Fico Scores, Advantagescores and Credit Reports Explained

Hello the is Debra Marie the Tax Queen coming back with another wonderful post
where I will be sharing some helpful information on fico scores, advantagescores and
credit reports.  I will be going over the basics so you’ll have some knowledge when
researching this topic yourselves. So, let’s begin!

You’re probably wondering why you need to know about this stuff. Well when you go to
buy a car, a house or even apply for a credit card this is what the lenders will be
checking. They will be getting you info from three national credit bureaus
(Equifax, Experian and TransUnion) and they compete to capture, update and store
credit histories on most U.S. consumers. The fourth bureau collects what the Big Three
don’t. A range of data falls under the fourth-bureau umbrella, including rent payments,
cellphone and utility bills, magazine subscriptions and gym memberships. But we won’t
talk to much about that one…actually this is all we will talk about when it comes to the
fourth bureau.

So, what are credit bureaus?

A credit bureau is a company that collects and maintains individual credit information and sells it to lenders, creditors, and consumers in the form of a credit report. While there are dozens of credit bureaus across the U.S., most consumers are familiar with the big three: Equifax, Experian, andTransUnion.

Ok, now that you understand the functions of the bureaus it is now time to get to the
juicy stuff…. THE SCORES!  Let’s start with the FICO Score!

What is a FICO Score?

Well first off, FICO is an abbreviation for the Fair Isaac Corporation, the first company
to offer a credit-risk model with a score. Bill Fair and Earl Isaac are the founders.
A FICO Score is a three-digit number based on the information in your credit reports. It
helps lenders determine how likely you are to repay a loan. This, in turn, affects how
much you can borrow, how many months you have to repay, and how much it will cost
(the interest rate).
What are the credit score range?
Credit Score Rating % of People
580-669 Fair 17%
670-739 Good 21%
740-799 Very Good 25%
800-850 Exceptional 21%
THE MOST POPULAR CREDIT SCORE COMPANY YOU MAY HAVE
HEARD OF IS CREDIT KARMA…. BUT HOW ACCURATE ARE THEY?
WELL HERE IS A LITTLE INFORMATION ABOUT CREDIT KARMA

Credit Karma is a for-profit business that makes money by giving you a free credit score
in exchange for learning more about your spending habits and charging companies to
serve you targeted advertisements. Their business model is to earn commissions
off loan products you purchase through its site. Although the site positions itself as a
trusted adviser, its motivation is to sign you up for new loans. Overuse of credit can
have financially catastrophic results. Use Credit Karma to monitor your score–not to
received unbiased advice.

Also, the scores and credit report information from Credit Karma comes from
TransUnion and Equifax, two of the three major credit bureaus.  They also provide
Vantage Score credit scores independently from both credit bureaus.
And because Credit Karma uses only two of the three major credit bureaus, a
consumer’s credit score might not be entirely accurate. Although Vantage
Score’s system is accurate, it’s not the industry standard; the companies that will
approve or deny loan applications are more likely to look at FICO scores.
So, what’s the difference between a Fico score and a vantage score?

Although both the FICO Score and Vantage Score use a credit range of 300 to
850, there are some key differences in how the two scores are calculated. FICO
gives more weight to a consumer’s payment history, while Vantage Score
emphasizes total credit usage and balances.

As mentioned earlier although a Vantage Score’s system is accurate, it’s not the
industry standard. Credit Karma works fine for the average consumer, but the
companies that will approve or deny your application are more likely to look at
your FICO score.

What other companies are similar to Credit Karma and uses
the vantage score.
1. Credit Sesame
2. Quizzed
3. Credit.com
4. WalletHub

Now what’s the difference between a credit report and a FICO
score?

Your credit report contains personal information, credit account
history, credit inquiries and public records. This information is reported by your lenders
and creditors to the credit bureaus. … These four categories are: identifying
information, credit accounts, credit inquiries and public records.
A FICO Score is a three-digit number based on the information in your credit reports. It
helps lenders determine how likely you are to repay a loan. This, in turn, affects how
much you can borrow, how many months you have to repay, and how much it will cost
(the interest rate).

How can I get my credit report?

By logging on to AnnualCreditReport.com, you can check your credit reports for free
once every 12 months from each of the major credit bureaus—Equifax, Experian,
and TransUnion. However, these reports will not give you a credit score.
While you can pay one of the reporting companies for your credit score, you really don’t
have to anymore. There are a number of websites and credit card companies that will
give you your credit score for free.

Here are five free services and five credit card companies that provide credit scores to consumers, along with what each of them offers and how they differ.
Credit Card Companies That Provide Free Credit Scores.

In addition to the services listed above, many credit card companies offer their
customers, and sometimes others, a free look at their credit scores. They include:

1. Discover Card—FICO Statement
Discover Card holders receive their TransUnion FICO credit score for free
on each monthly statement.

  1. Barclaycard—Credit Factors
    Barclaycard customers get a free FICO score on their monthly statements.
    In addition, they can see up to two factors that affect their credit score.
    These might be things like “balances on a bank card or revolving accounts
    too high compared to credit limits”.

3. Capital One Card—Credit Wise
Formerly known as Credit Tracker, Capital One’s Credit Wise service is
available to anyone, whether or not you’re a cardholder with the company.
Through this service, you can get access to your Vantage Score 3.0 every
month and be alerted to any changes in it.

4. First Bankcard—Monthly Lender ScoreFirst National Bank offers its credit card users a free FICO Bankcard Score
9, which is a score tailored to credit card lending. It is not, in other words,
the score a mortgage lender would use when deciding whether you can
borrow money to buy a house, but it will still give you some idea of where
you stand. Your score is updated once a month.

  1. Walmart Credit Card—Electronic Score
    If you’re a Walmart credit card holder, you’ll receive a free FICO score
    each month if you sign up for electronic monthly statements. You’ll also be
    able to see two “reason codes” affecting your score.
    Well I hope you enjoyed our little information session about fico scores,
    advantagescores, and credit reports.  If you are curious or have questions that
    you would like for me to do a podcast on please leave me a message or email
    me at debra@dmtbookkeeping.com or any of my social media platforms under
    dmtbookkeeping.  As always thank you for listening to my podcast and until next
    time …. Bye!

Unemployment Insurance Relief During COVID-19 Pandemic!

Unemployment Insurance Relief During COVID-19 Pandemic!

unemployment

Well let’s start off with the background of the necessity of the new guidelines to the Unemployment Insurance under the CARES Act.  On March 18, 2020, the Families First Coronavirus Response Act (FFCRA), was signed into law providing additional flexibility for state unemployment insurance agencies and additional administrative funding to respond to the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security also known as the (CARES) Act was signed into law on March 27 which helped to expand states’ ability to provide unemployment insurance for many workers impacted by the COVID-19 pandemic, including independent contractors and other workers who are ordinarily ineligible for unemployment benefits.


What is Unemployment Insurance?

Well, Unemployment Insurance is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate UI program, but all states follow the same guidelines established by federal law. Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who are unemployed through no fault of their own. Each state sets its own additional requirements for eligibility, benefit amounts, and length of time benefits can be paid. Generally, benefits are based on a percentage of your earnings over a recent 52-week period, and each state sets a maximum amount. Benefits are subject to federal and most state income taxes and must be reported on your income tax return. You may choose to have the tax withheld from your payment. Also, I’d like to add that this is an employer’s tax that is paid each quarter.

To apply for Unemployment Benefits you must contact your state’s unemployment insurance office .

 

Now let’s get to the questions that I’ve been asked since this bill was passed that relates to the COVid-19 pandemic.

 

I am an independent contractor. Am I eligible for unemployment benefits under the CARES Act?


You may be eligible for unemployment benefits, depending on your personal circumstances and how your state chooses to implement the CARES Act. States are permitted to provide Pandemic Unemployment Assistance (PUA) to individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for regular unemployment compensation. To qualify for PUA benefits, you must not be eligible for regular unemployment benefits and be unemployed, partially unemployed, or unable or unavailable to work because of certain health or economic consequences of the COVID-19 pandemic.

The PUA program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state’s unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act.

 

My regular unemployment compensation benefits do not provide adequate support given the unprecedented economic challenges caused by the COVID-19 outbreak. Can I expect to receive additional relief?


Yes, depending on how your state chooses to implement the CARES Act. The new law creates the Federal Pandemic Unemployment Compensation program (FPUC), which provides an additional $600 per week to individuals who are collecting regular UC (including Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for Ex-Servicemembers (UCX), PEUC, PUA, Extended Benefits (EB), Short Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and payments under the Self Employment Assistance (SEA) program). This benefit is available for weeks of unemployment beginning after the date on which your state entered into an agreement with the U.S. Department of Labor and ending with weeks of unemployment ending on or before July 31, 2020.

 

My employer has remained open because it is essential. I’m not sick, nor is anyone in my household sick.  I do not have children or care for someone who cannot care for themselves.  However, I’m afraid of getting Coronavirus from customers coming to the store, so I quit and filed for unemployment.  Can I obtain benefits under the CARES Act?


No. Under the CARES Act, you may be eligible for benefits if you meet one of the circumstances listed in the Act, but none include the scenario described. On these facts, you are not eligible for Pandemic Unemployment Assistance (PUA) because you do not meet any of the qualifying circumstances.

There are, however, circumstances under the CARES Act in which specific, credible health concerns could require an individual to quit his or her job and thereby make the individual eligible for PUA. For example, an individual may be eligible for PUA if he or she was diagnosed with COVID-19 by a qualified medical professional, and although the individual no longer has COVID-19, the illness caused health complications that render the individual objectively unable to perform his or her essential job functions, with or without a reasonable accommodation. However, voluntarily deciding to quit your job out of a general concern about exposure to COVID-19 does not make you eligible for PUA. If you believe your employer’s response to the possible spread of COVID-19 creates a serious safety hazard or if you think your employer is not following OSHA standards, you can file a complaint with the Occupational Safety and Health Administration.

As a general matter, you are likely to be eligible for PUA due to concerns about exposure to the coronavirus only if you have been advised by a healthcare provider to self-quarantine as a result of such concerns. For instance, an individual whose immune system is compromised by virtue of a serious health condition, and who is therefore advised by a healthcare provider to self-quarantine in order to avoid the greater-than-average health risks that the individual might face if he or she were to become infected by the coronavirus will be eligible for PUA if all other eligibility requirements are met.

 

I was furloughed by my employer, but they have now reopened and asked me to return to my job.  Can I remain on unemployment?


No. As a general matter, individuals receiving regular unemployment compensation must act upon any referral to suitable employment and must accept any offer of suitable employment. Barring unusual circumstances, a request that a furloughed employee return to his or her job very likely constitutes an offer of suitable employment that the employee must accept.

While eligibility for PUA does not turn on whether an individual is actively seeking work, it does require that the individual be unemployed, partially employed, or unable or unavailable to work due to certain circumstances that are a direct result of COVID-19 or the COVID-19 public health emergency. In the situation outlined here, an employee who had been furloughed because his or her employer has closed the place of employment would potentially be eligible for PUA while the employer remained closed, assuming the closure was a direct result of the COVID-19 public health emergency and other qualifying conditions are satisfied. However, as soon as the business reopens and the employee is recalled for work, as in the example above, eligibility for PUA would cease unless the individual could identify some other qualifying circumstance outlined in the CARES Act.

 

One of my workers quit because he said he would prefer to receive the unemployment compensation benefits under the CARES Act.  Is he eligible for unemployment?  If not, what can I do?


No, typically that employee would not be eligible for regular unemployment compensation or PUA.  Eligibility for regular unemployment compensation varies by state but generally does not include those who voluntarily leave employment. Similarly, to receive PUA, an individual must be ineligible for regular unemployment compensation or extended benefits under state or federal law, or pandemic emergency unemployment compensation, and satisfy one of the eligibility criteria enumerated in the CARES Act. There are multiple qualifying circumstances related to COVID-19 that can make an individual eligible for PUA, including if the individual quits his or her job as a direct result of COVID-19. Quitting to access unemployment benefits is not one of them. Individuals who quit their jobs to access higher benefits and are untruthful in their UI application about their reason for quitting, will be considered to have committed fraud.

Now to add to this I would like to focus on the High School and College Graduates when it comes to PUA.

 PUA for High School and College Graduates🎓

Graduation season is rapidly approaching. About 1.2 million high school graduates leave high school each year and do not enroll in college, and about 4 million enrolled in higher education at the undergraduate and graduate level will graduate from their program.

Students who lost a job due to COVID-19 during the academic term and graduate this May or June should qualify for PUA based on a job loss, regardless of whether they had a separate offer of employment starting after the academic term.

Students who were not working during the academic term, or who were working but had a separate employment opportunity planned for the summer, may qualify for PUA if that job offer falls through.

Unfortunately, students who were still searching for post-graduation employment opportunities but are not currently working would not qualify.

https://anchor.fm/thetaxqueen/episodes/Unemployment-Insurance-Relief-During-COViD-19-Pandemic-edf1rc

Debra Marie The Tax Queen Podcast

 

Tax Free Weekends 2019

BACK TO SCHOOL

It’s that time of year again to start that back-to-school shopping spree.

Back-to-school shopping is one of the biggest shopping seasons for most retail stores. Some states like Maryland and South Carolina just to name a few like to help their fellow residents out by giving them what they call a tax-free holiday weekend.  16 states are participating in this tax-free holiday weekend, which means you won’t have to pay sales tax on certain items purchased. For the other states that choose not to participate, I would assume that their thought on this tax-free holiday weekend didn’t sound to economically appealing.

Having 16 states that are participating in this tax-free holiday gives you the option to cross your state borders and go shoppingso there is no need to worry.

Do you know when your state’s 2019 tax-free weekend starts? Well, below you’ll find the information needed to prepare your day for shopping.  There are links to the “Deal News” page for each state to give you more info if needed.  Do your research on lay-a-ways, online shopping and using discount coupons in combination with this tax-free holiday weekend.

Happy Shopping!

Alabama July 19 – 21
Arkansas August 3 – 4
Connecticut August 18 – 24
Florida August 2 – 6
Iowa August 2 – 3
Maryland August 11 – 17
Massachusetts August 17 – 18
Mississippi July 26 – 27
Missouri August 2 – 4
New Mexico August 2 – 4
Ohio August 2 – 4
Oklahoma August 2 – 4
South Carolina August 2 – 4
Tennessee July 26 – 28
Texas August 9 – 11
Virginia August 2 – 4
Wisconsin No tax holiday in 2019

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