The Lowdown on Those Free Credit Scores

The Fair and Accurate Credit Transaction Act of 2003 provided individuals with valuable rights to the credit information that companies keep on them, but did you know the credit score provided to you may be different from the one provided to lenders?

The first thing you should know is that you have a right to see your credit report once annually without cost. To receive your free credit report you can visit www.AnnualCreditReport.com. This report will contain important information that may affect your credit score.

While your credit report can be obtained for free, your credit score will cost you money, except if you have been denied a loan on the basis of your credit score, in which case you may obtain your credit score for free.

Your credit score is a numerical representation of your creditworthiness, which takes into account past and current credit activities, including any late payments, judgments, liens, bankruptcies and foreclosures.

When you see an offer for getting your free credit score, it may be a marketing-driven incentive to get you to sign up for a fee-based credit monitoring service. The score may be only available at no cost if you agree to sign up for a trial subscription and don’t cancel prior to the end of that trial period.

The Dirty Little Secret of Credit Scores

Before you purchase your credit score, understand that the methodology used to calculate the score you buy is different from that used to determine the credit score lenders receive.

There are hundreds of methods for calculating an individual’s credit score, and many lenders use private models with proprietary outcomes. Still, the correlation between the various possible scores is high (90%), says the Consumer Financial Protection Bureau. In other words, a “good” credit score by one standard will likely also be “good” by another.¹

While knowing your credit score may be important, it may be more vital to review your credit report to correct any errors that may be hurting your score and take the necessary steps to improve your credit profile.

  1. WalletHub.com, June 22, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Strategies For Managing Student Loan Debt

If college were a party, then student loans are the hangover.

Unfortunately, the “hair of the dog” won’t cure this headache, but here are some ideas for managing your student loan debt.

The programs listed are not intended as tax or legal advice. They may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The programs are for informational purposes only, and should not be considered a substitute for a more comprehensive student loan evaluation.

Income-Based Repayment Programs — If your payments on eligible federal student loans are in excess of 15% of your earnings above 150% of the poverty level, you may be eligible for an income-based repayment program. Under this program, your outstanding loan balance may be forgiven after 25 years of qualifying repayment.

Another program, Pay As You Earn (PAYE), also caps repayments based on your income and will forgive outstanding federal student loans after 20 years. Under PAYE, payments must exceed 10% of what you earn above 150% of the poverty level, under a standard 10-year repayment plan.

To be eligible, you must have taken your first federal loan after September 30, 2007 and at least one loan after September 30, 2011.

Public Service Loan Forgiveness — Certain federal loans may be forgiven after 10 years of qualifying payments if you take a job with federal, state, or local government; a non-profit; or other public service organizations.

Volunteer — There are a number of programs, such as AmeriCorps, Peace Corps, and the military, in which service will accrue a benefit that reduces an outstanding loan balance in an amount that varies depending upon the program.

Pre-Pay Principal  Pre-payment of principal may help lower the lifetime interest costs of a loan. To raise cash to fund pre-payments, one idea is to ask that birthday and holiday gifts be cash to put toward pre-payments. You could also direct any raises, bonuses or overtime pay to pre-payments. If you do pre-pay principal, be sure to target the loans with the highest rate of interest.

Loan Consolidation — You can consolidate your federal loans through the Direct Loan program, or through a private lender if you have private loans. However, this may only make sense if you can obtain an overall lower interest rate.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Planning for the Expected

Perhaps Bette Davis said it best when she observed, “Old age is no place for sissies.” ¹

The challenges seniors have met throughout their lives have made them wiser and stronger, preparing them for the unique challenges that come with aging.

As we age, the potential for cognitive decline increases, ranging from simple forgetfulness to dementia. Long-term illness can sap time and energy from tending to your financial affairs in retirement. Even a decline in vision may make it harder to manage your financial affairs.

Fortunately, you can plan ahead to protect yourself and your family against the financial consequences of deteriorating health, and in many cases, insurance may play an important role.

Let’s examine some of the ways you can employ insurance to help protect your
financial health.

Health Care Costs

For some, health-care costs represent a larger share of their budget as the years pass.

Recognizing this, you may want to consider Medigap insurance to cover the expenses that Medicare does not, which can add up quickly. You also might want to consider some form of extended-care insurance, which can be structured to pay for nursing and home-care services—two services that Medicare doesn’t cover.

Managing Your Wealth

The involvement you have with managing your investments may change as you age. For many seniors, that sort of day-to-day responsibility is unattractive and even untenable.

If that’s the case, you may wish to consider what role annuities can play. Annuities can be structured to pay you income for as long as you live, relieving you of the concern of outliving your retirement money.² Certain annuities even offer extended-care benefits, which allow you to address two concerns with one decision.

Transferring Your Estate

If you’re like many seniors, you have a strong desire to leave something to your children, grandchildren and perhaps a favorite charity. Through the use of life insurance, you can pursue these objectives. For example, life insurance can be used to create an estate or to equalize an estate transfer among your heirs.³

Insurance will never be able to prevent the health issues that come inexorably with age, but it can be used to mitigate the potential financial consequences of them.

  1. BrainyQuote, 2015
  2. The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).
  3. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.