The reason most people are in debt today is because they only look at the minimum payment -- totally ignoring the balance on their credit card and also the interest rate the credit card company is charging.
How much time will your car, your mortgage, and retirement saving cost you?
While new credit only accounts for 10% of your FICO score, it really can't be ignored. If you're young and don't have a lengthy history, opening up a new account can hurt your score as too much credit is generally considered risky. If you have what might be construed as too many accounts, then the thought is that it's too much to keep up with, especially all those different payment dates.
Although the length of your credit history only weighs in at 15% of your score, it is still vitally important. Don't confuse this with your payment history; your payment history is the quality part, while your payment length is the quantity part.
Although there's still a lot of uncertainty in the housing market, the drop in home prices has made home ownership very alluring. However, you may think you don't qualify for a mortgage. It might not be as bad as you think.
There are several provisions of the 2009 Credit Card Act that are intended to help consumers. Whether these provisions are changing consumers behavior is another matter.
Last week we discussed how your credit history accounts for 35% of your FICO score. The next biggest component comprising your score is the amount of debt you have which comprises 30% of your score. That means nearly two-thirds of your credit score is made up of your history and your amount of debt.
Conventional wisdom is you're better paying off your own mortgage than someone else's, which is what you're doing when you're renting. However, as we've seen in the last couple of years, the housing bubble burst and perhaps this isn't true anymore as we've witnessed house prices plummeting in certain areas of the country.
Your FICO score ranges between 300 and 850; the higher your score the more likely you'll get charged lower interest rates on loans, you'll have lower insurance premiums and you'll get a job. The best way to improve your FICO score is to focus on your history.
Much to your horror, you may be surprised to find that your doctor bill can continue to cost you long after you've paid it.
We live our lives around what we're taught growing up. Sometimes we will start to believe differently when we experience the real world and realize some of what we've been taught really doesn't make sense. Many beliefs around money are learned early in life and sometimes we just can't shake them.
My father graduated from Harvard Law School in two years; he was a smart man. However, he always said, "I don't need brains, just 'Lady Luck.'"
It's sometimes hard to find the cash we need, especially these days. Many people have been borrowing against their home. Only on rare occasions is this the wise thing to do.
When many people plan to buy a house, they know part of the plan will be to get a mortgage. After all, not many people have the money to pay cash for a house. They think that a mortgage is good debt, because the value of the house will be increasing while the amount they owe on it will be decreasing as they pay the principal.
The government has three plans to replace the two institutions; in any event, they probably won't be dissolved quickly, as this would create a shock in the mortgage market. Regardless, this will mean the private market will step into the mortgage business and getting a mortgage will be more expensive.
I've always said that if you follow housing you follow the economy.
The first step to aiding our economy is to get those homes that are stuck in the foreclosure process to proceed.
If you're looking for a house, you may first need to look at your bank account. Gone are the days of low, or even zero down payments.
With the recession and so many people out of work, it is becoming more and more difficult to keep your home. No one wants to lose the equity they've worked so hard to build.
Yesterday I blogged about whether an under 30-year-old with student debt should buy a house. The alternative, besides living with your parents or in your car, is to rent.
Many seniors graduating from school already have a mortgage on their hands. I've spoken to several people who have student loans totaling over $150,000. Your best first step would be to start paying down on that student loan and start saving for a down payment.
