Daily Real Estate News August 29, 2007
FalloutThe credit card business to date seems to have escaped the growing reach of the subprime meltdown, with card delinquencies remaining flat even as defaults have skyrocketed among homeowners, but analysts at Merrill Lynch say the sector's resistance to the turmoil be weakening. "The next shoe to drop from this subprime mortgage fiasco, which has already fed into the asset-backed market, is probably going to be the credit card business," according to Merrill Lynch economist David Rosenberg.
Credit card borrowing was up 11 percent in May and June, likely because homeowners are using plastic to pay for daily expenses to free up more cash to make their mortgage payments. Moreover, while borrowers previously have tapped into mortgage equity to produce the money needed to resolve credit-card and other debt, a Goldman Sachs report notes that "cash-outs" peaked during the fourth quarter of 2005.
Source: Investor's Business Daily, Reinhardt Krause (08/27/07)
Wednesday, August 29, 2007
Give your credit score a makeover
now that the kids are back in school and before holidy shopping starts; AND while its still a buyer's market - yes you need to be buying NOW not waiting for prices to go lower. Nohting happens until YOU and I put pen to paper; let's make sure those clredit reports are in order.
read below to get started:
A few moves could improve your rating and even save you some cash.
Your credit score can be the difference between getting a good home loan and getting stuck with higher monthly payments. And with lenders tightening their standards, it's even more important that you improve your credit score as much as you can. We're going to tell you how.
Most mortgage lenders look at your FICO score. What exactly does this score take into account?
Your payment history, which makes up the biggest chunk of your score, looks at how often you pay your bills on time. The amount of debt you owe is considered equally important. The amount of time you've had your credit cards and how much new credit you apply for all play a role in determining your score.
Most mortgage lenders look at your FICO score. What exactly does this score take into account?
Your payment history, which makes up the biggest chunk of your score, looks at how often you pay your bills on time. The amount of debt you owe is considered equally important. The amount of time you've had your credit cards and how much new credit you apply for all play a role in determining your score.
1: Pay off your debt
You want to aim for a score in the 700s to get more favorable loan terms. The national average, according to Fair Isaac, is a FICO score of 723. And the best way to improve your credit score in the short term is to pay off the high balances on your credit card - that can raise your FICO score 60 to 70 points overnight, says Craig Watts of Fair Isaac.
Credit bureaus can predict how much of a credit risk you are by how you handle credit card debt more than any other kind of debt, like student loans. That's because with installment loans, like mortgage payments, there is a predetermined amount you pay each month. With credit cards, you're in control of what debts you have.
You want to aim for a score in the 700s to get more favorable loan terms. The national average, according to Fair Isaac, is a FICO score of 723. And the best way to improve your credit score in the short term is to pay off the high balances on your credit card - that can raise your FICO score 60 to 70 points overnight, says Craig Watts of Fair Isaac.
Credit bureaus can predict how much of a credit risk you are by how you handle credit card debt more than any other kind of debt, like student loans. That's because with installment loans, like mortgage payments, there is a predetermined amount you pay each month. With credit cards, you're in control of what debts you have.
2: Minimize your balances
Even if you pay your bills off every month, the amount you paid will be listed on your credit report. And if you spend more than 50 percent of your credit limit, that's going to negatively impact your score. In fact, you could lower your score 60 or 70 points, says Watts.
And that could make the difference between getting a good mortgage rate and a bad one. If you're within three months from applying for credit, make sure you don't charge a lot on your cards, or split the purchases between a few cards, so you keep the balances down.
Even if you pay your bills off every month, the amount you paid will be listed on your credit report. And if you spend more than 50 percent of your credit limit, that's going to negatively impact your score. In fact, you could lower your score 60 or 70 points, says Watts.
And that could make the difference between getting a good mortgage rate and a bad one. If you're within three months from applying for credit, make sure you don't charge a lot on your cards, or split the purchases between a few cards, so you keep the balances down.
3: Hang onto older cards
As we mentioned, your FICO score looks at how long you've managed your credit. So the longer you've managed your credit wisely, the better your score. If, for example, you have a card that is at least 5 or 6 years old, it's not a good idea to close those accounts.
At the same time, opening any new lines of credit - whether it's a retail credit card or a new car loan - will almost certainly lower your score by a few points.
As we mentioned, your FICO score looks at how long you've managed your credit. So the longer you've managed your credit wisely, the better your score. If, for example, you have a card that is at least 5 or 6 years old, it's not a good idea to close those accounts.
At the same time, opening any new lines of credit - whether it's a retail credit card or a new car loan - will almost certainly lower your score by a few points.
4: Don't sweat the little things
We've already told you what impacts your score. But here are some things that don't matter to your score at all. Your score won't be affected if you request your own credit record, or if you go for credit counseling.
We've already told you what impacts your score. But here are some things that don't matter to your score at all. Your score won't be affected if you request your own credit record, or if you go for credit counseling.
It also won't impact your credit score if your employer or other lenders look at your credit score and try to solicit your business.
Subscribe to:
Posts (Atom)
Get Updated When This Page is Updated
Monthly Home and Garden Tips
Monthly Home and
Garden Care Tips