Unemployment and Housing Bust Force California Residents to Move Out of State

A new study shows that the slow U.S economy has greatly decreased the number of illegal immigrants from Mexico. From a high rate of 1.6 million in 2000, the number of arrests decreased to 327,000 last year. This is a great decline since the early years of the 1970s.
Duane Conder, a freelance photographer is now selling most of his belongings in Ebay as he and his family is getting ready to move.

He said that it will be traumatic since his family has lived near San Diego for the past 11 years.

He shared that it just seemed so sudden that all the work was gone in an instant.
During the dot-com boom, his family moved from Texas to California. However, since California is currently struggling to provide jobs to their citizens with an unemployment rate of 11.7%, they had to foreclose their home and are forced to move out of California to go back to Texas.

The unemployment rate in Texas is lower compared to California at 8.4%. In 2010, around 75,000 new residents moved to Texas while California lost about 130,000.

Aside from having no jobs as the main reason for the movement of the people, housing is also another factor. In Los Angeles, a 3 bedroom home sells for about $1 million. A similar 4 bedroom house is only selling at $380,000 in Texas. The people who purchased the more affordable homes are those who moved from California.

Bill Gaiennie moved his family and business from California to Texas. He said that they will stay in Texas and just visit California from time to time. They exchanged their 1 bedroom apartment for a 4 bedroom home. He said that if they stayed in California, they need to be a two income family in order to live in the place that they are in right now. However, the no personal income tax and lower cost of living in Texas currently allows him to sustain his family even with only him working.

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What things don’t affect how my Credit Score is Calculated?

Irrelevant Factors in a Credit Score Computation

There are many wrong notions about credit scores. There are people who believe that their area of residence and race affect their score. There are those who believe that several other factors do influence the credit rating that they obtain. This article presents what does not matter in the computation of your credit score.

About one in every six individuals think that their race and gender affect the credit rating that they are given, according to a study conducted by Visa that was released during the previous month. The results showed that many people have mistaken thoughts about their credit scores. Moreover, the results reveal that 42 percent of Americans do not check their scores regularly. But, these thoughts must be corrected and is worthy of understanding because the credit score literally affects your ability to obtain a car or home loan as well as a job, low interest credit card and even a life insurance.

Stacy Johnson, founder of Money Talks News shares some of the biggest misconceptions about credit scores. In the survey that Visa conducted, here are some of the top factors and the number of people who believe that these affect their credit ratings.

1.) Employment History 59.9%

Factors contributing to someone's credit score...

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2.) Debt Interest Rates 58.7%
3.) Age 38.6%
4.) Assets or Savings 53.1%
5.) Nationality 21.6%
6.) Place of Residency 25.3%
7.) English Speaking Abilities or Fluency 21.6%
8.) Race 15.7%
9.) Gender 17.2%

However, none of these factors really have even the slightest impact on your credit score. It would be unethical more so illegal for Fair Isaac, the country’s most popular company that computes for your FICO or credit score, to account for these factors in their calculation.

This however does not mean that work history and income does not matter. In fact they do. They matter more to a landlord and a loan officer. But when it comes to your credit score computation, they are considered irrelevant.

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Student Loans Now Greater Than Credit Card Debt

Increasing Student Loan Debt Pose a Huge Burden

College tuition fees are costly and difficult to afford. Because of this, students have an additional burden to carry aside from the classes they take and finishing school.
The amount of debt from student loans is now greater than the total debt from credit cards in the entire United States. This means that before even graduating, students have already created a hole and a burden in their finances.

According to the associate professorof Ohio University, Deborah Thorne, the problem is partly due to the bad economic condition.

Česky: Kreditní karty Deutsch: Kreditkarten En...

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She said that when the economy goes down, more people go back to college hoping that they will have better work opportunities. Consequently, an increasing number of people go back to school. However, more than this, the bigger aspect that contributes to the problem is the unaffordable tuition rates that are not proportionate to the income.

She said that around 30 years ago, tuition costs were less than $200 every quarter. During that time, the parents of college students can work over the summer and can already afford to pay for their child’s education.
However, the situation is different today since there are students who need to go back to their homes since they cannot find work. Huge student loans are also causing other setbacks as well.

Thorne says that high debts in student loans can affect people during their entire lifetime. It will lead them to postpone their plan to have a family or purchase a home. They will also be forced to decrease the amount they contribute to their retirement account. Some may not even be able to send their kids to college since they were not able to save enough money to settle their personal student loan.
Thorne added that the average debt in student loans is about $25,000.

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Protecting Your Child’s Identity and Social Security Number from Theft

Facts to Know about Child Identity Theft

Babies can be victims of identity theft, a fact that parents do not realize. It is even more likely to happen than identity theft in adults. A recent report of Carnegie Mellon Cylab says that social security numbers that have never been used are highly valuable because thieves can use them with any date of birth and name.

The numbers that have been stolen are then utilized for purposes of illegal immigration and organized crime. The report further adds that the SS numbers of minors are so useful because there is no organized process at the moment that can check the name and date of birth of the original owner of the number. This means that for as long as the number has a clear history, any thief can attach a name and birth date to it. Once there is a violation, it can go unnoticed. Even credit reporting bureaus cannot detect it. For parents to be on guard about the possibility of their child’s Social Security number being stolen here are some important facts to know.


Scanned image of author's US Social Security card.

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1.) Children and adults are equally at risk of identity theft.

2.) As a parent, you should check your child’s Social Security number as early and as often as you can. Take note that the longer the theft uses your child’s number, the more complex the case becomes and the more difficult it is to resolve. If you wait for your child to get older before checking her number and you find out that your child is a victim of identity theft, your child may have a difficult time getting a job, renting an apartment or even obtaining a mobile phone plan.

3.) A child’s credit record is not cleaned up by the time they turn 18. This means that if a child grows up and is ready to use his Social Security to apply for accounts and for a credit check, he will still be held accountable for any debt and account linked to his number whether he incurred the account or not.

4.) Pre-approved offers for your child in the mail are possible signs of identity theft. Once you receive this, immediately investigate and do not disregard the situation.

5.) Family and friends as well as criminals are the most common perpetrators of identity theft. They use this for themselves or sell the numbers to the black market.

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Student Loan Default can affect the Federal Budget

The “Super Committee” also known as The Joint Select Committee on Deficit Reduction is looking for ways to cut $1.2 trillion in deficits over the next decade. To achieve this goal, the Super Committee must watch out for a flaw in the federal student loan program that threatens the federal budget.

The federal government guarantees repayment of most student loans meaning each loan default eventually piles updeficit. Since majority of the graduates were paying loans off, the cost of defaulted loans was negligible.

However, the rising cost of defaulted student loans is now getting more attention. According to The Department of Education the overall default rate for federally guaranteed student loans had risen to 8.8percent, up from 7 percent the previous year. But that 8.8 percent refers only to the 320,000 graduates out of 3.6 million who defaulted within two years of their first payments being due. Four years out will be worse.

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The Department of Education tries to prevent students from falling into the default category by postponing the repayment requirement through deferments and since the repayment requirement begins only when students are out of school, they enroll in graduate or additional undergraduate programs. But in time, the student’s only permanent solution to student-loan debt is obtaining a job that pays well enough to start repaying the loan. However, they can’t find jobs because of the weak economy and a flaw in the student loan program.

Congress provided grants to help kids go to college. These Pell grants give children the chance to prepare at college for rewarding careers. Congress also established numerous guaranteed loan programs as supplementary student aid for college costs – student loans must be repaid after graduation or after leaving school without graduating.

The Super Committee should recommend that student loans require proof of ability to repay them by scrutinizing students’ academic records, credit histories, and other criteria of credit-worthiness. Tightening eligibility for student loans would treat student loans as risky investments and ensure they are given only to student borrowers with a good chance of repaying them.

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