Dear Liz: We have owned a timeshare since 2007. It’s paid in full. We are no longer using it and want to stop paying the annual maintenance fees. Can you help us? Selling or giving it away has been difficult. Should we simply stop paying the maintenance fees? And at 71, what could be the potential impact?
Answer: Timeshare developers have various policies regarding unpaid maintenance fees. If the developer sends your account to a collections agency, it can negatively affect your credit for up to 7½ years.
Instead of abruptly stopping payments, consider contacting the developer first to ask if they would take back your timeshare. While only a few developers have formal surrender programs, many will consider accepting it as long as you have paid off the timeshare. Request to speak with the person in charge of surrenders or “deed backs.”
If the developer is unaccommodating, there are other options available to you. Websites like the Timeshare Users Group and RedWeek have online marketplaces where you can list your timeshare. You may need to offer to pay the maintenance fees for a year or two to incentivize someone to take it off your hands. Renting out your timeshare is also an alternative, as it can potentially cover the maintenance fees.
Be cautious if someone approaches you offering assistance to sell your timeshare, as it is likely a scam. To find legitimate brokers who facilitate sales, you can contact the Licensed Timeshare Resale Brokers Association. However, keep in mind that these professionals primarily deal with high-end resort sales.
Dear Liz: My partner and I recently retired, and we will own our home without a mortgage in about six months. We are concerned about the impact on our credit ratings. Will not having regular mortgage payments affect our credit scores? If so, how can we find a good substitute?
Answer: Once you pay off your mortgage, there is a possibility that your credit scores could decrease, especially if you don’t have another installment loan such as a vehicle or personal loan. Typically, having both installment loans and revolving accounts like credit cards contribute to maintaining high credit scores.
The good news is that you don’t necessarily need the highest credit scores to secure the best rates and terms from lenders. By using credit cards judiciously and regularly, you can maintain good scores without incurring debt.
Dear Liz: You recently recommended implementing a credit freeze as a way to protect one’s credit. I agree that it’s a wise decision, but I’ve encountered challenges when attempting to unfreeze my credit reports. Banks often don’t disclose which credit bureau they check, leaving me to temporarily thaw reports at all three bureaus. However, I have faced difficulties with this process. Only one bureau worked well, another temporarily failed to access my information, and the third didn’t recognize my usernames or even my Social Security number and date of birth. It appears that part or all of their database was offline. I am confident that my information is correct, so I conclude that the bureau is experiencing technical issues. Despite spending two days on this, I have only received a satisfactory response from one out of the three services.
Answer: Freezing and unfreezing credit reports have become easier and faster, now that these services are free by federal law. However, it is crucial to keep track of your account credentials for each credit bureau, including login IDs, passwords, and personal identification numbers.
You may choose to document this information in a secure location or utilize a password manager for added convenience. Password managers offer secure software programs that generate unique credentials for each website you visit. Given the prevalence of data breaches, it is vital not to reuse usernames and passwords. Additionally, these programs assist in regularly changing passwords, contributing to enhanced security.
Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
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