Focus on Security Deposits

U.S. Security Deposit Requirements for Renters with Less Than Perfect CreditPart 1 of 3 in a series looking at challenges for renters with less than perfect credit via Credit Sesame.

U.S. Security Deposit Requirements for Renters with Less Than Perfect Credit

In the first half of 2015, average apartment rents in the United States were estimated to increase 5 percent, continuing a multi-year trend of rent increases in most major metros across the country. While unemployment had dipped down to 5.1 percent by the mid-year mark, wages remained relatively flat. As a result, housing affordability for the 65 million Americans that opt for rental housing has become a greater financial burden, particularly for the large numbers of individuals and families for whom rental screening results in requirements for increased security deposits as a supposed means for rental communities to offset future payment risk associated with lower credit scores.

Rent increases naturally follow from broader market demand for apartments and apartment investors have continued to benefit from depressed home sales resulting from the recent recession. But when rent growth widely outpaces wage growth, greater numbers of would-be renters find it more difficult to qualify for an apartment lease that is—in essence—an annual financial obligation representing thousands or tens of thousands of dollars. In fact, rent often represents the largest and most significant monthly bill payment that working Americans strive to make.

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Study: Consumer debt growing in some American urban centers

An interesting article regarding the results of a recent study analyzing and comparing the current personal debt levels and credit scores of Americans in different cities.  

A recent Credit Trends study by credit reporting company (CRC) Experian analyzed current personal debt levels and credit scores for residents of the 20 most populous metropolitan areas in the U.S. Of the cities examined, Detroit residents had the lowest average debt ($23,604), while Dallas residents had the highest ($28,240).

The study also compared the current debt levels to those of four years ago and found that Detroit had decreased its average personal debt by 7.1 percent, while Dallas’s average personal debt amount increased 7.8 percent since 2010.

San Diego residents had the highest rise in average personal debt, an 11 percent increase from $23,797 in 2010 to $26,423 in 2014. Nationwide, average debt increased 5 percent to $25,927, compared with $24,678 four years ago.

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5 Ways to Get Things Off Your Credit Report

Need to work on repairing your credit? Need to know how and where to start? Here’s an extremely informative and helpful list of ways to remove negative information from your credit reports.  

Negative information on your credit can be extremely frustrating. You know it’s not good, and you just want it to go away. Before you pull your hair out or spend thousands of dollars trying to repair your credit, you’ll want to understand the ways this kind of information can be removed from your reports.

First, find out exactly what you’re dealing with. You can’t fix what you don’t know about, so you need to get your credit reports (here’s how to get them for free) and your credit scores (which you can get for free at so you can see how these items may be affecting your credit.

If your reports do contain derogatory information, here are five ways to get it removed.

1. Wait It Out

Over time, negative information can no longer be reported. The limit is usually seven years, with some exceptions:

Collection accounts may be reported seven years plus 180 days from the date you first fell behind with the original creditor (such as your credit card issuer) leading up to when the account was placed for collection.

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Did You Know Credit Scores and Credit Reports are Not the Same?

Did you know that a credit report is not the same thing as a credit score and vice versa? Read this article to find out how.  

Credit report and credit score are synonymous, right? Not so fast. A credit report is not the same thing as a credit score, and a credit score is not the same thing as a credit report. It’s not even close.

The Fair Credit Reporting Act (FCRA) clearly defines credit report and credit score as two different items. A consumer report, of which a credit report is an example, is defined by the FCRA as “any communication of any information by a consumer reporting agency indicating a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for credit or insurance to be used primarily for personal, family, or household employment purposes, or other permissible purposes.”

A credit score is defined by the FCRA as “a numerical value or a categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors, including default.”

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How to Get Your First Credit Report

Woman builds up credit report score ratingAre you worried about your credit or simply just want to stay updated on what’s going on with your credit? Here is a great article for students or anyone else new to credit reports.  

Students: Are you worried about your credit history? Wishing to stay up to date on your credit profile? Wondering what your credit report reflects? Your answer should be “yes.” Credit reports play an essential role when making purchases that involve a loan or even when applying for a job. Many companies look at your credit reports to check up on your credit history. If you are not making bill payments, your account is subject to being reported as a delinquent account—that is, an account past due. This damages your likelihood of being approved for a loan, or of getting a loan at a decent interest rate.

You don’t want to find yourself in this predicament, which is why it is important to expand your financial capabilities now. This is why I—a college student and novice at handling my own finances and loans—decided to view my credit report online at Consumer Reports recommends using this site because it’s truly free and run by the three credit-reporting bureaus: Experian, TransUnion, and Equifax. This authorized website offers credit reports at the click of a button. All you have to do is type in your personal information, answer a few questions to verify your identity, and select which credit bureau you wish to use. You’re entitled to a free report from each credit bureau, once a year.

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What Happens If I Never Pay an Old Debt?

Wonder what will happen if you simply do nothing about an old debt? This article will answer your questions.

Maybe you can’t pay. Or maybe you won’t pay. Either way you have an old debt hanging out there. What if you just decide to let it go, and do nothing about it? That’s what reader Dave, who says he can’t afford to pay off the old debts he owes, asks:

My credit card debt is roughly $12,000. I consulted a bankruptcy attorney. He said filing bankruptcy should not be my first option since the amount is quite low. And the collectors have stopped calling. In California, is there a 3 or 4 years of limit by which the collection agency can file lawsuit? After that time, they can’t sue? Then what happens? Can they still collect but not sue? Debt still stays on credit files. If they can’t sue me since it’s about 4 years since [it] went into collection and the attorney said filing may not be good idea for such small amount, then what?

Dave’s question is hardly unusual. Plenty of people wonder what will happen if they simply do nothing about an old debt.

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Do Free Credit Scores Hurt My Credit?

free-credit-scoreYou want to check your free credit scores and reports but you might be wondering: Will it hurt my credit? This article can help!

Sometimes trying to do the right thing for your finances has unintended consequences. You open a new credit card to take advantage of a balance transfer offer, but see your credit score drop a few points, for example. Or you set up autopay for a bill, then don’t bother to read your statement and pay a fraudulent charge.

But there’s one piece of credit advice you can take with no qualms, and that’s to check your credit reports and credit scores for free. Requesting your own credit score (you can see two of your scores for free on or credit report (which you can do for free once a year) does not impact your scores.

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Rent or buy a home? This map has the answer

ACRMapShould you rent or buy a home? MarketWatch says it depends on where you live and that like all real estate dilemmas, rent or buy question comes down to location.  Take a look at this new resource for home renters / buyers.  

To help make the decision simpler, RealtyTrac crunched the numbers and created an interactive map of the rent/buy fault lines across America, Baltimore has the most advantageous market in the U.S. for home buyers, with a net difference of $1,160 between renting and buying. Rents there average $1,599, but the average monthly mortgage payment is just $439, based on a median sales price of $85,000.

New York City was found to be the least friendly to buyers with a net difference of $2,729 this time in favor of renters. The average rent New Yorkers pay a month is $1,852, compared with an average mortgage of $4,581 a month, according to RealtyTrac. But the reality is more complicated than that. Despite skyscraper-high prices, buyers actually have the edge in Manhattan. As for the other four boroughs: Residents of Brooklyn and the Bronx are slightly better off buying, whereas Queens and Staten Island are more favorable to renters.

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Source: MarketWatch

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What Is a Bad Credit Score?

Credit Score

Do you want to know more about credit scores? In this article, gives you the big picture and also breaks it down.

Most people have a gut feeling about their credit – it’s either great, good or bad. But what is a bad credit score really?

First, it’s important to understand that there are many different credit scoring models out there and each may use a different scale – or numbers – to convey information. For example, all FICO score range between 300 and 850 with 300 being the lowest (or worst) possible score, while 850 is the highest (or best) possible score.

The range for VantageScore credit scores has traditionally been between 501 and 990, with the higher number representing the strongest score. But the newer version, VantageScore 3.0, has a range of 300 to 850.

The companies that develop credit scores – FICO and VantageScore, for example – do not decide which credit scores are “good” or “bad.” Nor do the credit reporting agencies that supply the credit reports that are used to create credit scores. Instead, it’s up to individual lenders and insurance companies who use these scores to decide which scores demonstrate an acceptable level of risk.

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Why Improving Your Credit Score May Be a Wise Resolution for 2014

FEver considered a “pay day loan”? Check out the article below and avoid falling into the pay day loan trap and improve your financial position!

To many, it may appear that Americans are as addicted to credit as they are to their favorite latte, and the lending and credit industry has reaped the benefits, especially from those who have less-than-a-great credit score. One aspect of this fact appears to be changing based upon a recent announcement by federal regulators.

The announcement basically states that authorities who regulate the banking industry will be closely scrutinizing short-term loans, commonly referred to as “pay day loans”. The news is being heralded by consumer advocate groups who have expressed their concern that these types of loans should be classified as predatory lending.

In November of 2013, the Office of the Comptroller of the Currency along with the Federal Deposit Insurance Corporation (FDIC) issued a statement directed at banks that offer these types of loans. This statement advised that these lending practices were going to be closely scrutinized to ensure that the borrowers’ ability to repay, usually measured by credit score, was taken into consideration when executing the loans. Large banks in the US, including Wells Fargo, US Bank and Regions, are responding to the news by halting their offerings of such loans, many as soon as within the next few weeks.

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Source: InvestorGuide