Kevin Weier

The reality is that divorces are unpleasant and frequently involve legal battles between the two parties. Not only can divorce lead to emotional strain, but it can also lead to financial disaster as well. Any shared accounts and co-signed loans are the major source of the issue.

During a divorce, the responsibility of marital debt is divided between the two spouses through a divorce decree. Most consumers assume that this division carries over to the actual accounts and they are absolved from the responsibility of the debt. In reality, divorce decrees do nothing to end responsibility for shared accounts. This way of thinking is legal and accurate. It completely comes down to who signed on the dotted line when opening the loan or credit card account. The divorce decree does NOT supersede the actual contractual agreement and all parties attached to the account can be held liable no matter what the court rendered. In order to avoid these issues, divorced couples should close or refinance all shared accounts. Any shared or joint accounts such as credit cards, auto loans, and mortgages will continue to be a joint responsibility until you work directly with the financial institution to resolve the issue.

Premier Financial Solutions has successfully worked with many people helping them to rebound from the financial strife caused by divorce. Contact me to find out how I can help anyone facing this type of situation.

Before applying for a loan, there are three key things that can be done to help qualify for the best possible lending available.

Step 1: Understand your credit. Credit reports and scores are a major part of a mortgage loan application. A mortgage professional will check scores from the three major credit reporting agencies-TransUnion, Experian, and Equifax. Having scores above 620 will help to ensure you qualify for lending. Higher scores = lower interest rates.

The five factors that are used to determine your credit scores are:

• Payment History-35%
• Amount Owed-30%
• Length of Credit History-15%
• New Credit-10%
• Types of Credit-10%

Step 2: Correcting negative inaccuracies. People have multiple options for obtaining their credit report. Besides obtaining it from a mortgage professional, online options are probably the easiest and most convenient way to see where you stand. Websites such as www.annualcreditreport.com and www.myfico.com are a great place to start. Getting a credit report allows you the opportunity to review your credit to make sure everything is reported accurately and in your favor. If you do see errors on your report, the Fair Credit Reporting Act (FCRA) allows consumers the right to dispute these errors with the credit reporting agencies.

Step 3: Pay down credit card debt. Debt Utilization, the percentage of debt in relation to the credit limit on credit cards, accounts for 30% of your credit score. To help increase credit scores, it is important to focus on this area. Debt Utilization only takes into consideration revolving debt (credit cards, lines of credit, over-draft protection accounts, etc). Ideally, you should try to maintain a balance of 10% or less of your credit limit.

In addition, monitoring your credit a few times a year is also very important to ensure that the information continues being reported accurately. It can also help consumers to identify fraud or identity theft. Focusing on these factors will help to build and maintain favorable credit into the future.

The holiday seasons are quickly approaching and many of us will begin shopping for gifts. Almost every store will be offering a discount on your purchase if you sign up for their retail credit card. I know this 10%-25% savings on your purchase seems great! Before doing this though, please think of the effect it will have on your credit.

•1. First, you are giving the store permission to pull your credit which leads to an inquiry showing up on your credit reports. We all know by now that inquiries, especially credit card inquiries, can have a negative affect on your credit. Now imagine going to several stores and doing this and having these new inquiries stay on your credit reports for the next 12 months... Remember that "New Credit" accounts for 10% of your score in the FICO scoring model.

•2. Second, each of these new accounts will show up on your credit reports. The key word here is new. This will lower the overall average age of the other accounts that are on your reports. This accounts for 15% of your score.

•3. Third, is the fact that you are opening revolving accounts. That means any balance you owe on the account is increasing your debt utilization, which calculates 30% of your score. The higher the utilization, the lower your score.

•4. Fourth, when given these retail cards, you are usually offered no payments for a certain period of time. This will result in a stagnant account with no balance reduction. This means you will not be making payments and building payment history, which accounts for 35% of your FICO score.

Be careful that the store is not signing you up with a third party finance company. The fact that you have a finance company account on your credit reports can lower your scores regardless of how well you make your payments. Don't confuse finance company accounts with credit cards like VISA or MASTERCARD!

My suggestion would be to forgo the in-store credit card offers and pay the full amount for your purchase. Saving 10% or 15% now can cost you in the long run.