Credit reports are generated by three credit reporting agencies (CRAs) – Equifax, Experian, and TransUnion. Your credit report may vary depending on which agency the report comes from, as creditors can choose which bureau to report to and not all creditors report to every bureau. To pull your credit report for free from any of the CRAs, visit annualcreditreport.com.

What is Included in a Credit Report?

Contrary to popular belief, most credit reports do not contain your credit score without paying an additional fee. Rather, a credit report contains information related to your borrowing and payback history, as well as other information valuable to lenders. For example, it is typical to find the following types of information on your report:

• Past and current credit accounts/loans,
• Payment history – such as on-time, missed, or late payments (including amounts in collections)
• Foreclosures and repossessions,
• Bankruptcies,
• Past and present addresses,
• Relevant public record information such as liens, civil suits, and judgments, and
• Companies who have accessed your credit report

Why Would I Need to Access My Credit Report?

a. Applying for a loan

It is a good idea to access your credit report prior to applying for a loan or any other large credit-related purchase. This allows you to be prepared for what your lender will see and make sure that the report is accurate. It is not uncommon for a credit report to contain errors, which is why it is recommended to check your report from all three agencies at least once a year.

b. Scanning your report for errors

Any errors on your report can be disputed with the credit bureau who issued the report, the company whose information is inaccurate, or with the Consumer Financial Protection Bureau (CFPB). The CFPB recommends first disputing the error with the credit agency (Experian, Equifax, or TransUnion) by explaining the error and providing any supporting documentation. The CFPB’s website provides sample templates for filing disputes and other helpful dispute-related information, which can be accessed here. If the agency finds an error, it will report the error to the other two agencies.

What About Credit Scores – How Do I Find Mine and What Affects It?

The three credit agencies discussed above also create a credit score, which is a 3-digit number ranging from 300 to 850. Credit scores can also be accessed by most credit card companies/lenders. However, each agency’s credit reporting algorithm is different, which will result in different scores.

One well-known credit scoring agency is FICO, which generates a FICO-score. A FICO-score is the same thing as a credit score, just based on FICO’s credit reporting algorithm. The FICO scoring system is similar to most other credit scoring companies and thus a helpful guide for what factors affect your score. Under this system, there are 5 key factors[1]:

1. 35% of your score is based on your payment history:
   • Includes late payments – the later they are, the worse for your score
   • Includes accounts sent to collections
   • Includes bankruptcies, liens, foreclosures, and other public info
   • Takes into account the time the time since a missed payment and frequency of missed payments
2. 30% is based on your credit utilization:
   • Calculated by comparing your available credit to the amount you utilize – lower utilization is better for your score
3. 15% is based on the length of your credit history:
   • Old accounts can help boost your score
4. 10% is based on new credit accounts/ how many total accounts you have open:
   • Opening new accounts requires a lender to do a hard inquiry, which can temporarily lower your score
   • Opening may new accounts within a short period of time may lower your score
5. 10% is based on the types of credit you have (your credit diversity):
   • It is better for your score to have a mix of accounts – such as a mortgage loan, car loan, and credit card loan

What is the Deal With “Freezing” my Credit and When Should I do That?

A credit freeze temporarily stops lenders from accessing your credit report. People may freeze their credit if they have been the victim of fraud and are worried that the fraudster is attempting to open new accounts in their name. Freezing your credit will not lower your score and is free to do, but you must remember to un-freeze your credit (and dispute any fraud on your report) prior to opening a new account. To freeze your account, visit each of the three agencies’ websites and follow the instructions.

Conclusion

The best advice when dealing with your credit report and credit score is to be proactive – check what is on your report regularly and make sure it is accurate, dispute errors, and initiate a credit freeze when necessary. Do not be passive when it comes to your credit – investing in your financial health requires more than checking your score.

Schedule a consultation with Wynn at Law, LLC today to discuss your debt relief options and how the options affect your credit report and credit score.

Contact us today for a consultation at 262-725-0175 or our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has three office locations: Lake Geneva, Delavan, and Salem.

[1] How are FICO Scores Calculated? | myFICO

The post Credit Reports – How to Find Yours, What To Expect From Your Report, Freezing Your Credit, and More appeared first on Wynn at Law, LLC.

What to Know Before Using Your Property as an Airbnb, VRBO, or Other Short-Term Rental In Wisconsin:

1. Know Wisconsin State Law Governing Short-Term Rentals

In 2017, Wisconsin enacted a new short-term rental law to combat restrictions that municipalities and other local governments were placing on short-term rentals. The law defines short-term rentals as those for residential dwellings that are offered for rent for less than 30 consecutive days.[1] This law is codified as Wisconsin Statute 66.1014, and has been termed the “Right to Rent Law” as one of its main purposes is to prevent “political subdivisions” (defined as: cities, towns, villages, or counties – which will be referred to as “municipalities” in this blog) from prohibiting property owners from renting their residences for seven consecutive days or longer. Therefore, municipalities can place restrictions on rentals that are shorter than 7 days, so long as they do not conflict with State law. Municipalities may also place restrictions on rentals that are between 7 and 29 consecutive days, but these restrictions must still allow a short-term rental host to rent for at least 180 days a year. The Right to Rent law also requires anyone who rents their residence for more than 10 nights a year to purchase a touring rooming house license from the Department of Agriculture, Trade and Consumer Protection (DATCP). These licenses cost $110 per year and require a one-time inspection fee of $300.[2] The law allows municipalities to also require their own licenses, which must be purchased in addition to the DATCP license to lawfully conduct short-term rentals. The last state player in the short-term rental game is the Wisconsin Department of Revenue, which requires an owner of a short-term rental to report and pay Wisconsin state sales tax on rentals.[3] Websites like Airbnb and VRBO will collect and remit the sales tax for you.[4]^,[5]  These websites also collect other county and local taxes, if applicable. Essentially, the Right to Rent law sets the framework for what laws municipalities may enact. The law encourages municipalities to enact their own ordinances on short term rentals to limit nuisances and keep residents happy. Each municipality can choose its own registration and inspection requirements, fees, and other limitations. This is why it is extremely important to know your municipality’s short-term rental requirements.

2. Know Your County and Municipality’s Laws and Ordinances Governing Short-Term Rentals

Before going straight to renting your home, first consider whether your county has any restrictions. Walworth County has its own ordinance, which requires short-term rental owners to obtain a County License.[6] The County License has a $500 fee for the first year and a $200 annual renewal fee thereafter.[7]^,[8] Along with the County license, an owner must submit the property rules that apply to the rental, which have certain requirements of their own.[9] Keep in mind that Walworth County and the State of Wisconsin have additional requirements for short-term rentals that are serviced by a private septic system, serviced by a private well, and located on a lake. To ensure that all County requirements are met, be sure to read up on Walworth County’s Code of Ordinances and consult the County’s Land Use and Resource Management Department. Other municipal code regulations on short-term rentals that may apply include:

• Proof of property and liability insurance,
• Number of parking spaces that must be offered,
• Proof of floor plan specifications,
• Fire inspection,
• Business registration,
• Nuisance regulations,
• Quiet time hours,
• Local property manager requirements

3. Know Your Homeowner Association’s Restrictions on Short-Term Rentals

Something you may have noticed about the Right to Rent law is that the definition of “political subdivision” does not include a homeowner’s association. This means that associations can place complete restrictions on short-term rentals. The trend with associations within Walworth County seems to be placing a ban on short-term rentals altogether to stay consistent with the association’s goals and other rules. Banking on using a residence located within an association as a short-term rental is risky, as the association could vote to prohibit short-terms rentals in the future. If your residence is part of a homeowner’s association, you should make sure to read the association’s rules and bylaws. Another thing to look out for are associations that are currently inactive – the creation of a homeowner’s association should show up on the title work that is ordered when you purchase or sell a residence. An inactive association is still an association that can be brought back to life by its members, whether those members are composed of the owners of residences within a subdivision plat or a developer. If your residence is part of an association, this is the first place you should look to in determining whether a short-term rental is allowed.

4. Consider the Advantages and Disadvantages of Short-Term Renting

If you are considering using your property as a short-term rental, not only should you make sure that you are abiding by state law, local law, and any homeowner’s association restrictions, but you should also consider the advantages and disadvantages of short-term renting. Financially, short-term renting can not only brings in more income than a long-term rental, but also may allow rental owners to claim tax deduction benefits for things such as property maintenance, insurance, and utilities. Additionally, as a short-term renter, you can be flexible and choose to rent as much or as little as possible. While the financial freedom and flexibility that comes with short-term renting is quite enticing to those looking to begin their short-term rental journey, you should also be aware of some disadvantages. Unfortunately, short-term rentals can drive up housing prices. Also, as this blog has shown, the laws regarding short-term rentals can vary between municipalities, which means that if you have multiple rentals in different locations, you will have to keep track of each municipality’s rules to avoid potential expensive fees. A third downfall is the noise and nuisances that rental properties may create – noise violations, theft, and property damage to name a few. Lastly, be sure to check your homeowner’s insurance policy as some insurance carriers will not cover any damage that occurs at a property when the home is being used as a short term rental.

Conclusion

Wynn at Law, LLC assists clients who are looking to purchase property to be used as a short-term rental, clients selling short term rentals and clients who are purchasing property already used as one. Attorney Shannon Wynn or Attorney Ciara Doherty can help navigate buyers as to where to look to ensure a short-term rental is allowed, can review and explain title work that may have restrictions on short-term renting, and can help buyers feel empowered and informed throughout the entire process.

Schedule a consultation with Wynn at Law, LLC today to discuss the purchase or sale of short-term rented real estate.

Contact us today for a consultation at 262-725-0175 or our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has three office locations: Lake Geneva, Delavan, and Salem.

SOURCES: [1] Wis. Stat. 66.0615(dk)

[2] DATCP Home Tourist Rooming Houses (wi.gov)

[3] DOR Homeowners and Individuals Selling Short-Term Lodging (wi.gov)

[4] Collection and remittance of taxes and lodging taxes | Help (vrbo.com)

[5] Occupancy tax collection and remittance by Airbnb in Wisconsin – Airbnb Help Center

[6] Walworth County, Wisconsin Code of Ordinances. Chapter 26, Art. VII. ARTICLE VII. – OFFERING A RESIDENTIAL DWELLING AS A SHORT TERM RENTAL | Code of Ordinances | Walworth County, WI | Municode Library

[7] Wisconsin Division (walworth.wi.us)

[8] Wisconsin Division (walworth.wi.us)

[9] See Walworth County Code of Ordinances, Chapter 26, Art VII, Sec. 26-343.

The post Wisconsin Law on Airbnbs, VRBOs, and Other Short-Term Rentals appeared first on Wynn at Law, LLC.

There are three types of wills about which you should give some thought. The Last Will and Testament is what most people know about and refer to generally as a “Will.” In addition to the Last Will and Testament, there is also a Living Will and a Pourover Will.

The Last Will and Testament

There are dozens of online templates that suggest you can do this yourself. The problem with that is simple: How many have you done? An experienced attorney will help you create a legally binding document that specifically suits your needs, expresses what your final wishes are, and is tailored to Wisconsin law. That’s so important, because the tool speaks for you after you pass on, directing how you want assets divided and appointing who will be in charge of acting on your estate’s behalf.

The Living Will

The Last Will and Testament becomes effective at your passing, while the Living Will speaks for you when you are unable to speak for yourself due to injury or illness. This document makes known your wishes regarding life prolonging medical treatments. This tool, also called an advanced directive, is every bit as important as the Last Will and Testament. However, a University of Pennsylvania Philadelphia study found that less than a third of adults have a Living Will.

The Pourover Will

We’re covering Trusts next in this series, but you should know that this particular tool can save the day for your loved ones. When you forget or neglect to add all property into your planning documents over the years– and people do forget to go back and revise their estate plan when circumstances change – this tool puts the forgotten property into a Trust. This tool got its name because any assets you failed to title into your trust prior to your passing will “pour over” into the trust after you are gone.

Stay up to date

You’re going to want to review all of these Wills and your wishes periodically, too, because ‘life happens.’ In the following two articles on the Estate Planning Toolbox, Wynn at Law, LLC, guides you through Trusts and Powers of Attorney.

The post Your Estate Planning Toolbox: The Will appeared first on Wynn at Law, LLC.

An easement on a property allows a landowner to grant access to a part of his or her property. You grant access without giving up ownership of that part of the property. It’s a binding agreement. Where we see this commonly throughout southeast Wisconsin is allowing access to a walking path, a driveway, a community pier, or a utility line crossing the property. Without an easement in place for access to such things, anyone attempting to access the path, pier, driveway or utility pole would be trespassing on the property. You can see the legal ramifications.

That means: Talk to your real estate attorney anytime the word comes up. Here are a few spots in which the topic may come up.

If you are buying a property

Two easement issues Wynn at Law, LLC sees frequently are easements for driveways and for lake rights or lake access. When there are disputes over the area of the easement, or the size or the situations for which the property can be used, it can sour a neighborhood. Nobody wants to be ‘that neighbor,’ especially when you’re new to the neighborhood. By the way, if a lender is involved, the lender may take issues with driveway easements. Driveway easements require you to have legal access to your property. Imagine the difficulty clearing up the easement specifics after the closing.

If you are selling a property

When you know of an easement exists, you should disclose that to potential buyers on the real estate condition report. If you do not have a written easement in place or it is not recorded with the Register of Deeds Office, Wynn at Law, LLC can assist you in drafting and recording the easement.

Your relationship with your neighbors is the important aspect of easements. It is important to have a lawyer review easements on your property because it is your property.

Image by Anna Koldunova, used with permission.

The post No such thing as an ‘easy’ easement appeared first on Wynn at Law, LLC.

Title insurance protects the buyer and the mortgage lender in the event a future problem is found with the title. Having an experienced Wisconsin real estate attorney on board early reduces the possibility that a problem will be found later. An experienced Wisconsin real estate attorney explains the title commitment to you. Most importantly, the attorney makes sure you understand liens, easements, and deed restrictions which remain on your property after purchasing.

Forgery, Fraud, and Heirs, oh my

Title insurance insures the piece of property with regard to claims, rights, and liens against the home or property being purchased. These claims sometimes include fraudulent titles, forged signatures, undisclosed heirs to the property, or spousal claims from ex’s. When a home is in a subdivision or is a condominium, the title insurance lists all the restrictions and covenants (rules) of the subdivision or condominium.

When Wynn at Law, LLC reviews the title, we will consult with our clients so they are aware of any title issues. The insurance, by the way, is optional if the buyer isn’t financing the purchase. A policy covering the mortgager is required by every lender when a home or second home is mortgaged or refinanced.

Three take-homes from this article:

First, from a buyer’s perspective, a buyer’s or owner’s title insurance policy is recommended even if there’s no lender involved. It is worth the relatively low cost in our experience and, customarily, the seller pays for the policy. It’s peace of mind.

Second, as the first article pointed out, when Wynn at Law, LLC is involved, our title review with the client is thorough. That doesn’t eliminate the need (or requirement) for title insurance. A mortgage company is going to protect itself. More importantly, the owner’s title insurance is like the shell on an egg – many people consider the purchase of their primary home and a vacation property as the nest egg worth protecting.

Third, the real estate attorney is not the insurer and has no role in issuing the policy or recommending a carrier. The title company or the mortgager does that. Wynn at Law, LLC does review the insurer’s title commitment with you.

Image by Aleksandar Stojanov, used with permission

The post The Real Estate Transaction, Part II: Title Insurance appeared first on Wynn at Law, LLC.