Credit Corner

Bad news: The new FICO score changes could impact the credit cards you qualify for If you’ve been carrying credit card debt, you could see a drop in your credit score soon. Fair Isaac Corp., the creator of the FICO score, announced on Jan. 23, the new FICO 10 model, which is expected to cause scores to fluctuate roughly 20 points. This change comes on the heels of the average FICO score hitting a record high of 703 earlier this month....Continue reading

Never had a credit card before or building your credit from zero? Here’s the best starter card for you. We recommend young people start building credit as soon as possible (age 18), but if you’re just beginning your credit journey, there is one credit card that you should consider. The Discover it Secured is the best credit card for beginners. It is a well-rounded secured card that offers many perks and benefits typically found with unsecured cards. While there are thousands...Continue reading

How to build credit and achieve a good credit score Achieving a good credit score is essential if you care about your overall financial health. When you have good credit, you increase your qualification odds for credit cards and receive some of the best interest rates on various credit products. But building good credit doesn’t happen overnight. Instead, you need to consistently practice responsible credit behavior, such as paying bills on time and limiting debt....Continue reading

Goodbye to bidding wars: Some of the hottest housing markets are falling the hardest. It was just last spring that home buyers in most of the nation were digging ever deeper into their pockets, bracing for a bidding war on whatever property they chose. And now, suddenly, they're not. Home sales have slowed to a crawl nationally, and it's not just the winter temperatures. The market's pulse has become weaker, especially in areas that were hottest just last spring. Just 32 perc...Continue reading

Understanding the FICO Score Ranges Your FICO Score powered by Experian data can range from 300 to 850 and can influence what credit is available to you, how much interest you'll pay and even things such as your utilities and mobile phone options. Knowledge about your credit, about the impact it has on your future, about the world in general is powerful. If you're on the lookout to be better versed about your credit, consulting your FICO Score could be a great place to s...Continue reading

Schools Teach People How to Be Poor! Think back to being in school. We all learned subjects like Geometry, English, History We learned who the 23rd President was (by the way, it was Benjamin Harrison). ... Some of us may even have majored in Economics. But did anyone teach us about how we could actually make money in our own lives?! It’s no secret that I think its a huge problem that schools don’t teach financial literacy. Our kids graduate from high school and even top universities without understanding the first thing about money and personal wealth. But as bad as that is, it's actually much worse. I know this is a bold statement, but I believe schools are teaching people how to be poor. Here is the message schools are pumping into our kids’ heads: 1. Get an Education 2. Get a Good Job 3. Get Promoted 4. Earn a Higher Salary Then - They tell us to save part of our pay (the part that the IRS doesn’t raid first). - They tell us to put that money into savings accounts (with interest rates that don’t even keep up with inflation). - They tell us to invest into 401Ks (which are managed by someone else). Here’s the problem: getting rich under this paradigm is mathematically impossible. In fact, the system is designed to keep most people poor. Or at least working hard their entire lives just to keep their heads above water. We have been so indoctrinated by this ideology, this employee mentalitythat we believe we don’t have a choice. We think to ourselves, It’s just the way it is, and there is no alternative. We think a person has to be born rich to get richer. We’ve been taught: It takes money to make money. Maybe this was partially true once. Today, it’s nothing more than an excuse. Why? Because of the internet. We’re in the information agethe age of self-education. We all have access to the internetbut it’s how we use it that determines our potential. What most people don’t realize is that we can become wealthy by educating ourselves. We can make money for the work do as entrepreneurs. It's simple. We just ignore everything that we learned in school and stop looking to a J-O-B to make us wealthy. We can do it on our own. With the right mindsetand the right know how.

Forget college tuition. Annual childcare costs exceed $20,000. The typical middle-class family can expect to pay about $40,000 for four years of tuition, fees, books, room and board at a University, if they are state residents. Across the country, the average annual cost of childcare is approaching parity with the cost of in-state tuition at some universities....Continue reading

Want to buy a house? How long you'll have to save depends on where you live If homeownership is your American dream, here is a wake-up call. It could take more than six years to save up for a down payment. High rents and high home prices have hit affordability where it hurts, lengthening the amount of time most potential buyers will need to even think about financing a home. For the average renter buying the median-priced home in America, it will take about 6 years to save f...or a 20 percent mortgage down payment. In some places it can take more than two or three decades to save that much. If the median U.S. home value, according to HotPads, is $216,000, then 20 percent is $43,200. If a renter making the median income were to save 20 percent of that income each month, it would take 77 months to get that down payment. The current generation of first-time buyers is dealing with unprecedented levels of student debt, making the down payment a major factor keeping young renters out of the housing market even though many young people say they have ambitions to buy. While some high earners may manage to save more than the recommended 20 percent of their income, or may have the good fortune of windfalls such as family assistance, inheritance, or large bonuses, most young adults struggle to save. Rents have been rising at a fast clip for several years. The typical renter spends 34 percent of his or her income on rent, which is more than the 30 percent some financial experts recommend. Mortgage lenders usually require that a borrower pay no more than 43 percent of income on total debt in order to qualify for a loan, a provision of new government lending rules implemented after the financial crisis. That debt would include mortgage payments, in addition to things like student loan debt, auto and credit card debt. All real estate is, of course, local, and so it will take potential buyers longer in some markets to save for a down payment. Renters in 13 of the nation’s 35 largest markets may need more than a decade. In very expensive markets, like San Jose, California, Los Angeles and San Diego, it could take more than two and even three decades. In cheaper markets, like Pittsburgh, Cleveland and Detroit, it might take around four years, because these renters spend less of their incomes on rent. There are other options than putting 20 percent down, however. First-time buyers often turn to FHA loans, which are government insured. They have a minimum down payment of 3.5 percent, although they also require mortgage insurance payments. For veterans and their families, down payments can be as low as zero. Fannie Mae and Freddie Mac also have fixed-rate mortgage programs requiring just a 3 percent down payment, but they also require mortgage insurance, adding to the monthly payment.

The housing shortage may be turning, warning of a price bubble. The most competitive, tightest housing market in decades may finally be loosening its grip, and that could put pressure on overheated home prices. The supply of homes for sale in the second quarter of 2018, the all-important spring market, rose at three times the rate of the same period in 2017. The inventory jump was the largest quarterly improvement in three years and could be signaling a slight thaw in today’s...Continue reading

Homeownership eludes millions of millennials. There are a whole host of reasons, including personal preferences and economic disadvantages, that explain why the homeownership rate for the largest generation in U.S. history is lower than that of their parents and grandparents. As a baby boomer, you bought a home as quickly as you could and didn’t take a vacation for years to save for the down payment on your first home...Continue reading

This common credit card myth is costing millions of Americans This is the impossible to kill cockroach of finance myths; If you’ve ever carried a balance on a credit card thinking it would help your credit score, you’re not alone. About 43 million Americans, which is 22 percent of credit card users, have carried a balance to improve their credit score. Unfortunately, carrying a balance is not one of the five main criteria that makes up a credit score, though how close you com...e to your spending limit is. Extra interest Carrying a balance could hurt you in other ways, however. For one, carrying a balance means that you are subject to paying unnecessary interest. The average American has a balance of $6,375. This debt has climbed 3 percent from a year ago, and interest rates on credit cards have increased since then, as well. The national average APR is over 16 percent, up a percentage point from 2017. It’s painful to know that so many millions of Americans are essentially attempting to pay their card issuers to improve their credit scores. Even if this were true and carrying a balance could improve your credit score, the boost would not be worth paying extra interest. In addition to burning a hole in your wallet, having a balance could also hurt your score if it grows too much. One of the items that does comprise your credit score is your utilization rate, or debt-to-credit ratio. The higher the amount of debt you have relative to your total amount of available credit, the worse this rate will be. Pay your card on time The other big factor that goes into determining your credit score is payment history. Paying on time is an issue for many credit card holders; over 40 percent have paid a bill late. Nearly two-thirds of those were for no good reason such as they forgot, were busy or travelling. Women, minorities and parents with young children are the most likely to pay late. Millennials are also the most habitual late payers with 1 in 10 saying that they’ve paid late five or more times. While money is a factor in paying late, having more of it doesn’t seem to increase financial responsibility; 35 percent of late payers say they don’t have enough money to pay on time, but higher earners are more likely to admit that they pay late because they are careless. Credit doesn't have to be complicated. If you are looking to improve your credit score, be aware that you cannot game the system. To improve your score, the best things you can do are simple: Pay your credit card bill on time and in full every week. After that? Lather, rinse and repeat for many years.

#word from the #future

Subprime mortgages make a comebackwith a new name and soaring demand They were blamed for the biggest financial disaster in a century. Subprime mortgages home loans to borrowers with sketchy credit who put little to no skin in the game. Following the epic housing crash, they disappeared, due to strong, new regulation, and zero demand from investors who were badly burned. Barely a decade later, they're coming back with a new name nonprime and, so far, some new standards...Continue reading