A recent article in the New York Times, reports that "about 26 million Americans lack a credit file." Ann Carrns continues by adding that these "credit invisible" consumers...lack any credit history with the major nationwide credit reporting agencies, which tends to shut them out of the economic mainstream. These findings are according to a report issued on May 5, 2015 by the Consumer Financial Protection Bureau. "An additional 19 million Americans, or 8 percent of adults, have some credit history, but not enough to create a score. Eighty percent of adults, or about 189 million people, have credit scores."Read more »
: Poor credit history and a bad credit score can have a serious impact of your life. No one wants bad credit. Sometimes mistakes happen. Sometimes factors like medical bills, job loss and tragedy influence our financial profile in ways we never could have predicted. Bad credit can happen to anyone. But now what?
If you’re wondering how to repair your credit score, you are not alone. The widespread decline in credit scores has been one of the side effects of the recession but this doesn’t mean that you can’t pro-actively take the steps to start repairing your credit.
Factors that Damage Credit
First let’s clarify what can lower your credit score and damage your credit profile.
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- Excessive Debt: If your credit cards are maxed and you have several loans, your debt profile is probably contributing to your low score
- Late Payments: The credit bureaus note any 30, 60, 90 & 120 day payment lates. It is essential that you pay your bills on time.
- Dormant Credit: A dormant credit card is an account that has infrequent or no use. In some cases, if an account has no activity for a period of time, issuers may close the account which revokes future charging privileges. Dormant accounts may not have additional debt but they also don’t help your credit score.
- Collections: If you fail to make a payment or pay off your account – the creditor may send your account to collections. This severely affects your score. Make sure to work closely with your mortgage or credit professional regarding paying off collections. Note: Collections on federal loans such as student loans will prevent you from getting financing from most (if not all) lenders.
Everyone will tell you that there are financial benefits to owning a home but it’s important not to forget other positive reasons that have nothing to do with money.
1 – Security
If you’ve been a renter before, you know that your ‘rights’ are limited and many times the possibility of moving rests on the whim of your landlord. When you buy a home
– it puts you in control. As long as you make your payments, you are the master of your castle and that security can help you sleep better at night. Read more »
During most real estate transactions, it will become necessary to have a home appraisal done on the subject property. This formal process of evaluation is the most effective way to determine the current value of a home not only for a buyer and seller but also for the lender who is providing financing for the purchase or refinance. While the concept might not be initially confusing, there are several misconceptions about the industry that can make the process seem complicated. Understanding what the appraiser does and how their evaluation plays a role in your financing can make the transaction easier.
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Few can truly describe the moment in which you are financially free. Free from debt. Free from living paycheck to paycheck. Free from financial worry. Building a comfortable savings and eliminating debt is possible at any age with smart planning.
According to Forbes.com, it’s easy for people to answer questions like “Do you want to pay off debt?” or “Do you want to save money?” however, deciding whether to pay off your home mortgage
becomes more complex. Often this stems from a commonly held belief that paying off your mortgage is impossible or strategically foolish. Let us point out that it is very possible to pay off your mortgage (and not just in a distant 30 years), and when over 75% of those on the Forbes 400 list advocate paying off your home as quickly as possible, it’s viable to look at the reasons why. Read more »
Thinking of purchasing a home in the near future? Understanding what a lender is looking for (and avoiding) is key to enjoying a smooth process.
A preliminary step to buying a home is getting pre-approved
. This process involves an initial submission of your financial picture to your loan officer to see if you initially qualify for financing and obtain an estimate of how much the lender is willing to lend you. Unfortunately, many people believe that once they have been pre-approved for a mortgage – the loan is guaranteed. Nothing could be further from reality. Your loan can be denied by the lender AFTER being pre-approved and it happens often. Read more »