provision can apply to either an original or a refinanced mortgage. If the mortgage has been refinanced at any time, the relief is available only up to the amount of the original debt (plus the cost of any improvements). Tax relief is generally not available for second mortgages or home-equity lines of credit where the funds are not used for home improvement. Any amount that is not eligible for the relief provision will be taxed as ordinary income.

How does the homeowner get the correct information to the IRS?
The lender is required to provide the homeowner and the IRS with a Form 1099 reflecting the amount of the forgiven debt. The borrower/homeowner must file a Form 982 to reflect the amount forgiven and to show the reason why the forgiven amount is not taxable. Any taxable portion of forgiven debt will then be reported on the homeowner’s Form 1040 for the tax year in which the debt was forgiven.

What if a property declines in value but the owner stays in the house?
The provision would not apply. The provision applies only at the time of sale or other disposition or when there is a workout (reduction of existing debt) with the lender.

Do all lenders forgive mortgage debt when property values decline or the home is in foreclosure?
No. Some states have laws that allow a lender to require a repayment arrangement, particularly if the borrower has other assets. Forgiveness of debt is always at the lender’s discretion.

Information provided by Linda Goold is the Tax Counsel for National Association of REALTORS

Mortgage Insurance Deduction Takes A Hit

Though its demise drew little attention because of the partisan year-end brawl over the payroll tax cut extension in Congress, a key mortgage financing benefit disappeared at the end of December: The ability of large numbers of homebuyers and owners to write off the premiums they pay for mortgage insurance.

The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively ratchet up the costs of homeownership this year.

The expiration of mortgage insurance deductibility will hit many low-down payment conventional loans originated since 2007, plus virtually all new mortgages closed this year where the down payment is less than 20 percent. Though industry experts do not have precise numbers, their estimates range into the millions of existing owners and new purchasers potentially touched by the deductibility termination. Borrowers using guaranteed veterans (VA) and rural housing loans, where down payments can drop to zero, also are affected.

The change in the law took effect Jan. 1 along with the expiration of 58 other tax code benefits that Congress failed to renew, such as credits for home energy improvements, credits for builders of energy-efficient new houses and deductions for state and local sales tax payments. They were all components of what would have been an annual “tax extenders” bill authorizing continuation of relatively noncontroversial expiring benefits for another year or more. Congress could still reauthorize all or some of the write-offs retroactively this year, but the current poisonous political atmosphere on Capitol Hill raises doubts about the timing of that scenario.

The mortgage insurance premium deduction dates to legislation enacted in 2006. It allows purchasers and refinancers who use either private mortgage insurance or federal insurance or guarantees, and who itemize on their federal tax returns, to write off their premiums. Borrowers who are single or married and filing jointly with adjusted gross incomes of $100,000 or less can write off 100 percent of their annual mortgage insurance premiums. Married homeowners filing singly can write off 50 percent of premiums. Borrowers with incomes above $100,000 may qualify for partial deductions on a sliding scale.

In many cases, the post-tax savings for these borrowers are significant. New buyers with an income around $100,000 and a mortgage of $200,000 would save between $600 and $1,000 a year, depending on their credit score and loan-to-value ratio, according to MGIC, one of the largest private mortgage insurers in the country. For households with lower incomes, the impact would be less, depending on their marginal federal tax brackets.

David Stevens, who served as FHA commissioner and is now chief executive of the Mortgage Bankers Association, says the loss of deductibility of mortgage insurance “hits a segment (of consumers) — middle-income and first-time buyers — where affordability is especially important.”

But mortgage insurance was not the only housing-related casualty of the pre-Christmas skirmishing. As part of the temporary extension of the payroll tax cut, negotiators tacked an unusual provision that raises fees on the majority of conventional mortgages — those originated for sale to or guarantee by Fannie Mae and Freddie Mac. Starting in April, Fannie and Freddie will impose a surtax on the guarantee fees they charge private lenders equal to one-tenth of 1 percent. Lenders are virtually certain to pass those fees to consumers in the form of a higher note rate or loan charges up front. Industry estimates suggest the surtax could add an eighth of a percentage point to rates and raise costs to borrowers over the life of the loan by more than $4,000 on a $200,000 mortgage.

Unlike standard guarantee fees, which are used by Fannie and Freddie to defray loan-default expenses, the new funds will be sent directly to the Treasury to help pay for the $36 billion cost of the temporary payroll tax cut. FHA loans also will be hit with a fee increase by the payroll bill, raising the annual premiums it charges new borrowers by one-tenth of a point.

At a time when the Federal Reserve is warning that there can be no broad economic improvement until housing recovers, it may strike you as odd public policy to raise costs for homebuyers and refinancers in order to fund unrelated, temporary tax relief. But that’s not the way they saw it on Capitol Hill in the rush to holiday recess.

Bottom line: The mortgage insurance deductibility problem may disappear if mortgage insurance gets included in an election-year “extender” package. But the fee hikes on most new mortgages are here for the foreseeable future, so factor them into your housing budget.

Ken Harney, THE NATION’S HOUSING

Seven Tips to Protect Yourself from Online Identity Theft

1. Beware of email requesting personal information. Don’t reply to or click on a link in an unsolicited email that asks for your credit card, bank or brokerage account information, passwords or PINs, social security number or other types of confidential information, even if it looks like the email comes from a financial institution with which you do business. When in doubt, log onto the main website of your credit card, bank or brokerage firm at the normal Web address you use or call your firm using a telephone number that you know or one from a previous account statement to inquire about whether the request for information is legitimate. Alternatively, you can obtain the main office address and primary telephone number for any brokerage firm through FINRA BrokerCheck. You also can visit the Anti-Phishing Working Group’s website to find out about some of the latest phishing attacks.

2. Leave suspicious websites. If you think a website is not legitimate, leave it immediately. Legitimate firms typically offer customers a number of ways to contact them.

3. Keep your personal and financial information secure online. Here are a few simple steps that you can take to make your information more secure when you go online:

• Keep your computer system up to date with the latest security patches.
• Use anti-virus and spyware detection software and be sure to update this software regularly, as new viruses and Trojan Horse programs appear frequently.
• Use personal firewall software. Firewall software should thwart intruders from getting access to your PC over a network.
• Consider installing a Web browser toolbar to help protect you from known fraudulent websites. These toolbars alert you to known phishing websites.
• Never download software or files from an unknown source.
• Change your passwords on a regular basis. Never send your password to anyone in an email. Try not to write down your password, but if you must, put it in a safe place.
• Avoid emailing personal or financial information.
• Read your firm’s policies on online security. Review other tips and security instructions that may be offered to better protect your access.
• Before submitting personal or financial information through a website, look for the locked padlock image—  —on your browser’s status bar or look for “https://” [note the “s”] at the beginning of the Internet address. While a padlock image and “https://” does not mean that the website is authentic or secure—indeed both can be forged—the absence of either the padlock or the https:// does mean that the site is not secure.
• Log off of any secure legitimate website after completing a transaction.
• Be careful when using Internet kiosks or other people’s computers. Since you don’t know what security precautions have been taken, you may be putting your confidential information at risk.

4. Know who you are doing business with. Before you open an account with a brokerage firm, use FINRA BrokerCheck to make sure the brokerage firm and broker are properly registered and to verify phone and address information you receive from the firm or broker. Investments are a major financial undertaking and should be afforded the same degree of investigation and caution as any other major purchase you might make.

5. It is a good idea to check your credit report every year. To guard against identity theft, look for accounts you did not open and any unexplained transactions. You can obtain free annual copies of your credit report from each of the three major credit bureaus online at http://www.annualcreditreport.com or by calling (877) 322-8228. You may also contact the credit bureaus directly as follows:

Equifax (800) 685-1111 http://www.equifax.com

Experian (888) 397-3742 http://www.experian.com

Trans Union (800) 888-4213 http://www.transunion.com

6. Review your account statements.  This is your last line of defense. If you are victimized, the sooner you catch it, the better. Regularly review your online account information for unauthorized trades, cash withdrawals or any other unrecognized activity; do the same as soon as you receive each monthly or quarterly statement. If you have moved, make sure to update your postal address with all of the firms where you have accounts. If you receive your statements by email and change your Internet service provider or otherwise change your preferred email address, make sure to update your email address with all of the firms where you have accounts. Immediately report any suspicious activity to your brokerage firm.

7. Act quickly if you believe you’ve been scammed. If you believe that you’re a victim of one of these scams, you need to act quickly. For example, you may only have 60 days to report a loss or theft of funds through an electronic funds transfer to limit your liability.

• Identity Theft. If you believe your identity has been stolen, the Federal Trade Commission’s Identity Theft website contains step-by-step directions of what you should do.
• Investment Scams. If you’re the victim of a brokerage firm identity theft scam, contact FINRA’s Complaint Center.

Additional Resources

FINRA, Protect Your Identity

If You Have A VA Home Loan, Read On!

VA Streamline Refinance

If you are in a VA home loan now and are looking to refinance, a VA streamline refinance is probably the best option for Veterans.  A VA Streamline, also known as an IRRRL (Interest Rate Reduction Refinance Loan), is a refinancing option that allows veterans in a VA mortgage to refinance with another VA mortgage with added benefits that FHA and conventional loans don’t have.  VA streamlines generally require zero money from the borrower at closing and less paperwork.

Benefits of a VA Streamline Refinance:

• No appraisal options available
• Lower credit score requirements
• No income verification
• Lower closing costs
• Defer up to 2 mortgage payments
• Potential cash escrow refund

Refinancing your VA home loan can save you a hundred dollars or more with each mortgage payment and thousands of dollars over the life of your loan.  You can defer up to 2 months payments and any money left in your escrow account will be paid out to you after the refinance loan closes. You may also be eligible for a cash escrow refund after your current loan is paid off.

That extra cash from a VA streamline will allow:

• Payoff high interest credit card debt
• Apply extra money to the principle of your loan and pay it off faster
• Take a family vacation

Lost perks: ‘It’s a hard time to be an employee’

 – Cindy Krischer Goodman – MiamiHerald.com

Once a week for three months, Eric Ferrer shut his office door, made a phone call to his life coach, and spent the next hour shaping his personal and career goals. The sessions were paid for by his employer — a company benefit that 28-year-old Ferrer ranks as valuable as health insurance.

“It helped me figure out my vision and stay on track,” says Ferrer, a senior recruiter at Signature Consultants, an IT staffing firm in Fort Lauderdale.

While surveys show coaching is one of the job perks young workers covet, it’s one of the rare benefits companies offer. Most employers have cut back on benefits, particularly in the past year, keeping only the basics such as healthcare and retirement plans.

While employees like Ferrer appreciate the perks their companies offer, only half of workers recently surveyed cite benefits as “very important” to job satisfaction. A new study by the Society of Human Resource Management shows job security now has overshadowed benefits as key to job satisfaction.

“People are just happy they’re working when their neighbors are not,” says Joyce Gioia, a business futurist and CEO of The Herman Group. As Labor Day approaches, the national unemployment rate remains high at more than 9 percent. With the economy still in flux, workplace experts like Gioia are predicting it will take several years before employers bring back their more generous benefits.

In 2011, 77 percent of employers reported their benefit offerings had been negatively affected by the economy — a 5 percent increase over the past year, according to the SHRM 2011 Employee Benefits Research Report.

For the most part, employers have kept the basics — health insurance, paid holidays, life and dental insurance. However, they have reduced offerings such as long-term care insurance, retiree health coverage and adoption benefits. And most have slashed benefits such as executive club memberships, legal assistance/services, mentoring programs, organization-sponsored sports teams, professional development opportunities, travel planning services and housing/relocation costs.

“All the ‘nice to haves’ have been cut,” says Mark Schmit, director of research for The Society for Human Resource Management (SHRM). “It’s a hard time to be an employee.”

The loss of benefits, even some that don’t seem significant, can have a harmful effect on work/life balance and financial viability. For example, Candace Whitaker, HR director for Signature Consultants in Fort Lauderdale, says her counterparts at some companies are eliminating short-term disability. But she feels a few weeks without a paycheck could devastate her hourly workers: “If an employee breaks an ankle and he doesn’t have short-term disability, it could put a family under.”

Whitaker now scrutinizes the cost of every benefit and the return and tries to be more creative to avoid cuts. “I cannot name a benefit that I would not cringe if I saw it go away.” Even the life coach her company made available to Ferrer is a benefit that has proved its worth: “Employees that have been through that program are excited about their future in this company. We see impact in their self-esteem and openness to take on new challenges.”

When it comes to deciding what to cut, some companies are turning to employees for input. Baptist Health, consistently recognized for its rich benefits offerings, regularly polls its 13,000 employees — 75 percent of whom are women. “We’re tapped out on spending additional money, so I’m looking for what benefits give the most bang for the buck,” says Maggie Marshall, assistant vice president of Total Rewards benefits for Baptist Health. Giving employees the benefits they want keeps them engaged, she says: “An engaged employee is willing to put forth discretionary effort when necessary, versus a person who is ready to go out the door in a minute.”

Marshall discovered one of Baptist’s highly valued perks is Lifeworks, which offers counseling, free assistance with work and family issues, and the use of a personal assistant has been used 40,000 times over the last three years. “It only comes out to be about $20 a year per employee and we’ve seen a huge return.”

DentalPlans.com in Plantation says its growth has allowed it to add benefits, rather than cut them. Management uses a unique approach to zeroing in on what benefits its employees appreciate. Four employees a month eat breakfast with CEO Buddy Johnson and make suggestions. The feedback allows management to better tailor benefit offerings to its young workforce. What came from breakfast was “we wish we had a place to take a break” and “we wish we had a 401(k) program.”

The company now has both. An employee lounge with a beach theme, a foosball table, a Wii and a popcorn machine provides a place for sales staff to chill. “When our employees are happy, it shows in their performance,” says president Jennifer Stoll.

Going forward, rising healthcare costs may cause companies to spend more on coverage and require they scrutinize benefit offerings even more. Those employers who continue to cut without careful attention to effects on job satisfaction could find their best employees will bolt when the first opportunity comes along, says Gioia: “They will find another employer who will be more sensitive to their needs.”

Cindy Krischer Goodman is CEO of BalanceGal, a provider of news and advice on work/life balance. Visit http://www.worklifebalancingact.com or email her at balancegal@gmail.com.i

Are You In Need Of Credit Repair?

I remember my first day of college. I was walking through campus feeling overwhelmed and I noticed a big table in the middle of the quad with a sign reading “Apply Here”.

The table had two beautiful cheerleaders waving students over to sign up for a free college sweatshirt. The table was sponsored by VISA. I wanted a new sweatshirt so I asked the gal what I needed to do to get one. She told me it was easy. All I needed to do was fill out a form and have my parent sign their name next to mine. She said it would be easy to convince them to sign it. I just needed to tell them that they would sleep better knowing that I would access to money in case of an emergency.

That was more than twenty years ago. I learned early on how attractive having access to money could be. Thank goodness my parents didn’t co-sign. They told me to get a job if I needed extra money.

The banks are now starting to solicit high school students. They know that if they can get you started with a credit card early, you can easily fall into a debt trap that’s tough to get out of.

When people miss a payment, it gets reported to the credit bureaus. A person’s credit worthiness is shown in a credit score. Scores range from 350 to 850. Banks use this number to determine if a person qualifies for a loan or not.

If your score is low, then the loan company can either decline your loan or charge you higher interest. If this is the case, you may want to look into credit repair.

Credit repair businesses are specialists in their field. Many times a credit repair company can improve your credit quickly and make it easier for you to get a loan at the best rate possible. Credit reports can be filled with errors. A good credit repair company can fix the errors quickly. This service can also be helpful for people who have filed for bankruptcy, or have had a short sale or foreclosure.

Homeowners Race To Refinance As Mortgage Rates Plunge

By Drew DeSilver  Seattle Times business reporter

Plunging interest rates, a consequence of the turmoil in the stock market, are proving to be a boon for mortgage refinancers. But so far, those low rates aren’t doing much to reignite the nation’s torpid housing market, and they may even delay its recovery.

With rates on conventional 30-year fixed-rate mortgages falling near, and in a few cases below, the 4 percent level, homeowners locally and nationally have been rushing to refinance in recent weeks.

“It’s really quite astonishing,” said Rich Bennion, executive vice president at Seattle-based HomeStreet Bank, a major regional mortgage lender. “I’ve been in the business 34 years, and it’s like, how low can you go?”

On Wednesday, HomeStreet set its rate on a 30-year mortgage at 4 percent. The rate on a 30-year loan insured by the Federal Housing Administration was 3.875 percent.

Bennion said that in the first nine days of August, HomeStreet received 402 mortgage applications, about two-thirds of them refinancings. That compares with 716 applications for all of July.

Refinancings also have exploded at BECU, said Debra Toepfer, mortgage-production manager at the giant credit union.

BECU is averaging more than 100 new mortgage applications a day, Toepfer said — a 54 percent increase just since the end of July. Among those, there are four refinancings for every purchase.

On Wednesday, BECU’s rate on a conventional 30-year fixed mortgage was 4.25 percent, down from about 4.5 percent a month ago. The rate for a 15-year fixed mortgage was even lower: 3.625 percent.

The rates are nearing lows reached last October and November as an indirect result of tumbling stock prices.

Since late July, spooked investors have been selling shares and pouring the proceeds into perceived safe havens — and Treasury bonds, despite Standard & Poor’s recent downgrade of the federal government’s credit rating, are still considered the safest haven of all.

As investors bid up the price of Treasurys, the yield falls — in this case, to levels not seen since the depths of the 2008 financial panic. The 10-year Treasury bond, the most influential on long-term mortgage rates, ended Wednesday yielding a mere 2.107 percent.

The Federal Reserve’s message Tuesday that it would keep short-term rates ultralow until mid-2013, while not directly tied to mortgages, likely will hold down rates on all kinds of debt for the foreseeable future.

The possibility of locking in a lower rate, of course, doesn’t make refinancing a good idea for everyone. Homeowners need to consider closing costs, and whether they’ll be in the house long enough for their lower monthly payments to cover those costs.

While low, stable mortgage rates are good news for refinancers, they may not lure homebuyers back into the market, real-estate brokers and researchers say.

The Fed’s announcement “will relieve some of the pressure on would-be homebuyers to move before rates go up,” said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

“It sends a signal to prospective buyers that, if you think home prices are going to go down some more, you can stay on the sidelines and wait for a better price,” Crellin said. “It’s going to prolong fence-sitting on the part of many would-be buyers.”

The center reported Wednesday that 85,000 homes were sold statewide in the second quarter, 4 percent below the first quarter and 11.3 percent below a year earlier. The median resale price for the quarter was $226,900, down 7.6 percent from a year earlier.

According to the widely followed Case-Shiller home-sales index, month-over-month prices in the Seattle area have risen, however slightly, for three months in a row. To some, that indicates the local market has reached bottom, though it’s worth noting the local index rose five straight months in spring and summer 2010 before falling again.

Mike Skahen, owner and designated broker at Lake & Co. in North Seattle, said lower rates will aid sales, but a real upturn won’t happen until potential buyers believe home prices are rising.

“Buyers aren’t going to suddenly start streaming into (real estate) offices, but I would expect there to be some good open-house traffic this Sunday,” he said.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

Do Your Homework Before You Hire Movers

By Connie Thompson June 8, 2011

Originally printed at http://www.komonews.com/news/consumer/123515164.html

Most people would never hire a moving company with a name like “Bait and Switch” or “Grab and Go.” But that’s what you could be getting if you hire a mover you find on the Internet without checking them out.

Ryan Metzger is no stranger to moving company disasters. He’s been through the drill before.

“I’ve had past moves where stuff’s been broken, or they haven’t shown up when they said they were supposed to,” he said.

Moving season brings complaints by the truckload:

• Delayed pickup and delivery
• Damaged and missing property
• Property held hostage for more money
• Rejected insurance claims
• Illegal moving companies with invalid permits.

While many of the rogue movers are out-of-state, an alarming number are right under our noses here at home. In the last nine months, state regulators have exposed illegal movers in Seattle, in Kent, Olympia, Everett, Kennewick, Port Orchard and Spokane.

Before you hire a mover, do your homework:

• Meet the mover’s representative in person
• Get at least two bids written bids, ideally three
• Verify the mover’s permit through the State Utilities and Transportation Commission

• Check online reviews and complaints.

“Go to places like Yelp or Angie’s List and kind of see what people are saying,” Metzger said.

Like he said, when you move out of your home, you’re packing up your life. Your furniture, clothes, photographs, electronics, heirlooms, and irreplaceable possessions. Hire the wrong mover, and you may never see your property again.

Refinance Rates Drop To Record Lows. Take Advantage Now!

We have innovative mortgage solutions for people just like you. The result: unparalleled service and the fastest, easiest mortgage available.

Lower Your Payment!

Take Control of Your Financial Situation!

Get Cash From Your Home!

Keep Your Payment From Rising!

Refinance Your Investment Property!

President Obama’s Loan Modification Plan has opened the doors of refinancing for millions.

Refinance to some of the lowest rates in years, and use the cash to pay off your higher-interest debt.

Make one low monthly payment instead of several. Unlike credit cards, the interest is usually tax-deductible.

Even without perfect credit, we can help. Paying off higher-interest debts faster can improve your credit rating.

Alert – Some Loans May Be Harder to Qualify For And More Expensive Under Possible New Government Guidelines.

*Please consult a Benefits360 Advisor at 425-458-5755 for a free mortgage analysis.

Understanding Mortgage Credit Scores

Your credit report is separate from your credit score, though the score is developed from the report. In addition to viewing credit reports from the three major reporting bureaus, you also should obtain your FICO score. Your score is like a report card. Fair Isaac & Co. (the FICO score keeper) assigns you a number based on the information in your credit report. Since there are three credit-reporting bureaus, you have three FICO scores.

Here are the scoring factors:

Credit Checklist
•Payment history — Have you paid your bills on time?
•Amounts owed — What is your overall debt?
•Length of credit history — How long have you been borrowing money? Lenders like to see a long credit history.
•New credit — Have you applied for new credit?
•Types of credit used — Lenders like to see all kinds of credit types: bank cards, car loans, student loans, and more.

What’s an A+?

The FICO scores range from 350 to 850; an 850 is the Holy Grail of credit scores and 723 is the median score in the U.S., but you can expect good mortgage interest rates at the 720 to 760 level and up.

Also note, if you’re receiving a lot of zero percent credit card or lines of credit offers, you’re probably in pretty good shape.

Homebuyers who pursue an FHA loan, one of the most common loan types for first-time purchasers, can usually secure a loan if their credit is 630 or over.

If you are applying for a “stated income” loan, whereby you forego providing income verification to the lender, the lender will be looking for a minimum FICO score of 680 or higher. Banks don’t like to assume all the risk, so your good credit history is key.

Nearly 80 percent of mortgage lenders use FICO as their means of determining your interest rate and the types of loan you qualify for; as interest rates creep up, this difference can be significant.

Free Reports

The good news is that your credit report is easy to get. A federal regulation gives consumers access to one free credit report per year from each of the three reporting bureaus: Equifax, Experian, and TransUnion. The online report is generated after you answer a series of security questions and only takes about 10 minutes to complete.

Your FICO score is in easy reach as well at www.myfico.com. Each FICO score costs approximately $15, but this expense may save you thousands over the life of your mortgage if you end up with a lower interest rate.

What’s a Good Credit Score?

How do you know what a good score is and what a bad score is? Well, that’s sort of a gray area since different scores are calculated in different ways; different creditors use different scores, and no one knows exactly how they are calculated since those formulas are proprietary to the companies using them. Scores may range from around 300 to 900 with the average credit score in America being at about 740. Here is an approximate range of how credit scores are judged:

Excellent credit = 720 and above

Good credit = 660 to 719

Fair credit = 620 to 659

Poor/bad credit = 619 and below

For more information or to learn how to improve your credit scores, contact a Benefits360 consultant at 425-458-5755.