Your credit score represents your creditworthiness. A good credit score can help you start a business or get a car loan. However, it also affects many facets of your financial life.
Get on the path to stellar credit with these two tips:
It’s not a complex process, but it is absolutely vital for your financial picture. When you have either a very good credit score or an excellent credit score, it will cost you less to borrow money than if you have a bad credit score. That’s because lenders will see you as a trustworthy borrower. As such, they are more likely to offer you more favorable rates.
A good score grants you near-immediate access to rewards on credit cards that offer cash back opportunities, travel perks, and protection on major purchases.
How does the credit scoring process work?
Additionally, how is your score calculated? Is it possible to establish and maintain good credit? The answers to these questions are below:
A good credit score falls within a range of 300 to 850, where 300 is viewed as a very poor score and 850 is regarded as an excellent score. There are various different credit scoring models, though FICO and VantageScore are the two most popular models. The three credit bureaus—Experian, Equifax, and TransUnion—calculate credit scores by using the two aforementioned credit scoring models.
What’s an excellent credit score? With the FICO scoring model, an excellent score is one that falls between the range of 800 and 850. With VantageScore, an excellent score has a wider range, falling between 781 and 850.
The better the credit cards, the higher the credit score requirement. That is because a good score reaps many benefits and deals in your favor. The better your score, the better your chances of being approved for credit cards of this nature. Also note that card issuers look at income above all, but monthly payments are viewed as well in determining your eligibility.
According to Experian, when FICO calculates your score, this scoring model also takes the following information into consideration:
Your payment history, or whether you pay your bills on time, constitutes 35% of your total credit score.
Also known as your credit utilization rate, the number of accounts you owe, or the total credit and loans you are responsible for compared to your total credit limit, accounts for 30% of your final credit score.
FICO looks at your credit history, which is a time-focused record of how you have managed credit since opening your first credit card. Credit history accounts for 15% of your credit score.
New credit, or how often you apply for and open new credit accounts, constitutes 10% of your credit score with FICO.
Last but not least, you credit mix, or the variety between installment loans and revolving credit accounts, makes up 10% of your credit score calculation.
Obtaining access to your credit score can be tricky
Some credit card issuers, like Citi and Discover, provide free FICO scores to people who have credit cards with these issuers, while other issuers, including Chase and Capital One, offer free access to VantageScore credit scores.
You can get a free credit report from each of the three major reporting bureaus each year, though keep in mind that your credit report is different from your credit score alone. You may access your report through AnnualCreditReport.com, though sometimes, such as during the pandemic, people have been able to obtain their credit report more frequently as a courtesy.
How to build good credit
Make sure you align your actions with your goals. This can take the shape of always paying your bills on time and keeping your credit utilization ratio as healthy as possible. Another option is to ask someone you know if they would allow you to be an authorized user on his or her credit card. Not only is this a low-risk option, but it will also allow you to increase your credit score over time, which is the ultimate goal.
You can also improve your credit score by simply paying your monthly bills on time, including submitting utility payments and and paying your cell phone usage bill in a timely fashion. If you’re already on top of your payments and ensure that you make them on time, feel free to contact Experian Boost, which is one of many ways to elevate your credit score.
In fact, some people who reached out to Experian Boost have witnessed an impressive increase of approximately 10 points. Additionally, you may also think to increase your credit score by opening and activating a student card at college.
Some college student card lenders are lenient when it comes to credit history requirements, as they understand many people seeking this type of credit opportunity are eager to increase their credit score and credit history alike. You must be at least 18 years old to apply for a student card through a college. Many lenders of this nature require that you have a steady income stream as well.
On-time payments are yet another important factor in calculating your FICO score, if not the most important. Maintaining a low credit utilization rate is next in line in terms of importance, as is your payment history. Do your best to minimize the number of new credit applications that you submit. Taking such a simplistic action towards improving your credit score may help you lower your score by five points with ease.
Get into the habit of paying attention to your credit score and taking measures to improve it overall. By doing so, you will significantly impact your financial health, both now and in the long run.
The “estate” you own comprises much more than just physical real estate. Whether you have a modest income or sizeable assets, understanding the full scope of your estate is essential for planning purposes. Let’s delve into the various components of an estate with guidance from a knowledgeable Modesto estate lawyer.
Key Components of an Estate
Real Property: This includes homes, land, and any other real estate holdings you own or have an interest in.
Personal Property: Items like cars, jewelry, furniture, artwork, and personal belongings are all part of your estate.
Financial Accounts: This encompasses bank accounts (checking, savings), investment accounts, retirement accounts (IRAs, 401ks), and any other financial assets.
Life Insurance: The death benefit of a life insurance policy is considered part of your estate if you own the policy.
Business Interests: If you have ownership in a business—whether it’s a sole proprietorship, partnership, corporation, or LLC—it’s part of your estate.
Intellectual Property: Copyrights, patents, trademarks, and other intellectual property rights can also be estate assets.
Digital Assets: In today’s digital age, things like social media accounts, websites, blogs, and digital currencies (like Bitcoin, Robinhood) can be considered part of your estate.
Debts Owed to You: Money that others owe you, including personal loans or business-related debts, adds to your estate’s value.
Why Identifying All Assets Matters
Accurate Valuation: Knowing the entirety of your estate helps in determining its total value, crucial for tax implications and distribution strategies.
Efficient Distribution: Proper estate planning ensures that all assets, big or small, are distributed according to your wishes.
Avoiding Legal Complications: Missing out on any asset can lead to potential disputes or legal challenges in the future.
Getting Help
Your estate encompasses more than you might initially realize. From tangible assets like homes and cars to intangible ones like intellectual property and digital profiles, everything counts. Collaborate with a Modesto estate lawyer to ensure that you have a holistic view of your wealth and a solid plan for its future management and distribution. If you’re ready to get started, reach out to us by calling 209-416-0353 for guidance and peace of mind.
Special Needs Trusts (SNTs) are designed to provide supplemental support to individuals with disabilities without jeopardizing their eligibility for government assistance, such as Medi-Cal or Supplemental Security Income (SSI). However, there are certain expenses that an SNT should not cover. Understanding these can prevent unintentional complications and preserve the trust’s integrity. Let’s dive deeper with insights from a leading Stanislaus County special needs lawyer.
Potential Pitfalls: Expenses to Avoid
While an SNT can cover many life-enhancing expenditures, here are some it should NEVER pay for:
Cash Distributions Directly to the Beneficiary: Direct cash distributions can be counted as income, potentially affecting SSI and Medi-Cal eligibility. Always ensure disbursements are for specific services or products instead.
Basic Food and Shelter: Direct payments for food or shelter-related expenses, including mortgage, rent, utilities, and groceries, can reduce the SSI benefits due to the In-Kind Support and Maintenance (ISM) rule.
Assets That Might Count as Resources: Avoid buying assets that could be counted towards resource limits for government benefits. For instance, multiple cars or property not serving as the primary residence can pose problems.
Payments to Relatives for Basic Care: Compensating a family member for basic caregiving services can be perceived as a gift from the beneficiary, impacting benefits. Formal caregiver agreements, crafted with a Stanislaus County special needs lawyer, can provide a structured solution.
Why It Matters
Maintain Benefits Eligibility: Missteps can jeopardize the beneficiary’s government assistance, often their primary source of support.
Preserve the Trust’s Intent: The trust’s primary objective is to enhance the beneficiary’s quality of life without displacing primary needs covered by government benefits.
Avoid Legal Complications: Unintended violations can lead to legal issues, potential penalties, or a need for corrective action.
Work Closely with a Trusted Stanislaus County Special Needs Lawyer
The nuances of SNTs require an understanding of both federal and state laws. By working closely with an attorney you’ll:
Receive guidance on allowable disbursements.
Ensure compliance with all legal stipulations
Regularly review and adapt the trust in light of changing needs and regulations.
Getting Help
While a Special Needs Trust is a valuable tool for supporting a loved one with disabilities, it’s vital to be aware of the disbursements that could jeopardize their well-being and benefits. Collaborate with a Stanislaus County special needs lawyer to navigate the complexities and safeguard your child’s future. If you have questions or require expertise in crafting or managing an SNT, contact us by calling 209-416-0353.
Designing a trust is a significant move in estate planning, one that provides flexibility and potential tax advantages. Central to the operation of any trust is the Trustee, who is responsible for managing and distributing the trust’s assets as per its terms. Given this responsibility, how financially knowledgeable should a Trustee be? Let’s uncover the answer with advice from an experienced Central Valley trust attorney.
Decoding the Trustee’s Responsibilities
The Trustee’s duties span various functions, from prudent investment of assets to managing distributions and ensuring taxes are filed. Considering these diverse tasks, financial savvy is undoubtedly beneficial.
Assessing the Financial Acumen Needed
Nature & Size of the Trust: If the trust holds complex assets, like business interests or diverse investment portfolios, a Trustee with financial acumen will be better poised to oversee them effectively.
Expert Consultations: It’s vital to remember that a Trustee can always consult financial experts, tax professionals, or a Central Valley trust attorney when specific challenges arise. So, while financial knowledge is an advantage, it isn’t mandatory if the Trustee knows when and how to seek expert guidance.
Trustworthiness & Diligence: Financial expertise aside, the Trustee’s integrity is non-negotiable. They must always act in the best interest of all trust beneficiaries, not just the ones they like!
Organizational Skills: Beyond financial know-how, strong organizational skills can be critical. This helps in meticulous record-keeping, timely distributions, and efficient communication with beneficiaries.
Still Struggling to Choose? Consider These Tips:
Co-Trustees: If you’re grappling with choosing between two potential Trustees – one familiar with your personal wishes and another with financial expertise – think about naming them as co-Trustees.
Clarity in Trust Documents: A well-drafted trust document that clearly outlines your desires can alleviate the Trustee’s burden. Regular consultations with a Central Valley trust attorney can ensure your trust remains current and reflects your wishes.
Open Communication: Engage in open discussions with your prospective Trustee. Gauge their comfort with the role and the prospect of working with professionals when needed.
Conclusion
Choosing a Trustee is a blend of trust, capability, and foresight. While financial insight is beneficial, it’s one of several factors to weigh. Collaborate with a Central Valley trust attorney to align your choice with your trust’s intricacies, safeguarding your legacy and beneficiaries’ interests. If you’re in need of help or have additional questions, we are here to offer guidance and support. Simply contact our law firm at 209-416-0353 to schedule a consultation.
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