Surprising Things That Won’t Affect Credit Score

credit scoreMany individuals are confused about what affects their credit score, and if you are a financial professional you probably find yourself being asked this question frequently by your clients. Perhaps you found this article because you are a consumer wishing to obtain a line of credit for a major purchase. Concerned about keeping scores above the recommended healthy number of 700, people can become alarmed when they hear what may or may not impact their rating. Read on for a simple guide of things that, perhaps surprisingly, will not affect the credit score in a negative way.

Checking It Yourself

You will not lower your credit score by checking your credit report yourself. However, when other people check it, that will lower your credit score. You can safely check your score countless times and it will have absolutely no impact if you use a reputable source. There are many legitimate companies that allow you to check your credit report and score as often as you like for a small fee each month.

Changing Employers

Credit reports display employer information, but even if you switch jobs often, it will have no impact on your credit score. The only impact that switching jobs may have on your credit score is if the new employer checks your credit report before hiring you. You can avoid this from happening by simply talking to the employer and explaining that you have no problem with them seeing your credit report, but you would rather that they allow you to check it yourself and print it out for them because it will not affect your score if you do it this way. Many employers will not have a problem with you doing this as it shows them that you are conscious about your score and they will still get to see your credit report.

Late Utility Payments

Utility companies do not report to any credit bureaus. Even if you pay your utility payments late it will have no impact on your credit score. However, if you do not pay them at all and they send it to a collection agency it may impact your score. To avoid this from happening, it is best to set up payments directly with the utility company since it won’t be reported to a credit bureau that you owe them money.

Credit Counseling

Credit counseling is available to help individuals get out of debt. Contrary to popular belief it will have no impact on an individual’s credit score. Since credit counseling is the route that many people take right before claiming bankruptcy, it is a common myth that it will affect credit score just as bankruptcy does. The credit counseling agency will ensure that payments to lenders are made. As long as these payments are made on time there will be no affect on credit score.

A good credit score will take time to obtain. Many things will affect it, but the above mentioned items will have no effect on it. Paying bills on time and knowing what affects credit score will help build solid credit.

About the Author

Helen Parsons is a business blogger who has researched and written about many topics related to business and finance, including an article about the Best Online Accounting Degree Programs.

Top CPA Firm’s Audit Procedures Questioned by PCAOB

auditsThe Sarbanes-Oxley Act of 2002 drastically changed the accounting industry and auditing procedures for publicly traded companies (issuers). This new legislation was enacted in response to some of the worst accounting scandals in United States history, which involved companies like Enron and WorldCom. A new provision of the legislation was the creation of the Public Company Accounting Oversight Board (PCAOB).

The PCAOB’s mission is to oversee the audits of publicly traded companies and protect the public interest by promoting informative, accurate and independent audit reports. The PCAOB issues audit standards for audits of issuers and is responsible for reviewing various aspects of an audit firm’s practice. The New York Times reported on March 7, 2013, that the PCAOB has expressed doubt on PricewaterhouseCooper’ (PwC) audit procedures in 2008 and 2009. In addition to the concerns raised, the PCAOB also stated PwC failed to remedy any of the noted deficiencies.

Noted Deficiencies

The PCAOB expressed concerns about professional skepticism and independence of audit firm personnel. Of particular concern to the PCAOB was PwC’s system of quality control. It was noted the system of quality control in some respects was not sufficient to assure auditors met requirements or standards. In response to the PCAOB’s concerns, PwC stated the noted deficiencies were in highly subjective, complex and evolving areas of audit practice. PwC stated it did take measures to remedy and relieve the PCAOB concerns, but to no avail. Both sides have expressed frustration with each other.

The PCAOB also noted that auditors failed to sufficiently challenge management evidence or representations. It highlights auditors’ inability to think independently and faults them for relying too heavily on management assertions. Not surprisingly, large CPA firms like PwC, Ernst & Young and Deloitte continue to struggle with new standards and PCAOB oversight.

Impact on Public Interest

The inability of the PCAOB and PwC to come to terms on audit issues impacts the public interest negatively. Many societal stakeholders, from employees to shareholders, have a vested interest in accurate and independent audit reports. Investors rely on financial statements to be free of material error or misstatement in order to make sound business decisions. Auditors serve a vital role as an independent third-party designated to express an opinion on the accuracy of financial statements.

In addition to an opinion on financial statements, auditors of public companies are also supposed to express an opinion on internal control. Internal control issues can have a serious impact on the efficiency and effectiveness of operations, accuracy of financial reporting and compliance with applicable laws or regulations. According to the Associated Press, many companies around the world are still reluctant to rely on the Management & Analysis section of financial statements. Auditors need to be professionally skeptical of management in order to perform a thorough, meaningful audit and examination. The public’s well-being depends on it.

Five Signs It’s Time to Retire

retirementThe steps that make up a successful career lead to a dais on which we eventually stand and proclaim, “I’ve arrived.” In time, the glow of importance and the draw of money fades, as the years begin to take their toll. That once-shining pedestal begins to lose its glimmer as thoughts wander toward other pedestals with other accomplishments, other outcomes, sometimes in other places. There are thoughts of turning off the lights and closing the door on one chapter in the book of Life and beginning another, a phase commonly regarded as Retirement.

Five Signposts Retirement Is The Next Step

1. If your value of Time is calling for you to be involved in other things and your current position is getting in the way of what you really want to be doing, retirement may be the answer. The current job may provide no room for exercising your leadership potential, or you could be feeling trapped or hemmed in by office politics and strain to be free of all the hustle, bustle and expectations.

2. If your health is no longer adequate to perform your job function or your field demands what you no longer have the energy to give, retirement may be calling out to you. Perhaps the passion for your current position has waned for want of the tools you need to truly become outstanding in your field. Thoughts may wander to starting a business of your own, or maybe only working part-time.

3. If family responsibilities have changed and the sounds of tiny feet are those of grandchildren who go home with grown sons and daughters, retirement may beckon. A big house may seem too empty or cold weather may be driving an interest in seeking out a more hospitable climate. Choice of residence is no longer hinged on school systems and like-minded community as it is for conveniences, activities, comfort, affordability and security. Time with those grand-kids may trump the importance of schedules and paychecks.

4. If your finances are capable of supporting your needs despite the possibilities of no income from employment, retirement seems logical. Investments provide a steady income stream and mortgages, college tuition and family no longer demand a heavy draw of funds every month. Major purchases of appliances, automobiles and furniture are few and far between, offering a comfortable cushion of assets and ability to pay the monthly bills while still enjoying hobbies, travel and other leisurely pursuits.

5. Your career niche has ridden its wave and is being phased out by new technology and other advances.

When the dreams of youth are set aside to accomplish a living, those dreams may continue to roil and fester until it becomes impossible to ignore their appeal. Your position could be accomplished by younger and more energetic staff, the spouse may be looking to share more quality time, or requiring more attention due to medical issues. When family is grown and income assured, choosing retirement should be an easy choice.

About the Author

Michael Davies is a professional recruiter and job coach based out of Milwaukee, Wisconsin.  He contributes to numerous online web resources about career development, and more of his expert advice can be found at Masters in Human Resources Degrees.

Today’s Healthcare Costs and the Aging Workforce

aging workerBeing a business owner or operator is known to have its associated costs. Things such as office supplies, electricity, building maintenance and leases, and even parking accommodations can all be factored into a business’ bottom line. Each of these individual expenses is a likely topic of impassioned conversation. But perhaps the most up-and-coming hot-topic expenditure conversation today is in health care – specifically senior health care costs encountered by businesses.

Red, White, Blue, and Gray

In recent years, according to statistics cited by Bloomberg Businessweek, the number of workers over the age of 65 has grown by 101%.  This “graying” pattern in the workforce has subsequently opened up the debate on associated employer-incurred health care expenses for these working seniors. But is this really such a cost issue as it is sometimes perceived?

The short answer: sometimes. The state in which the employment takes place has a lot to do with it. Some states forbid insurance coverage to be calculated with age as a consideration. Other states do not outlaw the practice. Some insurers willingly look to other factors aside from age, while others do not.

“Gray Means Good”

There is an abundance of positive news though for those still looking for it here. First, when real data comparisons are examined, the results have typically shown that seniors are not the popularly thought of “big expenses” for company-carried health insurers. In fact, according to experts such as author and HR expert Peter Cappelli, younger workers typically carry more dependents and therefore most often end up being the insurance companies’ “big expense.” These younger workers are giving birth, insuring their children, taking them to doctors, and more. Essentially, experts like Cappelli adamantly deny any claims to seniors being such an economic burden on the insurer.

Secondly, seniors can be a fantastic bargain for employers. Many seniors desire to work part-time for supplemental income. They are also far more seasoned and experienced in all things business and life. They are also widely believed to be the group to take work seriously and follow a company’s goal, itinerary, and purposes.

Finally, many experts refer to alternative, “more effective ways” to limiting age-related business costs. This mainly consists of maintaining a mindfulness to workplace safety, loss-prevention, and worker compensation insurance policy. Ergonomics is another largely agreed upon tactic. Know what your employees are good at or not good at and take advantage through positional placement and task delegation.

Short of sweeping legislative changes, this will probably be the state of affairs for some time to come. Seniors are as big a part of the workforce as ever before. And it seems that as with so many other concepts in business, seniors are but another element that can be put to use as an inarguable asset, or an issue. The choice at this point is up to the individual business and the state laws governing it.

Preparing Children For a Better Financial Future

kids-moneyEvery day, children are faced with all kinds of new learning experiences. One of the most important parts of their lives as adults will be personal finance, yet it is not adequately talked about or taught before their graduation from high school. Whether you are interested in developing a lesson plan about smart financial decisions in your classroom, or wanting ideas for talking to your own kids about this issue, below are some great ways you can teach children about saving money and money management.

Banking Lessons

From birth, open a savings account for your child. Begin a lesson plan for teaching your child about money matters. During their teens, open a checking account for them, but do not give them sole reign on the account. Begin by teaching them the basics of depositing and withdrawing money by using deposit slips and checks. Teach them how to keep the account reconciled; reminding them that their online balance may not be what their balance really is. Get them a debit card, but be careful about teaching them how to use it and how to record their spending. ATM transactions are costly if they are not tracked the right way.

Discuss Money Matters

Years ago it was a no-no to talk about money with kids. Today, it is very important to discuss the basics of money matters. Talk about savings, banking and how to budget their money. Show them some of your bank statements that have fees on them, and discuss how you plan to eliminate those fees eventually. Children enjoy engaging in these types of conversations.

Budget Basics

Teach your children how to budget money as they grow up. Help them keep track of their spending and their allowance earnings. Teach them by showing them how you spend your money and where your paycheck goes.

Needs and Wants

Kids tend to think that what they want is always a need.  Help your kids identify the important things such as clothing, shelter and food. Although they might be able to buy something they want but they do not necessarily need, help them understand that it has to be included in the budget in order to buy it.

Credit Card Lessons

Teach your children about credit cards and how they need to be used with great care. Help them see that buying something now, maybe something they do not really need, on credit could end up in them having too much debt in the future. Use a credit card statement you receive as a tool so show them how interest has to be paid on purchases. Show them that only about 15% of the monthly payment gets applied to the balance and the other 85% is going to the interest. Show them how a $3000 balance can end up taking them almost 40 years to pay off if they only make the minimum payment.

Allowance

Notice how quickly children spend our money? Give them the responsibility to pay their way and see how fast their spending goes down. Let them earn an allowance, and let them use that allowance to pay a bill or for their lunch money. Help them set up a budget. When the money comes from their wallet, you will be surprised to see how their spending habits change.

Everyone wants the best for their kids. Ensuring that they are financially prepared for life is one of the roles of a parent and often of a teacher. Spend time with your children teaching them one of life’s big lessons.

About the Author

Leslie Quinn is a mother of 3 teenagers and a part-time financial consultant.  When she’s not busy advising her clients and children on the best use of their finances, she offers her advice online to various blogs and resources like MBA in Finance Degree Guide.

Is It Better to Relocate or Renovate?

home renovationWhile the housing market continues to rebound, it is not as stable as it was prior to the bursting of the bubble in 2006.

When space becomes a premium in a home, owners face a dilemma – do they move or remodel? Both have the potential to increase living space, but which is best suited to the situation?

 

When to Relocate

According to a Money Magazine/CNN report, the first step is to assess the local housing market, by “comparing three key metrics: price increases, speed with which homes are selling, and inventory of places for sale”. The idea is to have more price increases and quick sales, but a low inventory. Real estate agents will do this, but homeowners can do this themselves on Trulia.com or Zillow.com. If the area meets the three criteria, then selling has its benefits.

An existing home that has maximized the existing space makes relocating the better option. In an msn.com interview, housing economist Robert Sheehan stated that many homes are built to their maximum dimensions for total square footage. Homeowners in this situation need to decide if they can live with the current situation or move.

When to Renovate

Dan Fritschen, author of Remodel or Move tells msn.com that those owning homes in a desirable area usually do better renovating. By remodeling to make a home to similar others in the neighborhood, homeowners are making smart a financial decision.

Fritschen says that moving is an expensive proposition since it is pure expense. Unlike renovating, a move creates no increase in net worth. In comparison, remodeled properties can appreciate by up to $150,000, depending on the changes made, which offsets the investment of the remodel. Homeowners must also consider the upfront cost. If the cash is not readily available, does taking on more debt make sense?

Remodeling Magazine and the National Association of Realtors publish an annual list outlining the return on investment for various remodeling projects. Projects like installing energy efficient windows or upgrading bathroom sinks and vanities bring the greatest return for the renovation dollar, as much as 80 cents per dollar spent. According to Fritschen, the true expense of the remodel is revealed after factoring in the increase in the home’s value. The difference between what was spent and the increase in value is the actual expense of the project.

Ultimately, the decision to relocate or remodel comes down to money and emotion. If the remodel will reap financial benefits and homeowners can handle the stress and mess of a remodel, then it probably makes sense to take the plunge into the realm of remodeling. However, if homeowners can get what they want in a home by purchasing a new home without creating additional financial issues, then relocation may be the best choice. Either way, looking at the choices with a critical eye, while being honest with oneself, is the best way to make the decision.

Social Media as the New Classifieds

There was a time when earnest job seekers would polish their resumes to a brilliant sheen and wait for the Sunday newspaper. In that long-anticipated document, they would find the classified section, or the help wanted ads. Page after page of opportunities with which they could match their skills abounded. Monday morning came, and with it the multiple mailings and phone calls. With patience, most candidates eventually obtained employment using this method. Recently, however, the classified sections are appearing somewhat thin. Granted, recession plays a role in their reduction. Still, new means of communication are proving more effective to hiring managers.

social media in hiring

Social Media Platforms

Social media is now a primary vehicle for prospective employees to showcase their strengths, demonstrate their experience and share their visions. When considering which of the many social media platforms is best for landing a position, candidates should adopt a wide net philosophy. Some employers will respond to a concise 140-word post on Twitter and open the attached resume. Others, however, will not view any qualifications until they feel comfortable with the applicant, thereby making Facebook a more appealing vehicle. More established companies may troll exclusively on LinkedIn. Unless an applicant can afford to be highly selective, the best strategy is all-of-the-above.

Consistent Posting

Breadth is good when seeking to connect with potential employers, but so too is depth. One or two entries now and then does not keep the job searcher front and center. Adopting a strategy of posting early and often will attract more attention. For example, addressing a subject of interest to target companies once a day may get a hit or two. On the other hand, approaching that subject from several different angles–each with its own posting–will undoubtedly make a greater impression and spark more interest. Relevant content is extremely important. It separates the serious prospect from the idle searcher. Staying abreast of developments in the chosen field, and writing intelligently about them, makes the likelihood of securing a job greater.

Detailed Profile

No employer wants a coy prospect. The profile section of any social media platform is the job seeker’s sales pitch. This summarized resume must have no holes: education, work experience, interests and a first-rate, quality photograph must all be included. Obviously, a Twitter profile will be abbreviated in comparison to LinkedIn or Tumblr. Within the platform parameters should be this rule of thumb: the more specifics provided, the better. Do not get hung up on privacy issues. Unless identity theft is a possibility, include schools, clubs and links to other websites.

The Key is Professionalism

Social media is now a necessary avenue of communication with possible employers. As tempting as it is to relax outside of work, applicants are well-advised to remember that they are on display. Immature online rants and pity parties can wait until after the offer letter is received. Keeping online presence serious and poised will play well with hiring managers. Multiple platforms, consistent posting and a winning profile likewise earn the favor of employers in need.

Patti Ray is a Communications Director who encourages the use of social media across all aspects of business – from hiring employees to following up with customers after the product is out the door.  She shares a fascinating analysis of social media in advertising via the following infographic: Biggest Moments in Social Media Marketing 2012.

Advertisers: “May I Borrow Your Interest?”

likeIn questioning the average passerby on the street, you would probably quickly find that most everyone has at least a basic to moderate understanding of modern advertising. Most people know well enough that the purpose of advertising is to get their attention and business. Most also understand the potential competition factor of advertising and the sometimes vast sums of money behind it. Super Bowl commercials are a great example.

Enter Society’s New Love

It wasn’t long after social media came onto the scene that companies and advertisers realized that there was an enormous cultural effect taking place. They also realized the value of getting on board.

Between the largely publicly understood elements of advertising cause-and-effect and this newly emerging “social media phenomenon”, there came to be what is now referred to as “borrowed interest of social media.” Here, social media is the only new element since “borrowed interest” has been around since the beginnings of advertising.

“May I Borrow Your Interest?”

So, what is borrowed interest? An archived CBS News article provides a great example of borrowed interest, describing how the date 07/07/07 was creating a small cultural buzz. This cultural event was then instantaneously adopted as a sort of celebrated value of many companies in what is termed borrowed interest. Contests and sweepstakes were held with promotions relating to the number 777. Similar promotions are held around every holiday, big or small.

Borrowed interest is quite common, and when you can recognize it, you begin to notice its use more and more frequently; hence the current state of social media borrowed interest in which every maker of a product wants to be seen as affiliated with any and all forms of culturally acceptable social media. This is done in a number of ways, but for the most part, these methods of involving the social media element in product advertising can be classified as being either direct or indirect.

Direct reference to social media ties can be seen when an advertisement directly makes mention of those ties in some form or another. In other cases, the marketing experts in charge seem to opt for a softer approach to presenting the correlation. This more subtle approach is typically taken when it is deemed a better tactic to present social media affiliation as a naturally inherent feature of the product or company, not necessarily needing to be flamboyantly heralded. This can certainly tend to have a more convincing effect at times. The New York Times article, “Ads That Speak The language Of Social Media”, elicits some great, easily recognized examples of such social media borrowed interest. For example, a car commercial that references a mother accepting a daughter’s “friend request”, and a candy commercial depicting a thumbs-up sign reminiscent of the thumbs-up symbol on Facebook.

No matter the exact method of making the point, as long as social media is a cultural must-have, consumers can expect to be made fully aware that the advertisers and their products are most certainly on that same popular train. The only remaining question: What will be the next big cultural norm that the advertisers are bound to jump aboard?

Tips For Getting A Business Loan Approved

loanStarting a business is one of the most exciting opportunities that a person can encounter during their life. Owning a business can provide an exciting work environment, increased personal freedom and financial stability if done right. With this being said, it can oftentimes be difficult to get the necessary funding to start a new business operation, which holds many people back. Business loans are the most common way to fix this problem, and below are a few tips that any entrepreneur can use to ensure that their loan application process goes as smoothly as possible.

Choose The Right Bank

Many business experts encourage potential business owners to apply for loans at a bank that exists in their area, and for good reason. Banks that operate locally are much more likely to understand the target market of a potential business than a larger, national bank, and in turn, make more educated decisions regarding who they choose to loan money to. It is also important for an entrepreneur to choose a bank that is accustomed to dealing with businesses that are roughly the same size as the one that they are looking to start, as well as businesses that are in similar markets.

Have All Of The Proper Documentation In Order

There are many documents that need to be prepared during the process of obtaining a business loan. Many of these are personal in nature, so it is important for anyone looking to get a loan to make sure that they have all of the documents that pertain to their past business and financial histories ready to go. These could include income statements, resumes detailing past work experiences, credit reports and various other documents. Having these organized in a way that a loan officer can analyze quickly will do a lot to make the loan application process go smoothly.

Have A Very Specific Business Plan

A problem that entrepreneurs run into quite often is that their business plans are not detailed enough. Even the best business idea can be denied funding because the business plan associated with it is lacking. One of the most important parts of a business plan to pay attention to is the area that identifies specifically what the funding from a business loan will be used for. Lending institutions like to know precisely how their investment will be utilized.

Talk With Local Business Organizations

For small business loans especially, it is important for entrepreneurs to get in touch with local resources such as their local Small Business Administration branch. This costs no money to do, and such an organization will be able to provide key information that will help anyone do better during a loan application process. They will also often be able to recommend the best banks to approach about loans depending on what market the potential business owner is looking to get into.

If these few basic tips are followed, any entrepreneur will have a great chance of getting approved for a business loan. The key to being successful during the loan process is preparedness, and doing these things will help anyone be completely ready.

Karen Michaelson is a loan officer who works with small business owners to help them achieve their goals.  In addition to the above tips, she advocates for a quality education to get you started, and she has written more about that at Online MBA Rankings.

Owning a Vineyard Could be Your Next Business Endeavor

wineIf you have a love and passion for wine and making wine, you may consider buying a vineyard of your very own. Vineyards are plentiful around the country and you could participate in creating some of the best tasting wines.

Before you get started, there are some essential things to consider when it comes to owning a vineyard, and a recent BloombergBusinessweek article outlines them in detail.

Location

The most important thing to think about is the location, as it is crucial to select a place you are passionate about to get the most out of your vineyard. Many people think vineyards only exist in the Napa Valley, but nearly every state in the U.S. has a wine production industry. Choose a place that you love all the aspects of, including the people, food, and landscape. If you enjoying spending time at your vineyard, you will likely boost your success. Furthermore, your location will play an essential part in the types of grapes you wish to harvest. It is necessary to take a sample of the soil to decide what root stocks will work the most effectively for your chosen grapes.

Consider the Name

Unless you are going to start a vineyard from the ground up, you want to selectively consider the name of the vineyard. Look into its reputation and how people view it. Also, consider if the name would go on if you decided to sell.

Find the Right Partners

If you are not planning on running your vineyard yourself, you need to carefully select the individuals you are going to trust with your investment. Conduct personal interviews to get to know potential employees, and you will likely find the perfect match. If you are starting a new vineyard, you will need to hire workers to prepare the ground, install irrigation systems, and plant the grape crops.

Following Rules

Since you have no control over the weather and climate, you need to make sure you are abreast on the important rules of vineyards. One of those rules is you cannot interfere with nature. For example, you are forbidden to irrigate during a dry year. Additionally, if you have a winery on your property, you must acquire the necessary permits and licenses to make wine. The laws and restrictions differ by state or county, so you will need to contact the local authorities before you start producing wine.

Marketing Your Product

After you have grown your grapes and produced wine, you need to figure out a way to market it to customers. Many vineyards sell their products to local wineries and restaurants and others have wineries directly on the property. You can also set up tours for individuals to sample the wine.

If you have a love for wine, and you have the time, motivation, and funding, owning a vineyard may be the ticket to your own self-fulfillment. This venture is not for those who want to earn money quick, as it takes at least five years to get a vineyard completely productive. While owning a vineyard is no easy task, a great deal of passion and a little bit of savvy can go a long way to reaching your dream.