subtle pitfalls can damage credit scores

Many people know that making late payments, skipping payments or filing for bankruptcy are surefire ways to ruin their credit.

But there are more subtle, often unrecognized, things people do that may damage their credit scores and spook would-be creditors.  In turn, that can trigger wide-ranging financial consequences — from paying higher interest rates and insurance premiums, to getting rejected for a loan, to forking over a higher security deposit or even getting turned down for a job.

One of the potential missteps is when shoppers are enticed by too many instant in-store credit offers — the ones that promise 10 percent off or more on a purchase just for signing up for a credit card.

First, potential creditors may view people who open multiple accounts in a short period of time as being in financial trouble.  In addition, opening up all that credit could hurt credit scores, which are affected by the average age of a person’s credit accounts. The older the accounts, the better, said John Ulzheimer, credit expert with CreditSesame.com and formerly with the credit scoring stalwart FICO.  “So if you’ve just added a bunch of accounts, you’ve made your credit report look younger, maybe a lot younger. It takes time for those accounts to age and the average age of your credit history to grow again,” he said.  “My suggestion for people who want the (in-store) discount is to think about the downside,” Ulzheimer said. “Especially if you want to go out and buy a home or a car. You’ll be in a higher interest rate tier.”

Another thing potential creditors don’t like to see when they pull a credit report is high credit card debt.  “Many people think that if they make payments on time, they’ll have good credit,” Ulzheimer said. But that may not be the case. “The main problem with credit card debt is it’s a high-risk type of debt,” he said. “It’s not secured by an asset like a home or a car. So if you have as little as $10,000 in credit card debt on cards that are maxed out, you’d be surprised how low your credit scores can be, even if you are making payments on time.  “The good news is, if you can pay (the debt) down, your scores will improve in a short period of time.”

Taking cash advances and consistently making only minimum credit card payments also can cause problems. Doing either can signal to a card issuer that the customer is under financial stress and is at higher risk for default.  “Believe it or not, there are certain credit card issuers that will hold certain types of transactions on your credit card against you,” Ulzheimer said.  People who have poor credit and take cash advances generally run into the most trouble, he said. “Card issuers are already looking at them as high risk. They are already on a short leash.”  The card issuer may react by suspending the card’s credit line, canceling the card or closing the account at renewal time.

Any of those moves could hurt the cardholder’s credit scores.

Another often-overlooked threat to a credit score is co-signing for a loan.  Besides being on the hook for the money in the event of a default, co-signers will see their credit scores dip the moment they sign and likely plunge if any payments are late.  The entire debt also goes on co-signers’ credit reports, which counts against them if they apply for a mortgage or other form of credit.  “It’s almost like an afterthought that some people willingly put their name on a contract and not really think through what they have just done,” Ulzheimer said. “When you co-sign for a loan, you might as well be applying for it on your own.  The impact is really no different.”  Co-signing also could lead to some uncomfortable personal moments.  “It can be very awkward at holiday dinners if a relative across from you defaulted on a loan that you co-signed for,” he said.

Source: http://hnratlantarealestatenews.com/?p=7728

a tip for you – chimney sweep

Stroll in Avondale Estates-16It’s important to have wood-burning fireplaces and gas stoves cleaned and inspected each year to prevent the buildup of creosote, a highly flammable substance that collects in chimney. A professional chimney sweep will clean the fireplace and stove pipes and inspect it for damage. Be sure to take action before the chilly weather sets in—the chimney should get a good cleaning in the autumn.   As a Realtor, I can introduce you to reputable professionals in my network, don’t hesitate to contact me.

smart tidbit – smoke detector

This is a quick reminder … your life could depend on it.   Since July 1, 1987, every new dwelling and every new dwelling unit within an apartment, house, condominium, and townhouse and every motel, hotel, and dormitory shall be provided with an approved listed smoke detector.   The smoke detector is to be located on the ceiling or wall at a point centrally located in the corridor or other area giving access to each group of rooms used for sleeping.  If the dwelling  has more than one story, detectors are required on each story including cellars and basements, but not including uninhabitable attics.

If a dwelling was constructed prior to July 1, 1987, an approved battery operated smoke detector – which shall be maintained in good working order – shall be in place.

  • A working smoke alarm is constantly on alert, scanning the air for fire and smoke.
  • The detectors must be listed and meet the installation requirements of NFPA 72.
  • Homeowners and Tenants are required to keep the smoke detector(s) in good working order.
  • The law is enforced by local building and fire code officials.
  • There are many different brands of smoke alarms available on the market but they fall under two basic types:  ionization (sound more quickly when a flaming, fast moving fire occurs) and photoelectric (quicker at sensing smoldering, smoky fires).  The  dual sensor smoke alarms combine smoke alarms that combine ionization and photoelectric into one unit.
  • Some alarms may use strobe lights that flash and/or vibrate to assist in alerting those who are unable to hear standard smoke alarms when they sound.
  • Test your alarm monthly and check the batteries, replace them at least once a year.

Please contact your county fire office for information on connecting your smoke alarm.  Read more and about the Georgia Code.


smart tidbit – security deposit

Under Georgia law (O.C.G.A. §44-7-30) a security deposit is money paid by the tenant to the landlord.  The security deposit protects the landlord if the tenant vacates without making required payments or damages the rental unit.  If the tenant gives proper notice and vacates without owing any rent or damages, the landlord must return the security deposit to the tenant within 30 days.

Georgia law requires that, before the tenant pays a security deposit and moves into the rental unit,  the landlord must give the tenant a complete list of any existing damages (move-in inspection) to the unit that is signed by both the landlord and tenant.

Amounts identified in the lease as the security deposit are refundable to the tenant.  Pet deposits and advance rent deposits, which are refundable under the lease, are considered part of a security deposit under the Georgia law.  The security deposit does not include non refundable fees, or amounts applied toward payment of rent, services, or utilities.  Application fees are not considered security deposits and are usually not refundable, should you choose not to move into the unit. Reservation fees – deposits to hold an apartment until you actually sign a lease –  are not always refundable and sometimes they turned into security deposit at time of move-in inspection.

If the security deposit is held because of damage to the unit, the landlord must send the tenant notice within 30 days identifying the damage, the estimated dollar amount of the damage, and a refund, if any, of the difference between the security deposit and the amount withheld for damages.  When can the landlord keep the security deposit in full or partially:

  • if the tenant failed to pay any rent, late charges, pet fees, and utilities which were the tenant’s responsibility under the terms of the lease
  • if  the tenant contracted for the rental property to be repaired or cleaned and those charges were not paid.
  • if there are damages caused by negligent or careless acts, accident or abuse of the property.
  • as damage caused by the tenant’s early termination of the lease.

A landlord cannot retain a security deposit to cover normal wear and tear that occurs as a result of the tenant using the property for its intended purpose.

Georgia Law doesn’t require the landlord to place the security deposit in an interest-bearing account, nor does the law require that interest earned be paid to tenant.

Always get a receipt for any deposit or fee that you pay.

Source: Georgia Landlord Tenant Handbook

smart tidbit – stigmatized property law

On July 1, 1989, Georgia’s “Stigmatized Property Law” (O.C.G.A. § 44-1-16) went into effect.  Owners and their agents are required to respond truthfully to the best of their knowledge if they are asked direct questions about the property’s prior occupancy by a diseased person or whether the property was the  site of a homicide, felony, suicide, or a death by accidental or natural causes.  However, the Attorney General advised the Real Estate Commission that there is a conflict between the law as it relates to such diseases as AIDS.  If asked about diseases as AIDS, a licensee “should respond by stating that he or she is unable to answer such an inquiry”.  According to the Attorney General’s Office, persons who have AIDS or who have tested positive for the Human Immunodeficiency Virus (HIV) are “handicapped” for the purposes of the Federal Fair Housing Act.

In 1998, the General Assembly adopted an amendment to O.C.G.A. § 44-1-16 which specifically relieves real property owners and their agents of the obligation of answering any question if doing so would violate the federal or state fair housing laws or any other federal or state law, rule, or regulation.   No legal cause of action is created by the failure to disclose such information.

Georgia requires that certain sexual offenders report their location and that the local sheriff make that information public. It is the sheriff’s duty to maintain a public registry of  the name and address of offenders. For a list of sex offenders go to the Georgia Bureau of  Investigations website.

Source: www.grec.state.ga.us and http://www.dca.ga.gov/

a tip for you – water heater

thermostatIf you are like me, throwing money down the drain is not an option. And coupons are not really my cup of tea.  What I like is to save for the long run … So here is a tip that I just received via my Nest May Energy Report.  It’s pretty simple and according to their research, it  could save you around $36 to $61 annually.  So why not lower the temperature on your water heater?

Most water heaters are set to 140°F by default but most people are comfortable if their heaters are set to 120°F.  So try turning the temperature down on your water heater this summer. That 20°F drop will not only save you money but will also protect you as it slows mineral buildup and corrosion in your water heater and pipes. Water heated at 140ºF also poses a safety hazard: scalding.

There is a lot more to read on the website of  the U.S. Department of Energy …including a ‘before you start” and step-by-step instructions.  The project level is quoted as  ‘easy’.


Source: Save Energy at Home, ENERGY STAR and Nest Labs Inc. 

druid hills home & garden tour

Harry Norman, REALTORS® is proud to sponsor the 46th Druid Hills Home and Garden Tour from May 2-4, 2014. On Friday and Saturday the tour will be from 10 am – 5 m and on Sunday from 1 pm – 5 pm.
The annual Druid Hills Home and Garden Tour will celebrate its 46th year featuring the beautiful architecture and design of the Druid Hills neighborhoods.  This year seven elegant homes were chosen to showcase their incredible renovation and restoration work as well as lush gardens from master gardeners. The tour will feature the following homes and gardens:

  1.  Ann Critz, 797 Springdale Road
  2.  Jim and Gloria Boone, 965 Springdale Road
  3. Susan Muller and Steve Budnick, 1209 Springdale Road
  4. Claudia and Jeffrey Keenan, 1236 Springdale Road
  5. Katie and Sedgie Newsom, 815 Oakdale Road
  6. Kelley Moore and Scott Godfrey, 1198 Oakdale Road
  7. Franklin Johnson and Heather Renfro-Johnson, 1137 Briarcliff Road

I will personally welcome you at 1198 Oakdale Road, a charming 1920 shingled cottage on Sunday afternoon between 1 and 5 pm!   So please come and see me!

The Tour is collaborating with the Callanwolde Fine Arts Center to host the Artist and Pottery Market. Visitors will be able to tour Callanwolde, the 27,000-square foot Tudor Revival mansion, built in 1920 for Charles Howard Candler, an heir to the Coca-Cola fortune.
Emory Village – swinging under the cool vibes of The Moonlighters Jazz Band – will be featured for the first time as a stop on the Tour for lunch, shopping, and purchasing tickets.

For more information and tickets on the Druid Hills Home and Garden Tour, please visit http://druidhillstour.org


smart tidbit – VA guaranteed loan

VA Guaranteed Loans are made to eligible veterans (in possession of a valid Certificate of Eligibility) for the purchase of a primary residence.  To get a loan, a veteran must apply to a lender.  If the loan is approved, VA will guarantee a portion of it to the lender.  This guaranty protect the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms.

There is no maximum VA loan, but lenders will generally limit VA loans to $417,000.  This is because lenders sell VA loans in the secondary market, which currently places a $417,000 limit on the loans.  For loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing.  A veteran’s maximum entitlement is $36,000 (or up to a $104,250 for certain loans over $144,000).  Lenders will generally loan up to 4 times a veteran’s available entitlement, without a down payment, provided the veteran is income and credit qualified and the property appraises for the asking price.

VA Loan Features:

  • No down payment, unless required by the lender or the if the purchase price is more than the reasonable value of the property
  • Low interest rates
  • Ability to finance the VA funding fee, plus reduced funding fees with a down payment for at least 5% and exemption for veterans receiving VA compensation
  • Closing costs are comparable with other financing types – and may be lower!
  • No mortgage insurance premiums
  • An assumable mortgage

smart tidbit – real estate transfer tax

Real estate transfer tax is not a property tax.

It is an excise tax payable prior to the recording of a warranty deed when real property is sold or transferred for consideration with a value of $100 or more. The real estate transfer tax must be paid before a deed, instrument, or other writing can be recorded in the office of clerk of superior court in the appropriate county. Once the tax has been paid, the clerk of the superior court or their deputy will attach to the deed, instrument, or other writing a certification that the tax has been paid.

Real estate transfer tax is based upon the property’s fair market value, less any encumbrances existing at the time of sale or transfer and not removed by the sale or transfer, at a rate of $1.00 for the first $1,000 or fractional part of $1,000, plus 10 cents for each additional $100 or fractional part of $100.

The tax must be paid by the person who executes the deed, instrument, or other writing or the person for whose use or benefit the deed, instrument, or other writing is being recorded.

Source: https://etax.dor.ga.gov/taxguide/2012_Tax_Guide.pdf