Tag: proof

Why It’s Harder to Get Credit When You’re Self-Employed

Around 6.1% of employed Americans worked for themselves in 2019, yet the ranks of the self-employed might increase among certain professions more than others. By 2026, the U.S. Bureau of Labor Statistics projects that self-employment will rise by nearly 8%. 

Some self-employed professionals experience high pay in addition to increased flexibility. Dentists, for example, are commonly self-employed, yet they earned a median annual wage of $159,200 in 2019. Conversely, appraisers and assessors of real estate, another career where self-employment is common, earned a median annual wage of $57,010 in 2019.

Despite high pay and job security in some industries, there’s one area where self-employed workers can struggle — qualifying for credit. When you work for yourself, you might have to jump through additional hoops and provide a longer work history to get approved for a mortgage, take out a car loan, or qualify for another line of credit you need.

Why Being Self-Employed Matters to Creditors

Here’s the good news: Being self-employed doesn’t directly affect your credit score. Some lenders, however, might be leery about extending credit to self-employed applicants, particularly if you’ve been self-employed for a short time. 

When applying for a mortgage or another type of loan, lenders consider the following criteria:

  • Your income
  • Debt-to-income ratio
  • Credit score
  • Assets
  • Employment status

Generally speaking, lenders will confirm your income by looking at pay stubs and tax returns you submit. They can check your credit score with the credit bureaus by placing a hard inquiry on your credit report, and can confirm your debt-to-income ratio by comparing your income to the debt you currently owe. Lenders can also check to see what assets you have, either by receiving copies of your bank statements or other proof of assets. 

The final factor — your employment status — can be more difficult for lenders to gauge if you’re self-employed, and managing multiple clients or jobs. After all, bringing in unpredictable streams of income from multiple sources is considerably different than earning a single paycheck from one employer who pays you a salary or a set hourly rate. If your income fluctuates or your self-employment income is seasonal, this might be considered less stable and slightly risky for lenders.

That said, being honest about your employment and other information when you apply for a loan will work out better for you overall. Most lenders will ask the status of your employment in your loan application; however, your self-employed status could already be listed with the credit bureaus. Either way, being dishonest on a credit application is a surefire way to make sure you’re denied.

Extra Steps to Get Approved for Self-Employed Workers

When you apply for a mortgage and you’re self-employed, you typically have to provide more proof of a reliable income source than the average person. Lenders are looking for proof of income stability, the location and nature of your work, the strength of your business, and the long-term viability of your business. 

To prove your self-employed status won’t hurt your ability to repay your loan, you’ll have to supply the following additional information: 

  • Two years of personal tax returns
  • Two years of business tax returns
  • Documentation of your self-employed status, including a client list if asked
  • Documentation of your business status, including business insurance or a business license

Applying for another line of credit, like a credit card or a car loan, is considerably less intensive than applying for a mortgage — this is true whether you’re self-employed or not. 

Most other types of credit require you to fill out a loan application that includes your personal information, your Social Security number, information on other debt you have like a housing payment, and details on your employment status. If your credit score and income is high enough, you might get approved for other types of credit without jumping through any additional hoops.

10 Ways the Self-Employed Can Get Credit

If you work for yourself and want to make sure you qualify for the credit you need, there are plenty of steps you can take to set yourself up for success. Consider making the following moves right away.

1. Know Where Your Credit Stands

You can’t work on your credit if you don’t even know where you stand. To start the process, you should absolutely check your credit score to see whether it needs work. Fortunately, there are a few ways to check your FICO credit score online and for free

2. Apply With a Cosigner

If your credit score or income are insufficient to qualify for credit on your own, you can also apply for a loan with a cosigner. With a cosigner, you get the benefit of relying on their strong credit score and positive credit history to boost your chances of approval. If you choose this option, however, keep in mind that your cosigner is jointly responsible for repaying the loan, if you default. 

3. Go Straight to Your Local Bank or Credit Union

If you have a long-standing relationship with a credit union or a local bank, it already has a general understanding of how you manage money. With this trust established, it might be willing to extend you a line of credit when other lenders won’t. 

This is especially true if you’ve had a deposit account relationship with the institution for several years at minimum. Either way, it’s always a good idea to check with your existing bank or credit union when applying for a mortgage, a car loan, or another line of credit. 

4. Lower Your Debt-to-Income Ratio

Debt-to-income (DTI) ratio is an important factor lenders consider when you apply for a mortgage or another type of loan. This factor represents the amount of debt you have compared to your income, and it’s represented as a percentage.

If you have a gross income of $6,000 per month and you have fixed expenses of $3,000 per month, for example, then your DTI ratio is 50%.

A DTI ratio that’s too high might make it difficult to qualify for a mortgage or another line of credit when you’re self-employed. For mortgage qualifications, most lenders prefer to loan money to consumers with a DTI ratio of 43% or lower. 

5. Check Your Credit Report for Errors

To keep your credit in the best shape possible, check your credit reports, regularly. You can request your credit reports from all three credit bureaus once every 12 months, for free, at AnnualCreditReport.com

If you find errors on your credit report, take steps to dispute them right away. Correcting errors on your report can give your score the noticeable boost it needs. 

6. Wait Until You’ve Built Self-Employed Income

You typically need two years of tax returns as a self-employed person to qualify for a mortgage, and you might not be able to qualify at all until you reach this threshold. For other types of credit, it can definitely help to wait until you’ve earned self-employment income for at least six months before you apply. 

7. Separate Business and Personal Funds

Keeping personal and business funds separate is helpful when filing your taxes, but it can also help you lessen your liability for certain debt. 

For example, let’s say that you have a large amount of personal debt. If your business is structured as a corporation or LLC and you need a business loan, separating your business funds from your personal funds might make your loan application look more favorable to lenders.

As a separate issue, start building your business credit score, which is separate from your personal credit score, early on. Setting up business bank accounts and signing up for a business credit card can help you manage both buckets of your money, separately. 

8. Grow Your Savings Fund

Having more liquid assets is a good sign from a lender’s perspective, so strive to build up your savings account and your investments. For example, open a high-yield savings account and save three to six months of expenses as an emergency fund. 

You can also open a brokerage account and start investing on a regular basis. Either strategy will help you build up your assets, which shows lenders you have a better chance of repaying your loan despite an irregular income. 

9. Provide a Larger Down Payment

Some lenders have tightened up mortgage qualification requirements, and some are even requiring a 20% down payment for home loans. You’ll also have a better chance to secure an auto loan with the best rates and terms with more money down, especially for new cars that depreciate rapidly.

Aim for 20% down on a home or a car that you’re buying. As a bonus, having a 20% down payment for your home purchase helps you avoid paying private mortgage insurance.

10. Get a Secured Loan or Credit Card

Don’t forget the steps you can take to build credit now, if your credit profile is thin or you’ve made mistakes in the past. One way to do this is applying for a secured credit card or a secured loan, both of which require collateral for you to get started.

The point of a secured credit card or loan is getting the chance to build your credit score and prove your creditworthiness as a self-employed worker, when you can’t get approved for unsecured credit. After making sufficient on-time payments toward the secured card or loan, your credit score will increase, you can upgrade to an unsecured alternative and get your deposit or collateral back.

The Bottom Line

If you’re self-employed and worried that your work status will hurt your chances at qualifying for credit, you shouldn’t be. Instead, focus your time and energy on creating a reliable self-employment income stream and building your credit score.

Once your business is established and you’ve been self-employed for several years, your work status won’t matter as heavily. Keep your income high, your DTI low, and a positive credit record, you’ll have a better chance of getting approved for credit. 

The post Why It’s Harder to Get Credit When You’re Self-Employed appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

February Class-Action Settlements Involve Godiva, Walmart and More

Consumers alleged FGF Brands bakes its naan in a conveyor-style, gas-heated oven even though the company claims the breads are baked in a tandoor oven, which is a clay oven that uses charcoal heat that produces smoky flavors.
If you purchased disposable contacts made by Alcon, Johnson & Johnson Vision Care, CVI or Bausch & Lomb between June 1, 2013 and Dec. 4 ,2018, you may be eligible for compensation. However, Bausch & Lomb contact lenses bought through 1-800-Contacts after July 1, 2015 are not included in this settlement.
In October 2015, hackers accessed names, Social Security numbers, doctors’ names, medical diagnoses, treatment plans and insurance information. Patients whose data was breached should have received a notice from the cancer treatment center in March 2016.

AmeriGas Propane Tanks

Source: thepennyhoarder.com
The exact cash payment per customer is not available and will depend upon the number of claims filed and the net settlement fund after attorney’s fees, costs and other expenses are deducted.
The settlement money provided by ABB will be added to the claims made under previous settlements with contact lens manufacturers. The estimated amount that will be provided to each consumer is not available at this time.
Payment amounts will vary, but are estimated between and .

  • The Indirect Purchaser Settlement Class is made up of those who purchased AmeriGas or Blue Rhino propane tanks, other than a wholesale purchase directly from AmeriGas or Blue Rhino for resale, in Arizona, California, Iowa, Maine, Michigan, Minnesota, Nevada, New Mexico, North Carolina, North Dakota, South Dakota, Utah or West Virginia between Dec. 1, 2009 and Nov. 30, 2020.
  • The Direct Purchaser Settlement Class is made up of consumers nationwide who purchased one of the propane tanks directly from AmeriGas or Blue Rhino through a vending machine at retailers or other locations, or paid one of the companies directly through a vending machine to exchange a previously purchased propane tank, other than a wholesale purchase intended for resale.

Submit your valid claim by March 8, 2021.
If you did not submit a valid claim response to the 2016 notice, but you do qualify for this settlement, submit your claim by March 22, 2021.

ABB Optical Group LLC Contact Lenses

Consumers may receive .50 for each product purchased, but only five may be claimed without a receipt. With proof of purchase, consumers can claim an unlimited number of products.
Sometimes, you notice right away if you have been overcharged for an item. If you pick up a box of cereal marked .99 and see it listed at .22 on your receipt, that error is pretty easy to spot.
Eligible class members might have received a notice regarding a Godiva settlement in 2016 as the case was pending in U.S. District Court in Florida. The case was later refiled in Cook County, Illinois, so if you submitted a valid claim response to the 2016 notice, you do not need to file a new claim in order to receive a payment.
The lawsuit alleges FGF Brands used fraudulent and deceptive advertising to market its use of a tandoor oven. FGF Brands denies that it has violated any laws.
There are two settlement classes:

Synchrony Bank

Submit your valid claim by March 1, 2021.
Submit your valid claim by the May 10, 2021 deadline.
See if you qualify and submit your valid claim by March 10, 2021.
Check out this month’s highlighted class-action settlement offers, some of which have taken years of litigation, to see if you can benefit.

Stonefire Naan Bread

Complete and submit your valid online claim form by April 1, 2021.
You may be eligible for a portion of a .9 million settlement from the maker of Stonefire Naan products, FGF Brands, if you bought their naan bread that was marketed as baked in a tandoor oven between Nov. 16, 2013 and Oct. 23, 2020.

  • Stonefire Original Naan
  • Stonefire Roasted Garlic Naan
  • Stonefire Whole Grain Naan
  • Stonefire Organic Original Naan
  • Stonefire Original Mini Naan
  • Stonefire Ancient Grain Mini Naan
  • Stonefire Naan Dippers

Potential awards are expected to be between and .
Submit your valid claim by Feb. 18, 2021.
Synchrony Bank allegedly violated the Telephone Consumer Protection Act (TCPA) by calling individuals who did not have an account with the bank. These unsolicited calls were made by an automatic dialing system or artificial/pre-recorded voice, which is in violation of the TCPA unless the caller has prior written consent from the recipient.
If you bought any of these products within that time period, you may claim .50 for each item purchased:

21st Century Oncology

Customers who returned an item bought at Walmart or Sam’s Club between July 17, 2015 and Nov. 25, 2020 may be eligible for part of a million settlement.
The complaint alleged Godiva receipts contained 10 digits, including the first six and the last four of the card numbers on its point-of-sale receipts.
AmeriGas and Blue Rhino allegedly agreed with each other to reduce the amount of propane in the pre-filled tanks they sold from 17 pounds to 15 pounds without reducing the price, according to court documents. The lawsuit accused the companies of colluding to reduce the amount of product in the propane tanks while keeping the cost the same in order to increase their profit margin by more than 13% per pound.
If you received a call from Synchrony Bank between June 1, 2016 and Oct. 19, 2020, you could receive a portion of a .9 million class-action settlement.

  • Two years of credit monitoring through Identity Guard.
  • Cash payments up to $40 for lost time without any documentation (two hours valued at $20 per hour.)
  • Cash payments of up to $260 for lost time with documentation (13 hours valued at $20 per hour.)
  • Cash payments of up to $10,000 for any fraud and out-of-pocket expenses incurred because of the data breach.

Walmart and Sam’s Club were accused providing some customers with incomplete refunds by not including the sales tax paid on the original purchase.

FROM THE MAKE MONEY FORUM

Walmart, Sam’s Club Sales Tax Refund

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If you bought an AmeriGas or Blue Rhino pre-filled propane tank between Dec. 1, 2009 and Nov. 30, 2020, you could be eligible for a portion of a .5 million settlement.
Several forms of relief are available, including:
Consumers can claim a cash payment of for each tank when they provide proof of purchase along with a completed claim form. If no proof of purchase is submitted, the payment is .50 each for a maximum of 50 propane tanks.

Godiva Chocolatier

The Fair and Accurate Credit Transactions Act (FACTA) prohibits any more than the last five digits from appearing on such a receipt in order to protect consumers.
Several affected consumers filed lawsuits alleging 21st Century Oncology failed to take reasonable cybersecurity steps to protect personal data. 21st Century Oncology admitted to no wrongdoing, but agreed to the settlement to resolve the litigation.
You may be eligible to share in a .2 million settlement reached with contact lens distributor ABB Optical Group LLC over allegations of a conspiracy to increase the cost of contact lenses.
If you made a purchase at a Godiva Chocolatier retail store between April 6, 2013 and Nov. 20, 2015, you may be eligible to share in a .3 million class-action settlement.
AmeriGas admitted no wrongdoing but agreed to the settlement to end litigation. Even though consumers who bought either AmeriGas or Blue Rhino propane tanks may be affected by this settlement, it only resolves claims made regarding AmeriGas because the Blue Rhino case is ongoing.
If you are one of the 2.2 million patients whose personal information was accessed through a 2015 data breach of 21stCentury Oncology, you could be eligible for compensation from a .5 million class-action settlement.
The settlement benefits customers who made a debit or credit card purchase and received a point-of-sale receipt that displayed more than the last five digits of the card number.
The suit alleged contact lens manufacturers, independent optometrists and ABB agreed to “unilateral pricing policies” that prevented competition from online and discount contact lens retailers. This agreement purportedly began in June 2013.
In other cases, price discrepancies aren’t so obvious, as seen in a new pre-filled propane tank class-action settlement offer.

6 Ways to Summer-Proof Your Home

Not only are we living through a global pandemic, but we’re also living through what is one of the hottest summers in many states. Here’s how you can protect your home from the summer heat and other woes you may face this season.

The post 6 Ways to Summer-Proof Your Home appeared first on Homes.com.

Source: homes.com