Short SaleShort sales continue to increase despite the seeming rebound in housing markets across America. According to RealtyTrac, short sales and foreclosures comprised of 16.2 percent of U.S. home sales in 2013. This was up from 2012, when 14.5 percent of home sales were short sales and foreclosures.

In a short sale, the mortgage lender agrees to let a homeowner accept an offer for their home that’s less than the amount owed on the loan. The bank takes all the proceeds, but the seller walks away with the remaining debt forgiven.

Choosing to go that route will put a serious dent in your credit score, but it’s not a fiscal death sentence. You can rebuild your credit and your finances after a short sale.

Immediately After a Short Sale of Your Home

In many cases, banks and lenders view a short sale as the equivalent to a foreclosure. Credit bureaus and future lenders consider it similarly to a default on your mortgage. The three major credit bureaus list it on your credit reports for seven years, but you can take steps immediately after a short sell to help restore your financial profile.

“You should regularly pull your free credit reports through,” says Todd Christensen, director of education for the National Financial Education Center. “For someone who is rebuilding their credit, they could consider accessing one of their three available reports every four months in order to check for accuracy in addition to any unfamiliar or fraudulent activity.”

Another critical task is to ensure that your loan balance has been forgiven. If it hasn’t been, you could find a collection company coming after you. Be aware, you also must claim the forgiven debt as income when you next file taxes.

Building and rebuilding credit is like the fable of the tortoise and the hare: Slow and steady wins the race. The short sale has less of an impact on your credit score each year after the event. [click to continue…]

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Ways not to go into debt this ChristmasAre you still reeling from your credit card bill after buying Christmas presents? You’re not alone. Many Americans continue to put holiday spending on credit cards despite the warning signs of building consumer debt.

According to the National Retail Federation, holiday retail sales in 2013 increased 3.8 percent to $601.8 billion. More than $42 billion was spent online, a 10 percent increase in last year.

We give generously to our friends and family members each holiday season. That’s fine until you reach for your credit cards to give the gifts and spend months paying the balances off. Far too many people give from their heart even when their wallet can’t afford it. Don’t make the same mistake this year.

Now is the time to start saving for Christmas even though the holiday just ended. Here’s how to give smartly.

Make a List Like Santa Claus

If you are like me, you want to buy gifts for a lot of people. My wife has to rein me in. Make a hard list just like Santa Claus on who is getting presents from you and your family this year and stick to it. Make a decision early in the year that you are going to only give gifts to your children and spouse this year. To help people from feeling hurt, communicate that as early as possible so there are no unrealistic expectations.
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