Credit Score Road Map: What Affects Your Credit Rating?

It has always been a misinterpretation among the populace that when the interest has fallen in the market more people will have the opportunity to get great interest deals. FICO, the company that measures credit scores has estimated about 50 percent of the American population has a score lowers than 699 at the end of last year.

A low credit score means one has limited financial options and must be given high interest rates; this will also mean more losing more money. When you are facing this current dilemma, it can be quite difficult to look for help. However, the first step in effectively repairing your credit is to get educated. If you understand the system and the regulations on how to get a good or bad credit then you can adapt and start correcting your errors.

Here are some factors that have an impact in your credit scores: first is your history of bill payments which can account 35 percent of your score. This reflects your credibility as a payer. This will also tell lenders if you are a responsible client, they would check how consistent you are in paying your bills, your collections, and your tax records. This just means that you should clean up your history and start with a clean slate.

Second, how frequently you use your credit. This would account for about 30 percent of your score. This includes the amount of loans you have, and your total liabilities with the credit cards you currently have. In order to make a better image of yourself in this category, you should be focused on having long term loans and repair your credit standing. Keep your spending impulse away and always keep in mind that a little debt can be good.

Third, credit history length, this represents 15 percent of your credit score. A long history can be positive because it would show that you have lots of experience. To make this work for you, remember to always keep your credit card active and make sure you do not inactivate it by not using it.

Fourth, new credit accounts this consists about 10 percent of your score. This however can be negative because short-term accounts can be very deadly to your score. If you apply in too much credit card loaners at once it can be risky and hard to control. So a useful tip to consider is to repair your credit and set your priorities straight before you plan to open a new account.

Finally, the type of cards that are currently under your name, this consists another 10 percent of your score. This is not about the debt that each card has but how it is diversified among different loans like student loans, apartment lease, car loans and mortgages. It would be smart to take in different types of debt in order to expand your prospects.

Applicant Credit Scores Keep Canal Cove Homes Empty

Canal Cove currently feels like a ghost town as the lots in the neighborhood stay empty. According to the Myrtle Beach HousingOfficials of the estate, their search for qualified homeowners and occupants are taking longer than they thought it would.

Nora Burton, a tenant in the subdivision, shares her story. She says she always wanted to own a house and this led her to apply for a home in the place. She says it gives one a great sense of self-respect and accountability.

She shares that the classes that were given by the authorities have been very helpful for her. She learned about how to manage a home and the responsibilities of being a homeowner. Furthermore, she was able to have her record intact and her scores are now spotless.

According to the Homeownership Coordinator for the Housing Authority of the premises, Theresa Ross, she has personally met the Burton family and they are very close in meeting their desired qualifications for being a homeowner in the premises.

She further states how important it is to have a 620 credit score to own a house and their liabilities to be more than the normal limits. The credit report according to them is the most important information they need from their customers.

Currently, none of the 52 applicants are able to reach their standards. Ross says that the loan officer of the estate, Dan Dickson says that he has found clients that would qualify through their income but not everyone is going to be able to qualify.

However the most important qualification though is still the credit score and the credit report of the tenant. Dickson said that once a person is serious about getting a good credit score he can do something about it.

He further states two reasons why credit scores go low, that is the lack of money or late payments and collections. He says the faster a bill is paid the faster one’s credit is going to be cleared.

Store Credit: Not Always A Bad Idea

High interest rates poses to be the disadvantage of store credit cards, this is according Consumer Reports Money Adviser in their May issue. However, if the card you got is from a retail store you shop in often then you can actually gain from the rewards.

First you have to know the difference of a debit card and a credit card, you should know what kind of card you are going to get. In some stores offer a credit card that is intended to aid in making costly purchases. Be firm with your decision; if you know that you will not need a credit card do not let the counter convince you into opening an account.

Once you get a card, you have to stick to it and pay off every monthly balance. These cards have high interest rates so if you have problems in paying off your current monthly bills then it would be wiser to just decline a card if it would just require you to struggle in even deeper debt.

Next, get a store card that meet you’re shopping needsfor example, the APR in Kohl’s card is lesser than that of Macy’s but it will not be very beneficial if you shop in Macy’s store more frequently. Some cards have rewards that great rewards but you have to be aware of other downfalls, like for example Costco and American Express’s  True Earnings Card that gives you 3% cash back for the first $3,000 purchases you make, then you will only get 1% cash back.

There are cards that also offer rewards and a sign-up bonus like the Amazon Rewards Visa Card. You get a $30 Amazon.com gift card that is accumulated in your Amazon account, and you get a lot of other perks like the three points for every dollar spent on Amazon.com. So always check the card thoroughly if it will really benefit you.

Cards can also help build credit for some people with the help from their credit financial intermediaries and banks. However, do not be unwise as to apply for a dozen credit cards by impulse. Opening many accounts at once could post a really bad deal in your credit score.

It’s is enough to get one card and focus on it, pay off its monthly balance, and take advantage of the perks and rewards. If you are successful in taking care of the credit card account then for sure you can be ensured that you will benefit from your entire store card.

Guaranty Bank Facing Guaranteed Loss

The ninth largest bank the Guaranty Bank has been facing a challenge with their financial status for five years now. The amount of their losses accumulates to about $20 million; this is according to their annual monitoring data.

By the end of the first quarter of this year, the bank had another loss of about $ 5.7 million. Furthermore, its capital which protects the bank from loss from its loans is quickly slipping away.David L. Donihue, a consultant from the bank said that they are currently facing a very hard phase.

But Doug Levy, the chief executive of Guaranty says that they are progressing into a better loan portfolio, and the bank is looking for more investors to uplift and recapitalize their finances.

The largest loss of the bank was back in September 2009 when many Americans were falling into the recession and there was massive unemployment. The losses amounted to about $ 52.3 million this is according to their Federal Deposit Insurance Corp. records. The bank has belonged to the Levy family for decades and so far no one has set their eyes on purchasing the estate from them.

During their second set or mortgages a major loss has been inflicted in the bank’s portfolio. The bank has about 160 branches in Wisconsin, Georgia, Michigan, Illinois and Minnesota. Most of the branches across these five states are found in grocery stores and operate in lengthy hours, which according to Donihue is expensive for the bank.

The Guaranty has increased another $10.6 million to its loan-reserves in order to cover for their doubtful-debt accounts.

Levy says that the bank still expects to eventually regain its loss from their loans. The recession and the financial crisis have made it compulsory for banks to have more capital.The chief executive said that Guaranty has been making efforts to retrieve their old status in their financials. They are dedicated in trying to make these efforts work, though Donihue admitted that it’s not going to be easy.

CFPB Getting Points on Mortgage Points and Fees

Since the foundation of the Consumer Financial Protection Bureau, it has been conducting surveys and collecting feedback from consumers about how they view their current credit card deals, student loan providers or how they are affected by compulsory settlement cases.

Currently, the agency is trying to get the say of customers on mortgage points and fees. The company wants to make customers understand what they are paying for and have knowledge about the different deals financial intermediaries are offering.

Here are some of these policies and perks that are being pushed by the CFPB that the institutions must follow. A policy that makes certain customers who pay discount points get a minimum reduction from the interest rate. If for example a borrower would pay a discount point to get lower interest rates, the customer will be charged depending with his credit worthiness. A discount point causes 1 percent of a borrower’s total fee, so if the loan costs $500,000 then every point will cost you $5,000.

Another policy is one that requires lenders to ask customers if they want to avail a no-discount-point loan. Another policy proposed by the agency is not to allow origination fees that would vary on the loan’s amount.

The bureau also plans to collect mortgage fees and to find out the experiences and damages for mortgage lending originators, those people who take the information from people who want a loan.

Currently, theoriginations follow different protocols that are under the state and federal rules of the country. The CFPB is thinking of implementing rules that would make all the agencies follow the same standards. They would be thoroughly investigated for irregularities and fraud.

The bureau also plans to implement rules similar to what the Federal Reserve Board has. These rules would be helpful in preventing originators from charging higher amounts for the loan to generate money.

If ever these new proposals from the agencies are imposed then it will be great news for all borrowers and it will ensure safety and equity for the whole industry.