How Credit Rating Can Affect Your Ability to Get a Job

A bad credit rating can impact a person's ability to get a job.

A Facebook fan had heard that a bad credit rating could keep him from getting a job. He wanted to verify whether this is true and wanted to know where he find out about his credit rating.

It is true that having a bad credit rating can impact a person’s ability to get a job.

Employers are increasingly pulling people’s credit reports before offering jobs … or in some cases, they’ll check a person’s credit after a job offer has been made. If the individual has poor credit, that job offer may be rescinded.

By some estimates, one-third of all employers run credit checks. I’ve also heard statistics suggesting that as many as 70% of all employers do a credit check on employment candidates. I think the 70% figure is probably high. But in any cases, it’s imperative to maintain good credit while job-hunting.

To find out what’s in your credit file, just go to www.annualcreditreport.com. This is the website maintained by the “Big 3” credit bureaus — TransUnion, Equifax and Experian. Under federal law, you can get one free copy of your credit report every 12 months from each of these credit bureaus. If you find any erroneous or outdated information in your credit files, dispute that data with the credit bureaus.

I also recommend that people use a credit monitoring service, to keep regular tabs on their credit and help guard against identity theft. FreeCreditReport.com has a good credit monitoring service that I use and would recommend to anyone.

Should You Leave a Low Paying Job Or Just Ask For a Raise?

If you're cash-strapped, the simple act of walking into your boss's office and getting a raise could be just the thing you need to boost your finances in this shaky economy.

A Facebook fan who saw me giving career advice on the Tyra Banks Show had a question about whether to leave a well-liked job simply to earn more money elsewhere. My answer, simply put, is: NO. Here’s my advice for that person and others contemplating making a job or career switch solely to snag a higher paycheck.

If you’re working in a “dream job” in the career you planned for, I wouldn’t suggest job-hunting as your first course of action in order to become more financially stable. Plus, you’ve indicated that you’ve looked around at other jobs and don’t want to try any of them. Since you went to college for your current job, and are working in your chosen career, the best strategy is to try to maximize your pay and financial incentives at your present employer. You say the pay is “low” — and indeed your $23,900 a year paycheck falls below the average annual salary of $31,824, according to Sept. 2009 Labor Department statistics. So why not request a raise?

Get a raise by constantly documenting your work accomplishments to demonstrate your performance and what you offer to the organization. In other words, do not just walk into to your boss and say, “I want a raise,” or “I think deserve a raise.” Your boss won’t care that you’ve been doing good work, or that you’ve come to work every day on time. That’s not good enough. That’s a basic minimum level of expected performance. You have to show—in numerical terms—how you benefit the organization. If you saved the company X amount of dollars, if you created a new program that has generated a certain amount of income for the business, if you have been instrumental in training, if you have done hiring, if you have been a sales superstar or a technology whiz, whatever it is that you have done, document that. Then go ask for – and get – the raise you’re due.

Alternatively, why not try to get other fringe benefits and perks from your employer that could be valuable? I’m thinking of extra vacation days, a year-end bonus, or perhaps some freebies — like your employer paying for a host on things on your behalf: ranging from gym memberships to financially planning services to any student loans you may have. It doesn’t hurt to ask. The worst that can happen is that your employer says “No.” And then you’re in the same position. Ditto for asking for a raise.

You can read more about this on a related article I wrote titled, “How to Negotiate for a Raise – Even in a Bad Economy” by following this link – http://www.associatedcontent.com/article/2256855/how_to_negotiate_for_a_raise_even_in.html?cat=31

You Can Stop Debt Collector Harassment

Many people are well behind in paying their bills, but that doesn’t give debt collectors permission to harass you at work, late at night, after you’ve asked them to stop, or under other conditions.

What Debt Collectors Cannot Do

• Cannot contact you before 8 a.m. or after 9 p.m. your local time unless you give them permission or they have a court order to do so.
• Cannot call you at your job if you tell them your employer prohibits such calls.
• Cannot contact you if you tell them you have a lawyer representing you.

These, and other protections are spelled out in the Fair Debt Collections Protection Act (downloadable PDF file). I will highlight more of your rights over the course of this month.

Send a Cease & Desist Letter
To stop a debt collector from contacting you, write them a Cease and Desist letter telling them to stop all contact with you.

The first sentence of your letter should say: “I am unable to pay this bill because….” or “I refuse to pay this debt because….” and explain your reason. You also have the option of not giving a reason at all.

The second sentence should state: “I hearby assert my right under Section 805-C of the Fair Debt Collection Practices Act to request that you cease any further communication with me.”

After the debt collectors receive your “Cease & Desist” letter they cannot contact you except to indicate that the collection process against you has stopped or that legal action against you is moving forward.

For a sample Cease & Desist letter, see my book Zero Debt.

 

Student Loan Cancellation Programs—Big Hassles, Even Bigger Payoff

By Lynnette Khalfani-Cox, The Money Coach

Under federal law, you can get your federal student loans canceled or discharged for many different circumstances.

Reasons for loan discharge:

• Death
• Total and permanent disability
• School-related issues or improper certification by your school
• Full-time teaching or public service work
• Military service
• Bankruptcy

Before I explain the nuts and bolts of what’s required for these various loan cancellations, let me first say that there are a multitude of scenarios that won’t get you a loan discharge.

Reasons that won‘t get you a loan discharge:

• If you dropped out of school for any reason
• experienced personal problems that forced you to abandon your studies
• didn’t like your instructors
• couldn’t get a job after graduation
• were plagued by financial difficulties
• if you thought the quality of the instruction you received was sub-par

None of those reasons will hold weight with the Department of Education.

Perserverance Required
Let me also caution you that getting a student loan canceled or discharged is rare and often requires tremendous perseverance, know-how, and work on your part.

Having said that, even though obtaining a discharge can be a big hassle, it is nevertheless certainly worth the effort and frustration you may experience in the process.

Tuesday through Friday this week I will post a few tips on how to get your student loans canceled, so please check back.

For more information on paying off your student loans, check out my book Zero Debt for College Grads: From Student Loans to Financial Freedom. Get the book now at Amazon.com.

Get Free Help Preparing Your Income Tax Return

By Lynnette Khalfani-Cox, The Money Coach

It’s time to get busy filling out those tax returns. Mercifully, you don’t have to pore over thousands of pages of the IRS tax code, nor do you have to pay an expensive accountant in order to get your taxes done by the April 15 deadline.

If you earned roughly $42,000 or less, or if you can’t prepare you own taxes, you can get help in filling out your tax return and even claiming the EITC from a Volunteer Income Tax Assistance (VITA) site in your area.

The VITA Program operates nationwide, and is staffed by individuals who are trained in completing basic tax returns. You can find a local VITA site by calling 800-829-1040. Most of the country’s 12,000-plus VITA sites are run out of community agencies, neighborhood centers, libraries and schools.

Here is what the IRS recommends you bring to a VITA site to have your tax returns prepared:

• ID: Proof of identification
• SS cards: Social Security Cards for you, your spouse and dependents and/or a Social Security Number verification letter issued by the Social Security Administration
• DOB: Birth dates for you, your spouse and dependents on the tax return
• Tax forms: Current year’s tax package if you received one
• W2: Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
• 1099: Interest and dividend statements from banks (Forms 1099)
• Last return: A copy of last year’s federal and state returns if available
• Bank info: Bank routing numbers and account numbers for Direct Deposit
• Daycare info: Total paid for daycare provider and the daycare provider’s tax identifying number (the provider’s Social Security Number or the provider’s business Employer Identification Number)

Need Extra Money Now? Tip: Claim the Advance Earned Income Tax Credit Today

By Lynnette Khalfani-Cox, The Money Coach

One special feature of the earned income tax credit is that you can get it sooner, rather than later. If you expect to qualify in 2009 for the earned income tax credit and you have at least one dependent child, you can request part of that credit right now under the “Advance EITC Program.”

Here’s how it works. You fill out a Form W-5, which is called the Earned Income Credit Advance Payment Certificate. (Get a Form W-5 from your employer, or download a copy from: http://www.irs.gov/pub/irs-pdf/fw5.pdf.) Soon after you complete the W-5, you will begin receiving advance EITC payments through your employer. The EITC payments are added to your regularly scheduled paychecks.  If you are self-employed, you cannot qualify for the advance payment.

In 2009, the maximum advance EITC payment amount you can receive through your employer is $1,826. Once tax season rolls around next year, you can still claim the earned income tax credit and receive the balance of any money that may be due you, above and beyond the $1,826 that was added to your pay over the course of this tax year.

To be eligible for the advance earned income credit payment, all four of the following must be true:

• You (and your spouse, if filing a joint return) have a valid Social Security Number
• You expect to have at least one qualifying child, and to be able to claim the earned income credit using that child
• You expect that your 2009 earned income and adjusted gross income will be less than $35,463 (or $38,583 if married filing jointly), with one qualifying child. Or you expect to have two or more qualifying children, and you expect your 2009 income will be less than $40,295 (or $43,415 if married filing jointly).
• You expect to be able to claim the EIC for 2009

The W-5 form is very short, easy to fill out, and will likely take you just one minute to complete.

On the W-5, you simply print or type your full name and social security number. Then you answer “Yes” or “No” to two questions, and check a box indicating your tax filing status (i.e. single, head of household, qualifying widow(er), or married filing jointly). At the bottom of the form, you sign and date the W-5, and that’s it.

Good Financial News You Can Benefit from in 2009

By Lynnette Khalfani-Cox, The Money Coach

With negative economic headlines continuing to dominate the news, you could be excused for mistakenly thinking that 2009 is going to be, in a word: terrible.

But the truth for many individuals and families, employees and business owners alike is that 2009 could very well shape up to be a year of great financial opportunity and – dare I say, it? – prosperity. At the very least, you can take heart in knowing that big changes are looming for many personal finance arenas, which could mean a huge economic bonanza to you, your family or your business.

In 2009 you can benefit from the following:

• Housing Stimulus: Tax credits up to $7,500 for new home buyers and possibly even up to $15,000 for all buyers.
• Low Mortgage Rates: Mortgage interest rates may go as low as 4 percent.
• Foreclosure Moratorium: Delinquent homeowners with loans held by Fannie Mae or Freddie Mac get extension.
• Job Creation Bonus: Small business owners who add new employees to the payroll may get money back for hires.

New Jobs Amid a Sea of Pink Slips

By Lynnette Khalfani-Cox, The Money Coach

You’ve already heard the gory news on the jobs front. Most of it is definitely very, very ugly: More than 11 million people are out of work. Unemployment is up to 7.2%. On January 26th alone – a day dubbed as “Black Monday” by many observers – employers announced more than 50,000 layoffs. But none of that means that jobs aren’t being created at all – or won’t be in 2009.

One bright spot, many agree, is that the federal government is hiring. Also, once the $800-billion plus economic recovery package passes – with Democrats controlling Congress there’s no question about if the bill will pass, only when, and at what size – job growth will follow throughout states across the country.

The Obama administration predicts 3.5 million new jobs will be created by the stimulus bill before the end of 2010. Even if team Obama’s estimates prove way off, the nonpartisan Congressional Budget Office still forecasts that an $800 billion stimulus package would produce 2.1 million to 3.6 million new jobs. Not a bad way to start bolstering a job market that’s been – let’s put a positive spin on it – struggling to turn around.