Monday, March 31, 2014

How much will a 30-day late payment drop my credit score?

We all try to keep on top of our bills, but every once and a while there’s a bump in the road and we might miss a payment.  Unfortunately, a 30-day late payment will report on your credit report and lower your score.  How much will your FICO drop?  There are a lot of factors that go into it, which we’ll go over here.

First off, if you realize you’re late on a payment call your bank or lender immediately.  It may not be too late to salvage the situation and keep the late reporting off of your credit report.  Different lenders report on different days of the month, so if you are proactive they might work something out to get you paid up.  Some of the bigger credit card companies, for instance, have their own internal systems of late reporting that will keep the issues out of the credit bureau’s site for longer than you may expect.

However, if the 30-day late does hit your credit score, what damage will it do?  There are five major factors to determine how much your score will drop:

1. How long ago did the late payment occur?
Since credit reporting is set up on a chronological metric, recency of late payments are perhaps the biggest factor in score changes.  Simply put, the more recent the late payment occurred, the lower your score will drop.  As time goes on (and you make your payments responsibly) the negative impact will diminish.  All items report for 7 years, but the more recent the late payment, the bigger the hit.

2. How severe were any late payments (30, 60, 90-day late or charge off?)
Of course a 60 or even 90-day late payment is exponentially worse for your credit score than one 30-day late.  Why? Credit reporting is all about gauging risk, and a 60 or 90 shows that instead of an accident or isolated incident, there is some serious financial trouble and your score will drop accordingly.  Avoid a 90-day late payment at all costs.

3. How many accounts have had late payments?
If you only have one account with a late payment or payments, it will hurt your score less than if you have missed payments scattered over multiple accounts.

4. What kind of account is it?
A 30-day late payment on a mortgage loan might hurt you more than on a store retail card with a $200 credit limit.

5. Length of history.
Accounts that are well seasoned – that have been open and in good standing or a long time – will take less of a hit than newer accounts.  Remember that payment history comprises up to 35% of your scoring model so these factors are all important.

With all of that said, here is the direct answer:

If you have a 30-day late on your credit report, your score may drop around 80 points if you’re in the 680 range, or up to 90-110 points if you’re 780 or higher.  Counter to common sense, the better your credit score is, the bigger hit it will take if you miss a payment.

Thursday, March 27, 2014

How to remove a Federal Tax Lien from your credit report.

A federal tax lien is the government’s legal claim against your property if you don’t pay a tax debt.  The lien protects the government’s interest in your property and may include real estate, financial assets, and personal property.  While it has serious financial consequences, one oft-forgotten problem is the negative hit to the person’s credit score, dropping it as much as 100 points.  Even once the debt to the IRS is satisfied and the lien withdrawn, it doesn’t mean the negative reporting will disappear from the credit report – unless you proactively file to have it removed. 

If a Federal tax lien will only appear after you neglect or fail to pay a tax obligation.  In all cases, the IRS assesses your liability and then sends you a bill, called a Notice and Demand for Payment, which details what you owe and why.  If you refuse to pay that demand, a federal tax lien is the IRS’ next course of action to try and collect on the debt.  A Levy is the actual action of making good on the lien and seizing property.  A Notice of Federal Tax Lien will be filed as public document to alert all of your creditors that the government has a legal right to your property, and this Notice will also show up on your credit report.

A federal tax lien is filed with your county and can be on your house, bank accounts, assets, or a “super lien” if you are behind on homeowner’s association fees.  The government can attach liens to your bank accounts, vehicles, and even future assets acquired during the duration of the lien.  They also affect all business property and rights to business property, including accounts receivable.  Unlike other debts, bankruptcy isn’t a quick fix , as federal tax liens usually survive the bankruptcy proceedings.

These aren’t empty threats – in the year 2012, the IRS filed over 708000 Notices of Federal Tax Liens.  But it’s important to understand that the IRS wants to work with you – they would rather a taxpayer calls them and negotiate a payment plan, offer and compromise, or some other arrangement than proceed with liens.  Interesting enough, city, municipal, or state tax liens are probably more serious and financially damaging than federal liens. 

There are serveral ways to get rid of your federal tax lien.  The best, of course, is to pay your tax debt in full.  After that, the IRS will release its lien within 30 days.  But you can also sell property and use the funds to free the lien (Discharge of Property) or the IRS may subordinate so other creditors may move ahead of the lien, making it possible for a mortgage or loan to go through. 

When the lien is cleared up and your obligation with the IRS satisfied, you’ll probably still have the issue of the negative reporting and hit to your credit report to contend with.  Here are step-by-step instructions how to do just that.  Please note: the information above is from the website and always seek advice from a tax professional or the IRS before making decisions.  Blue Water Credit can definitely help you with the credit report part of the equation, so contact us any time for more information.

Eligibility Requirements

Requesting a lien withdrawal after the lien has been RELEASED: Generally, eligibility requirements are:
            􏰀  Your tax liability has been satisfied and your lien has been released
            􏰀  You are in compliance for the past three years in filing:
            􏰀  All individual and business returns
            􏰀  All information returns
            􏰀  You are current on your estimated tax payments and federal tax deposits, as applicable.
Requesting a lien withdrawal after entering into a Direct Debit Installment Agreement: Qualifying taxpayers are:
            􏰀  Individuals
            􏰀  Businesses with income tax liability only
            􏰀  Out of business entities with any type of tax debt
Eligibility Requirements are:
            􏰀  The current amount you owe must be $25,000 or less
            􏰀  If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting the lien withdrawal 
to be eligible
            􏰀  Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the 
Collection Statute expires, whichever is earlier
            􏰀  You must be in full compliance with other filing and payment requirements
            􏰀  You must have made three consecutive direct debit payments
            􏰀  You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an 
improper filing of the lien
            􏰀  You cannot have defaulted on your current, or any previous, direct debit installment agreement
1. You need to fill out the following form:
Instructions are listed on page two of Form 12277 and there is also an example on the following page.
2. Mail in your form to the IRS. * We recommend using registered mail or something that you can track online when mailing in your form.

Fax Number
California Imperial, Inyo, Orange, Riverside, San Bernardino, San Diego Counties
24000 Avila Rd. M/S 5905 Laguna Niguel, CA 92677
Fresno, Kern, Kings, Los Angeles, Santa Barbara, San Luis Obispo, Tulare, and Ventura Counties
300 N. Los Angeles St., Stop 5021
Los Angeles, CA 90012
All California Counties not listed above
1301 Clay St. Ste. 1400S Oakland, CA 94612

Monday, March 24, 2014

Royce White is the most important player in the NBA when it comes to this...

Royce White, forward for the Sacramento Kings, has scored exactly 0.0 points per game in his NBA career, and yet when it comes to one key issue, he could be the league’s most important player.  White finally logged his first minute on the hardwood last week in a blowout loss to the Spurs, registering no stat line.  It was a profound personal victory, finally taking the court 631 days after first being drafted in 2012 by the Houston Rockets #16 overall.  In basketball terms, it was an inconsequential blip on an utter failure of a career (Rockets GM Daryl Morey called him “The worst first round draft pick ever,”) but it’s impact to professional sports and even society is tremendous because of Royce White’s public and contentious battle with mental illness.

When he was a sprouting 10-year old baller, White suffered the first signs of serious anxiety, and during his 2-year stint in college he was diagnosed as generalized anxiety disorder, obsessive-compulsive disorder, and acute panic attacks.  One of his main anxiety triggers is a fear of flying, complicating the proposition of playing professional basketball because of its arduous travel demands - about 98 flights per year, not including playoffs. 

For the most part, he was able to mask his mental health issues during college, to suffer through 20 plane rides for the college basketball season, but there were issues of stolen laptops and shoplifting (though we don’t know if that was due to the illness or just being another knucklehead kid, like many of us are.)  He played one season at the University of Minnesota before departing voluntarily, then enrolled at Iowa State after sitting out the requisite 2 semesters.  At ISU he demonstrated his undeniable basketball talents and physical prowess, averaging 13.4 points and 9.3 rebounds, earning national recognition and multiple awards.

The Rockets drafted the 6’8” rebounding machine with an eye on his production, despite concerns about his erratic past and short college career (which almost every NBA draftee has these days.)  But White never made training camp, embroiled in a battle of miscommunications with the Rockets front office over the details of his condition.  White wanted a medical point person to be assigned to him to ease the burden of his illness, and asked the Rockets if he could purchase a specially designed bus to help him travel between cities so he wouldn’t have to fly.  It never worked out and he was instead sent down to Houston’s D-League affiliate, the Rio Grande Valley Vipers, where he averaged 11.4 points, 5.7 rebounds and 3.3 assists in 16 games last season.

He was traded to Philadelphia in the off season and publically criticized the Rockets, the league, and David Stern, then acting commissioner, saying they didn’t want to deal with the problem of mental illness so they hoped he just “went away.”  White’s basis for requesting special measures to help deal with his condition fell under the Americans With Disabilities Act, a Federal law which requires employers to provide “reasonable accommodations,” to employees with physical or mental impairments.   The ADA is infrequently applied to cases of mental illness, so psychiatrists and medical professionals lauded his insistence on dialogue as emboldening to other pro athletes that suffered in silence.  And if it’s socially acceptable for your favorite basketball or baseball player to admit they have a medical issue and deal with it in a healthy, proactive manner, then certainly why can’t fans, young people, and the general population?  I

In fact, mental disorders are the leading cause of disability from ages 14-55, and according to the National Institute of Mental Health, 26.2 percent of American adults meet criteria for a diagnosable mental disorder each year.  Of those, about 18 percent have an anxiety disorder.  That’s 1 in 4 people who may need help or could be treated for a better quality of life.  For every suicide we read about, for every kid who turns to drugs to sate their internal demons, for every school shooting that shatters our perception of normalcy, there’s a mental health issue begging to be treated.

Philadelphia cut him before the season and he didn’t play until the Kings took a chance on him.  Out of playoff contention and nothing to lose by gambling on a talented, but enigmatic young player they could get for almost nothing, they signed him to two 10-day contracts.  He first played for their D-League (Developmental League) affiliate, the Reno Bighorns.  The Kings liked what they saw so they signed him for the rest of the season. 

“This whole process between Royce and the Sacramento Kings is about him as a basketball player,” coach Mike Malone told the Sacramento Bee. “He did everything that we asked him to do up in Reno. He’s been tremendous while he’s been in Sacramento. No problems at all. No worries from our standpoint as a coaching staff. We’re going to expect him to do what everybody else is expected to do. Show up on time, work hard, pay attention, be disciplined and buy in to what we’re trying to do. He appears to be ready, willing and able to do that.”
So far - a few practices and one minute of one NBA game in - it’s been a healthy marriage.
“Had a great time at my first full practice with the Sacramento Kings,” White tweeted. “Great guys! I’m excited and appreciative to be working here.”
White insists his main focus is still on playing basketball for the love of the game but he’s still been an outspoken advocate for mental health awareness and treatment - his mere presence on the court, or a team’s roster, forces that organization, and the NBA, to deal with it. 

“If I was an NBA player now without the protocols and safety measures,” he said, “I would be risking my health, risking my life. What comes along with mental health if left untreated? Alcohol abuse, marijuana abuse, suicidal behavior, homicidal behavior, those are things I’m not willing to risk to play basketball, to have money, to have fame. That’s it.”
White holds no grudges or points blame at the Houston Rockets for the alleged mishandling of his condition, but it’s apparent they weren't ready for it.  How could they be?  The league has hundreds of pages of documents and memos, policies and procedures, how to handle a player with a broken leg, back spasms, or even who gets arrested for drunk driving, but very little in place to diagnose or facilitate treatment for players with mental health issues.  

The personal, nebulous, and often unseen nature of mental health problems make them difficult to properly diagnose and treat, but there’s also a stigma in our society that’s counterproductive.  This is especially true for men, and magnified ad infinitum for professional athletes who are supposed to be big, tough wrecking balls devoid of emotions - reserved for the weak and soft.  In a game where your perception as a team player and a “gamer” versus a malcontent can earn – or lose – you millions of dollars on your next contract, 7-foot centers and 300 lbs. lineman rarely want to admit they even have emotions, yet along mental health issues.  However, “Suck it up,” or “Rub some dirt on it and get back in the game,” are not mantras that work to placate disorders of the mind.

Yet pro athletes are under unimaginable pressure and suffer from a sense of isolation because of their stature, sometimes from a young age.  Often, their fear of abandonment, anxiety, self esteem issues or inability to deal with anger or loss translates to a better young athlete, as their only channel is to play sports.  Their only reprieve from personal hell is sometimes the heaven of practice, when the mind is ‘shut off’ and physical instincts take over. 

Mahmoud Abdul-Rauf, a now-retired NBA player who had great success with Denver, Vancouver, and even these Sacramento Kings over a 11 year career, suffered from Tourette’s syndrome, which isn’t a mental health condition but a neurological illness, but is often accompanies by OCD-like tics and tendencies.  As a poor child in Louisiana (Chris Jackson then, before changing his name years later,) the basketball court was as his only outlet of relief.  Out there, the repetition and perfection OCD demanded were rewarded.  He recalls shooting baskets and not physically being able to leave the court until he swished 20 shots in a row, or hit 100 free throws in a row.  If he even hit rim on one of them he’d have to start from scratch – not a choice, but an irrational compulsion.  The end result was a hell of a basketball player but a human being left in torment, serially under-treated for his condition.

So, too we see NFL players suffering the effects of mental illness, especially depression, often after it’s too late.  Alcohol abuse, addiction to paint killers, bipolar disorders, domestic abuse, suicides, and the ever-concerning evidence of concussions causing brain injuries is a massive elephant in the pro football room.

Tony Dorsett’s tragic case of post concussion syndrome has been highly publicized, and Terry Bradshaw, the enigmatic Pittsburgh quarterback and now TV analyst, suffers from severe depression and memory loss from his playing days.  His teammate, Mike Webster, died of complications from CTE, a degenerative condition previously associated with boxers that cursed him with a painful existence of severe depression and bipolar disorder.  Just this season, the Miami Dolphin’s Jonathan Martin exposed a scandal of physical intimidation, extortion, and harassment before leaving the team with emotional distress.  Richie Incognito, by all accounts his tormenter, now acknowledges he’s got serious mental health issues and is seeking treatment.

Go down the long list of NFL arrests and infractions and a disturbing number have undiagnosed or untreated mental health problems as their root – from Jovan Blecher, who shot his girlfriend and then himself last offseason, to Ricky William’s well-chronicled battle with social anxiety disorder, to Junior Seau, the bright and shining superstar with the San Diego Chargers who took his own life less than a year after his career ended.  His suicide shocked the NFL world and sparked an open dialogue about the emotional and mental problems player’s face.

Chicago Bears wide receiver Brandon Marshall, who suffers from social anxiety disorder, summed it up in a heartfelt op-ed piece for the Chicago Sun-Times, stating that he believes treatment would have saved Seau’s life. 

"There are many people out there who are suffering and have nowhere to turn for help,” wrote Marshall, “or are afraid because of the stigmas placed on mental health.”

A recent study by the University of Texas found that the acute and physical manifestation of symptoms of mental illness were much more likely in football players as they got older because of concussions, each a minor brain injury by definition.  The NFL has been accused of sweeping the medical data about concussions, brain injuries and mental illness under the rug, and last August agreed to pay more than $765 million to settle concussion-related suits by about 4,500 former players, though they admitted no wrong. 

Whether it’s from hits to the head, childhood trauma, or the pressure cooker of emotional demands on a young athlete, disorders of depression, anxiety, bipolar, and OCD behavior are exponentially higher in professional sports – yet still rarely acknowledged or treated openly.  The NBA has plenty of its own documented cases - GIlbert Arenas, once a superstar for the Washington Bullets, fell from basketball grace due to crippling depression.  Paul Stiemsma, a little-used 26-year old center with the Celtics and now the Timberwolves, has suffered from medically diagnosed depression since his college playing days and publically advocates for mental health. 

But there’s no greater testament to the call for mental health awareness in the NBA than it’s patron saint, Jerry West, himself.  The man whose silhouette adorns the NBA logo is on record as suffering from severe depression his whole life.  He grew up in a terribly abusive household and his relentless pursuit of perfection on the court was just an offshoot of mental illness issues engrained by the trauma.  He went public with his lifelong battle and the dark places it’s taken him, despite his family’s reservations.

Very soon, Royce White will score a point in the NBA.  And then, a lot of points. He’ll grab more than a few rebounds and hopefully become a major contributor for the Sacramento Kings, maybe even by the time your read this article.  Of course we hope he’s remembered for his impact as a basketball player, not defined by the medical issues he’s living.  But for now, at exactly 0.0 points per game - persona-non-grata in the NBA record books - he stands at perhaps the prefect point for us to recognize his mission of awareness and treatment of mental health, in the league and in our society.  To those tens of millions of Americans who suffer in silence, who seek a candle of relief not just from the darkness of their illness but from the stigma it beholds, Royce White remains the most important player in the game.  For that, let us stand up and applaud. 

Thursday, March 20, 2014

How many credit reporting agencies are there? If you said 'three,' you're way off!

If we asked most Americans how many credit bureaus there were, their answer would almost always be, “three.”  A good number of people could probably even name them as Experian, Equifax, and Transunion, and feel proud of their knowledge of the credit industry.  But very few people realize that there are actually a multitude of credit bureaus reporting your every mortgage, credit card, and occasional late payment, more than 35+ lesser-known ones at last count. 

Why are there so many?  Some of them replicate the scoring models and functionality of the big three, while others serve specific esoteric niches in the financial market.  It’s estimated that up to 50 million Americans have little or no data reporting with the major credit bureaus, so alternate reporting services help credit-light borrowers to qualify for basic loans or services, like utilities, cell phones, and rental housing.  Business loans, employment hiring decisions, and insurance coverage are all affected by what’s on your credit report, but better served by alternate reporting agencies.

For instance, payment information from your medical records is a totally separate form of credit, and businesses have their own commercial credit score.  Bank accounts, bankruptcies, liens, rent-to-own companies, pay-day lenders, subprime auto loans, check fraud, courthouse information, day care payments, and billing from club memberships are even documented by alternative credit reporting agencies. 

For most people, three reporting agencies keeping tabs on their every financial move is more than enough, but if you have an issue with something more than just mortgages, credit cards, and installment loans, you might want to check into what these alternate reporting agencies are saying about you.  Just like with traditional credit score, there’s usually a process for disputing incorrect items or engaging in certain responsible financial behaviors to raise your score. 

Here’s a rundown of some of the alternative credit reporting agencies.  They are under headings but any of these agencies offer reporting on several and overlapping types of reporting, so contact us if you need clarification or need help. 

Banking and Check History CRAs: 

Certegy Check Services

Payday Lending Reporting Agencies:
Factor Trust 

Clarity Services 

CL Verify Microbilt

Auto and Property Insurance Reporting Agencies:
Insurance Services Office (ISO) (A Plus Property Reports)
Insurance Information Exchange
L.N. (Clue Personal Property Report)
L.N. (Clue Auto Report) 

Supplementary/Alternative Credit Reporting Agencies:  CoreScore Credit Report
Pay Rent Build Credit (PRBC)/Microbilt
ID Analytics
Lexis Nexis Screening Solutions. Inc. 

Fico Expansion Score

Utility Credit Reporting Agencies:
National Consumer Telecom and Utilities Exchange 

Rental Reporting Agencies:
Core Logic SafeRent 

LexisNexis Screening Solutions Inc. Resident History Report
Leasing Desk (Real Page)

Tenant Data Services and Medical Reporting Agencies: 

Medical Information Bureau

Employment Reporting Agencies:
Accurate Background
Contemporary Information Corp. 

Early Warning Services 


First Advantage
Trak 1 Technology
Verifications Inc.
The Work Number