Category Archives: debt reduction

United States taxes and facts

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united states taxes facts

united states taxes facts

Every state has its own tax rules. Usually the tax decisions base upon the economical conditions of a state. Governments decide the taxes policy in view of this consideration. The best way to analyze the tax conditions of a certain place is by comparing the tax rates of different states. The following gives an insight into US tax system.
A comparative analysis of US taxes rates
Alabama is one of those states that have very low per capita tax. Moreover, it has low property taxes as well that makes $1801 per person. However, beer drinkers do not get a concession in this state and one has to pay $1.05 per person. The main source of income for Alaska is from gas and oil industry. Therefore, it has high corporate taxes. The revenue income of the people is also relatively high, they have to pay a high amount of property tax and that is about $1865 per person. The beer taxes of Alaska are the highest in the nation that is $1.07. Arizona has per capital tax total of about $3006.
The accumulated tax conclusion for Arizona is that it has low property taxes, but the sales taxes are comparatively higher and the transaction privilege system for taxes is responsible for this. Arkansas draws its maximum revenue through its sales, income and property tax. California has the highest income tax rate of 13.3 in the whole nation and there has been a significant increase in the Sales tax as well. Colorado is one of the few states that have tax rates for social security income and it has planning to bring in taxations rules for Marijuana use as well. Connecticut has taxes according to the high income of the resident individuals. Delaware experienced a tax rate decline in the 2011 and the tax rate fell down to 6.75%. However, the taxation rate became stable afterwards. The good news for Florida residents is that is a no income tax state. Hawaii holds the second highest position in the country when it comes to income tax.
Tax Foundation gives Idaho the 10th ranking when it comes to tax excisions. Illinois is also becoming one of the tax conscious states with a significant increase of 5% in the income tax. Kentucky has one major achievement to its credit and that is it has been able to make twenty seven thousand delinquent taxpayers as tax compliant. Louisiana has a huge mission. It wants to eliminate the income tax and raise the sales tax levels. Maine is one state that is very conscious about collecting property tax. Maryland follows one simple rule that if an individual has an income above 100,000 or 150,000 he will have to pay a raised income tax. Minnesota plans to bring many of the untaxed services under taxation. Mississippi does not charge any tax on retirement income. Tobacco users residing in Missouri can be very happy because the state has the lowest cigarette taxes. Nebraska is one state that has the highest taxes for cell phones. Nevada has no rules for taking tax on personal income. New Hampshire is very famous for having very low tax rates.
New Mexico does not have any taxation rules for inheritance and has very low property taxes. New York has one of the highest tax burdens. North Dakota is famous for a high collection of severance tax. Oregon has one of the highest income tax rates. South Dakota, Wyoming and Tennessee do not have taxation rules for income. Texas major source of revenue is through its taxation. Washington does not have taxes on income, but it has high estate tax.
Conclusive statistics
The mentioned points explain the facts regarding the taxes in US. Tax Foundation analysis forms the basis of property taxation statistics. Seven states of US have no income tax. Washington DC and sixteen other states have estate taxes. Eight states have inheritance tax.

Things that you may not know about your credit score

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credit score influence

credit score influence

The credit score is used since the 1980s as an algorithm to check the consumers risk by the lenders and banks.
Because of this algorithm and the methods used to calculate it, most of the customers are having wrong conceptions about how they can keep their credit scores in good shape.
At this moment the average credit score in U.S. is around 660 with many people having low credit scores which also includes problems to get approvals for getting a loan, a mortgage and credit cards.
For a better understanding of the credit score you need to also understand the following points:

1) Because there are many methods to calculate the credit score based on each industry (for example the credit bureaus can calculate different credit scores for a mortgage lender and for a payday loan lender), the FICO score is the most important but even so the score can differ with some points.
2) Use credit cards to keep your good credit score. When you have a credit card and you pay in full every month your credit score will increase. This can be also achieved by an installment loan (for example a mortgage). Try all kind of credit types and try to pay them on time so you can increase your credit score.
3) The credit score can decrease or increase everytime there is a change in your credit report. For example the credit bureaus are updating the credit reports every 30 days for credit card issuers but this can also be updated immediatelly if a hard inquire is made.
4) Check your credit score to see if is good or bad. A credit check can be made in two different situations. When you just check your credit score and this will not affect your rating and when you apply for a mortgage or credit card and your provider will require a credit report. Anyway, it’s a good idea to keep track of your credit score evolution.
5) If you have a perfect credit score then is also required to be careful in time because now your rating can decrease quicker. For example if you have a credit score of 750 and a friend of you has a credit score of 650 and both have a 30 days late payment, your credit score will decrease more than your friend credit score.
6) Many of you have the wrong belief that your credit score will influence your job opportunities. Indeed they will look at your credit report to see your credit history but this can’t be made without your approval. This is why keeping an eye on your credit score can help you a lot.

What is FICO score

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fico score

These days your credit score is very important and we all know that when it comes to out finances. The FICO score has appeared in the 1980’s and it comes to help some companies to know the credit risk of a certain person based on her credit history. Fico name comes from Fair Isaac and Co, company qhich has developed a special software do calculate the credit risk. The FICO score can range from 300 to 850.

Credit Score vs. Credit Report
A credit score is totally different from a credit report and this is because your credit score depends on your credit report. The credit report contains your credit history with informations like:

  • Current credit accounts
  • Payment history
  • Credit utilization
  • Credit inquiries
  • Bankruptcy

Usually your credit report will cointain your credit history for the last 7 years but in the same time if you Have a bankruptcy it will stay in your credit history for up to 10 years. It is advisable that you require a free credit report each year so you can make sure that everything is fine.
The FICO score is not a part of your credit report even if generally is based on your credit history and the credit bureaus will always calculate your FICO score based on what they have on file from your credit hostory. As you can see this means that you can have up to 3 FICO scores which are totally different in the same time.

Credit Score – How is Calculated?
When calculating your credit score some parts of your credit history are more important than others and they will have a bigger influence on your overall score.
The FICO score contains:

  • Payment History – 35%
  • Total Amounts Owed – 30%
  • Length of Credit History – 15%
  • New Credit – 10%
  • Type of Credit in Use – 10%

From here you can see that having a good payment history and no debt can heavily improve your FICO score.

Why FICO score is so important?
Your FICO credit score is important because it will be there for your entire life and everytime you want to borrow some money, look for a mortgage, buy a car those companies will first look at your FICO score and then decide if they can help you our not.
When borrowing some money your FICO score will also be an important factor on how much you can borrow and how much you need to pay in return. This is because if you have a good credit score you don’t present a huge risk and you can receive very low interest rates.
This can be very tricky because if you credit score is not good and the interest rates will be high then you’ll pay a lot just on those fees.

Improve your credit score
If you already have a low credit score you don’t need to worry because you can improve it in time. The update for your credit score is made every month so any improvments made this month will have a positive result next month. The only bad thing is that all the info will be keeped in your credit history for 7 years.
Most important things to be done to improve your credit score:

  • Make all the payments on time
  • Reduce your debt

How to reduce debt

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debt reduction

debt reduction

Plan your finances and get professional counselling
You alway need to make your monthly budget and follow it. In the end all the extra money you can use them to pay your debts. The only important thing is to really stick with your budget and you’ll have a good chance to lower your debts but also to lower your interest fees.
It also possible not to know exactly if you can save any money and in that case is better if you get some professional counselling.

Try to combine your debts
Taking a debt consolidation loan can always be a good choice. This means that you’ll take a loan from a provider (usually a bank) and they will repay all you debts to your creditors. After that you’ll need to return the loan but you’ll have just one monthly payment to do and also your interest fee will be smaller.

Talk with your creditors
Call your creditors and try to renegotiate your payments. You can talk with them about:

  • Lower your monthly payments
  • Extend the period of time to make your payments
  • Talk about a lower interest rate

If you don’t want to talk with them personally you can also hire a professional debt management counsellor.

Sell a possession
Sometimes selling a one of your possessions can help you to escape debt. If you don’t have any other choice then this a quick and easy solution.

Always make your payments on time
Start paying your monthly fees on time. It is always a good start to reduce your debt or at least to stop going to even more debts. All the late fees that you pay when a deadline pass you can use them to reduce your current debt.

These are just a few tips about how you can start to reduce your debt.

Financial Benefits About Which You Don’t Know

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pension cash savings

We all know about things like IRAs, Medicare, employer retirement plan or Social Security but there are also more financial benefits for which you have already paid for through your taxes or when working for a particular employer and there are just some people knowing about these benefits.

1) Financial Benefits from Lost Pension
Right now there are around 35,000 people with an unclaimed amount of almost $197 million when it comes to pension benefits.The pension plans are partly insured by the Pension Benefit Guaranty Corporation (PBCG) so you should call them to check if you are part of this program.

2) Get Financial Benefits From Previous Jobs Retirement Accounts
At this moment half of the americans have left their retirement plans with the previous employers and most of them don’t even know that this type of account ever existed.Usually this is because of lack understanding from beneficiaries but also because the employers didn’t keept their people updated about the retirement plans.To avoid this kind of problems you should consolidate yout previous retirement acccounts into your current employer plan or even into IRA.

3) Spousal Social Security Benefit Windfall
You already know that if you can apply for Social Security and you can do it before your normal retirement age and here you have two options.One is to get your benefits and second is to get just half of your spouse benefits.
What most of you don’t know is that there is even a third option and this is to get them both (your Social Security and half of your spouse benefits).To do that you need to wait until your full retirement age and have your spouse already applied for a Social Security benefit.This way you can take a spousal benefit while alowing your own benefit to grow until the age of 70 and in the end choose the higher benefit.

4) Survivor Benefits from Social Security
All of us think of Social Security as being just a retirement program or even a disability program but just few of you think about the Social Security as being an life insurance program.
Right now the Social Security is not mailing anymore the annual statements but you can see how much your family will can take just by visiting their website.Your family survivors can be able to collect even thousand of dollars after you.This thing also applies for your spouse and for minor childrens.

5) Stock Purchase Plan Discounts For Employees
Check if your employer offers a discount program when you purchase their stock.These discounts are usually up to 15%.After a while you can sell that stock and use the financial benefits as you wish.You should also know that you can keep the stock for at least two years and then get some tax benefits from it.

6) Get Estate Planning Documents For Free Or At Low Costs
If you don’t have already a health care directive, a will or even a power of attorney you can always get them for free.
Go to your hospital an there you can get the health care directive or just download a state-specific form directly from the National Hospice.There are also a lot of websites offering many legal documents for free or at low costs and u can get a power of attorney in no time.

7) Get Financial Benefits For Your Retirement Account Using Low Cost Or Free Investments
At this time there are any employers offering low cost access to guidance, investment management and advices for their employees.You can earn more than 2% per year in your account and even this is not very much you should know that the amount will increase your savings until your retirement age. You can save even 100% more until the age of 65 than you’ll save without professional help and this is of course an important amount.

How To Improve Your Credit Score

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improve credit score

We all keep seeing advertisements which are saying that quickly improving your credit score is not possible but we also know that one of the most important factors for your credit score is credit utilization.Credit utilization is a total balance which is divided by total creditlimit and as you know you have a lot of control over it so it is possible to increase or decrease this total credit limit.
How we can improve our credit score quickly? Read our next advices and see what you can do.

 

Request a Credit Line Increase
Some credit card issuers offer you the option to request an increase for the credit line and this way you can extend your limit.They also can offer you an increase without making a credit inquire and this a good chance for you to take it.
Anyway, if they require additional informations from you then you can cancel your application because if they take your credit to be a part of the increase that you requested then your credit score will go lower than it is.

Pay Off Debt
While you pay your debt you also improve your credit score because you lower the amount owed.

Charge Less
By using your credit card less you can always boost your credit score because you’ll keep your credit statement balance lower and this way your credit utilization will go down.

Consolidate Credit Cards
You can always increase your credit lines age without reducing your total credit limit.This is the case if you have more cards from the same issuer and you can consolidate the new cards into the older ones just by calling the issuer customer service.Make sure you do this only if they assure you that your credit limit will stay at the same level.

Review Your Report for Errors and Omissions
Is good to review your credit report to see if there are any errors or even omissions.You can make sure you have all your account added there and if you see anything marked as negative and you think is not because of you then you can also dispute the problem and remove the mark.