Category: Life

Establishing Good Credit in College

March 27, 2020
Budgeting, Life, Wisdom

Good credit may open doors. It is vital to securing a loan, a business loan, or buying a home. When you establish and maintain good credit in college, you create a financial profile for yourself that can influence lenders, landlords, and potential employers.

Unfortunately, some college students do not have good credit. In fact, Credit Karma says that the average 18-to-24-year-old has a credit score of 630. A FICO score of 730 or higher is considered good.[i]

What are the steps toward a good credit score? To start, you need to utilize credit. About 15% of your credit score is built on the length of your credit history, so the sooner you purchase goods and services with a credit card and pay off that debt, the sooner you create a record of credit use.¹

Aim to reduce the balance to $0 every month. Does this sound like a challenge? It may not be if you just use a credit card to purchase everyday things. When you start splurging with a credit card, paying off the balance in full can become a problem.¹

Pay your credit card bill on time. Roughly 35% of your credit history develops from your pattern of payments: how on time they are, how late they are. One approach to consider is scheduling automated payments from your bank account, schedule reminders, or just try to pay the bill as soon as it arrives.¹

Refrain from applying for 2-3 credit cards at once. About 10% of your credit score reflects your history of credit inquiries, so if you suddenly apply for another 2-3 cards, you could hurt your score.¹

Another potentially bad move is jumping from card issuer to card issuer – that is, getting a card, then closing that credit card account and opening a new one after a few months because you find another credit card with better perks. In doing this, you end up giving yourself a shorter credit history per credit card account.¹

What if you have problems getting a traditional card? If you have no income, you might run into this – or, there might be other reasons that make it hard for you to qualify for one. If this is the case, consider going to the bank or credit union where you have a savings account and applying for a secured credit card. With these types of cards, you transfer some money into an account linked to the use of the card, and that amount represents your credit card limit. You can also ask to become an authorized user on a credit card held by one or both of your parents.¹

You can potentially help your credit score in other ways. Consistent bill paying is a plus for your credit history. If you do become an authorized user on a parent’s credit card and they use credit responsibility, just being linked to that account history could help your credit rating. If you are living off campus, you might end up co-signing a lease so make certain you understand you and your roommates’ financial obligations. Financially negligent ones could hurt your credit rating if, for example, you are sharing utilities costs. With financially trustworthy roommates, you may avoid that kind of credit score damage. Lastly, if you move while in college, be vigilant about having your bills forwarded to you, to avoid missing payments.¹

To learn more about CapSouth Wealth Management and the services we provide, call our office at 800.929.1001 or visit our website at www.capsouthwm.com

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. This material has been prepared for planning purposes only and is not intended as specific tax or legal advice. Tax and legal laws are often complex and frequently change. Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://thesimpledollar.com/how-to-build-good-credit-in-college/

Protecting Against Identity Theft

December 23, 2019
Life, Taxes, Wisdom

The cost of data breaches increases. The latest annual study from Javelin Strategy & Research, a leading financial analytics research firm, says that 14.4 million people were impacted by I.D. theft in 2018. Roughly 3.3 million of them had to shoulder a financial loss or an out-of-pocket cost due to these crimes. Those losses and costs totaled $1.7 billion, more than double the amount from two years earlier.[i]

Retirees are often portrayed as the main victims of identity theft. By one measure, that is not true: Federal Trade Commission (FTC) statistics show that about three times as many consumers aged 30 to 49 have their identities stolen as consumers aged 60-89. The median financial loss from such crimes is higher for seniors, however.[ii]

The FTC says that credit card fraud increased annually over 2014-2018. While it is the most common kind of identity theft in every age group, it is not the only kind.²

Tax time is prime time for identity thieves. Thieves would love to get their hands on your 1040 form or state tax form, and they would also love to claim a phony refund using your personal information.

When e-filing your tax returns, make sure you use a secure Internet connection. When you e-file, you aren’t putting your Social Security number, address, and income information through the mail. You aren’t leaving a tax form on a kitchen table or desk while you go for a walk or get some coffee.

The IRS doesn’t use unsolicited emails to request information from taxpayers. If you get an email claiming to be from the IRS asking for your personal or financial information, report it to your email provider as spam.[iii]

Use secure Wi-Fi. Avoid “coffee housing” your personal information. In other words, never risk disclosing financial information over a public Wi-Fi network.

Sure, a public Wi-Fi network at an airport or coffee house is password protected – but if the password is posted on a wall or readily disclosed, how protected is it? A favorite hacker trick is to sit idly at a coffee house, library, or airport and set up a Wi-Fi hotspot with a name like the legitimate one. Inevitably, people will fall for the ruse, log on, and get hacked.

Look for the “https://” and the padlock icon when you visit a website. Not just “http://,” but “https://.” The “s” stands for “secure,” and the padlock icon in the address bar signifies that traffic to and from the site is private. For solid security when you browse, you could opt for a VPN (virtual private network) service, which encrypts your browsing traffic.[iv]^,[v]

Check your credit report. You are entitled to one free credit report per year from each of the big three agencies: Experian, TransUnion, and Equifax. Go to AnnualCreditReport.com (a website created by these three credit bureaus) as a first step to accessing yours.[vi]

Don’t talk to strangers. Broadly speaking, that is very good advice in this era of identity theft. If you get a call or email from someone you don’t recognize – it could tell you that you’ve won a prize; it could claim to be someone from the county clerk’s office, a pension fund, or a public utility – be skeptical. Financially, you could be doing yourself a great favor.

To learn more about CapSouth Wealth Management and the services we provide, call our office at 800.929.1001 or visit our website at www.capsouthwm.com.

[i] https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime

[ii] https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2018/consumer_sentinel_network_data_book_2018_0.pdf

[iii] https://www.irs.gov/newsroom/security-summit-warns-of-new-irs-impersonation-email-scam-reminds-taxpayers-the-irs-does-not-send-unsolicited-emails

[iv] https://www.uab.edu/it/home/about-uab-it/announcements/item/1035-lock-icon-in-url-isn-t-always-a-mark-of-safety

[v] https://www.forbes.com/sites/tjmccue/2019/07/11/best-vpn-services

[vi] https://www.transunion.com/annual-credit-report

Tax Tips for Students with Summer Jobs

August 7, 2019
Life, Taxes, Wealth Management, Wisdom

Do you have a child or grandchild working this summer? Well, you might want to share the following tax tips with them!

If they have a self-employed job this summer, such as being a nanny, babysitter, or landscaper, they may have to pay their estimated tax directly to the IRS because they won’t have an employer withholding taxes for them.
In addition, these self-employed students may be able to deduct some of their costs as business expenses. Tell your children or grandchildren to keep detailed records of their expenses this summer.
Remember, tip income is taxable too (even if it’s cash).
Although your summer worker might not earn enough to owe income tax, they will likely still owe Social Security and Medicare taxes. Most employers will withhold these taxes or if they’re self-employed, they might have to pay these taxes themselves.

Do you know a young person trying to earn a little extra income this summer? Share these tips with them to make sure they are up on their tax requirements.

To learn more about CapSouth Wealth Management and the services we provide, visit our website at www.capsouthwm.com or call our office at 800.929.1001.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[i]

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.irs.gov/newsroom/tax-tips-for-students-with-summer-jobs

Category: Life

Establishing Good Credit in College

Protecting Against Identity Theft

Tax Tips for Students with Summer Jobs

Help us keep you informed!

You have Successfully Subscribed!