You know about Bridal Registries at department stores, but have you ever heard of a Bridal Registry Account at a bank?

Under this little-known FHA program, a couple planning to marry can set up a Bridal Registry Savings Account at their own bank and use it to gather funds for the down payment on their FHA mortgage loan.

Instead of buying traditional wedding gifts, well-wishers can make deposits to the Bridal Registry Account. And they can do so without going through the red tape of writing gift letters, proving where they got the funds, etc. In addition, newlyweds who receive cash gifts can make the deposits themselves – without having to verify where those funds originated.

And it gets even better. The gift account is not limited just to couples who intend to marry, but according to an official HUD document, is “available for other situations where gifts are typically received by an individual or individuals.”

Graduation comes to mind. How about milestone anniversaries?

Bridal Registry funds do not have to be used for a down payment, and when they are, there is no requirement that the couple be married prior to the house purchase – or ever.

What are the requirements?

•    Open a savings account and name it “Bridal Registry Account” (or graduation, etc.)
•    Give friends and family banking information so they can make deposits.
•    No one with an interest in the purchase is allowed to participate – your real estate agent, for instance, may not deposit.
•    You provide your lender with bank statements showing the gift deposits.

In addition to FHA, some banks allow Bridal Registry Accounts for their conventional loans. In fact, banks were actually offering this plan before FHA added it.

So if you’re going conventional, check with your bank. You may also be able to use this program.

Here’s what is most surprising about the Bridal Registry program: It’s been in effect since 1996. Yet no one talks about it, or informs couples that it’s available. Neither FHA nor the banks advertise it – and few loan officers have ever heard of it.

CreditScoreQuick.com

On July 21 a new rule will go into effect that requires lenders to tell you your credit score if they deny you credit. Prior to this rule, only mortgage applicants have been entitled to know the credit scores which led to a credit decision.

Now the rule will extend to credit cards, auto loans, student loans, etc. – but only if you are turned down for credit or approved at less than the best rates. In this case,  the credit issuer must provide you with a free copy of the credit score used as a basis for the decision.

You’re also entitled to a free score if your credit issuer decides to raise your interest rate or reduce your credit line based on your credit scores.

In addition, if you’re turned down for tenancy or required to pay several months rent in advance, your landlord must provide you with the score they used – but only if they used scores that a lender could use to underwrite a loan or some form of credit.

Some scores don’t fall under the rule.

What other kinds of scores are there? Dozens, actually. Among them are “utility” scores used to determine whether you’ll pay a security deposit to your utility company. Another is the “insurance score” used to determine the rates you pay for coverage – or if you’ll even get coverage.

These companies are not required to reveal the scores they used in their decision making unless they use the FICO or VantageScore.

What are you entitled to know?

If you’re denied credit or issued credit at inferior terms, you’ll receive a free score through a notice from the lender.

This notice must include basic information such as the date the score was created, who provided the score, the major factors that are damaging your score, where you rank nationally, and the range of possible credit scores.

Providing the range is important in understanding your financial position, because a 750 score with FICO is good, while a 750 with VantageScore is not. FICO scores range from 300 to 850, while Vantage Scores range from 501 to 990.

Finally, the credit issuer must provide you with information on how to get a complete copy of your credit report.

This new rule could be important to you.

In the past, some unsavory car dealerships have used the excuse of poor credit scores to over-charge consumers on interest rates. Because they didn’t have to reveal the credit scores used, they were able to mislead thousands of consumers who paid the price because they needed the car.

CreditScoreQuick.com

You probably know that lenders and credit card issuers want to look at your credit report. You might even know that car insurance companies are interested in your credit score, and negative items in your credit file can mean a higher insurance premium. However, you might be surprised at some of the others interested in looking at your credit report.

Potential Employers

More potential employers are interested in looking at your credit report. While they aren’t supposed to check your credit score, they can get a copy of your credit report with your permission. An employer may want to check your credit report if you are applying for a position of trust with money; credit problems might indicate that you are willing to embezzle to solve money woes. Similarly, some companies that deal with sensitive and proprietary information might want to peek at your credit report to make sure there is nothing in there that indicates that you might be susceptible to bribes.

Even if you don’t think that the position you are applying for is sensitive, some employers believe that your credit habits can provide insight into how you might perform on the job. It may not be fair, but your credit report is an increasingly popular indication of your general character.

Cell Phone and TV Service Providers

In some cases, your cell phone provider or TV service provider might be interested in checking your credit history. A service provider might look at your credit score, or check through your credit report. In some cases, if you have a very poor credit history, you might not be approved for a monthly plan for services. You may have to pay ahead of time, rather than paying after a month of services.

Landlords

Another group interested in your credit habits is landlords. Some landlords are becoming quite picky about tenant, requiring a credit check before approving move-ins. Some landlords don’t want to worry about whether or not they will have to be after you constantly to pay rent as you should – or worry about you skipping out. You might not be allowed to rent in an area that you prefer, or you may have to pay a larger security deposit to help protect the landlord from what you might do.

Bottom Line

Your credit report is increasingly becoming a way for others to assess what sort of financial risk you might present to service providers. Your credit habits can be an indicator of how you might deal with credit, or how responsible you might be with money, in the future. This means that your employer, landlord or cell phone service provider has an interest in knowing how likely you are to miss payments or be late with your obligations. It may not be fair, especially if you are trying to rebuild your credit, but that is the way matters are headed. As a result, it is vital that you improve your credit report by making on time payments and reducing your debt.

Pinyo is the owner of Moolanomy Personal Finance and has written for online publications, including American Express Currency and U.S. News Money. You can follow him on Facebook and Twitter.

I freely admit to not knowing the gory details of how federal government appropriations and spending go, but the claim that not increasing the debt ceiling will mean “default” seems to me to be pure demagoguery. The argument being made most often is that without being able to borrow more we won’t be able to have the resources we need to pay interest and principal on existing debt.  But is that really true?

Not being able to borrow any more does not mean that the income (or wealth) isn’t there to pay interest on existing debt.  Think about a typical household for a moment.   Suppose you have several credit cards, all but one of which are at their maximums.  Now you max out the last one and none of the card providers is willing to increase your credit limit.  What does this mean for you?  One thing and one thing only:  you can’t borrow any additional money.  It does not, by itself, mean that you will default on that or the other credit cards.

What it does mean is that if you can’t borrow more and you have debt and interest payments you must make, then you must either a) find additional income; b) liquidate some assets; and/or c) reduce expenditures elsewhere to ensure you can make those payments.  Those are the options facing you.  The only way to argue that you will be in “default” and unable to pay your debts is you refuse to make a choice among those options.

The situation facing the federal government is analogous.  If the debt limit isn’t raised, Congress must pick one of those three options.  I want to focus on spending reductions because those are the one they can most easily control.  It’s true that there’s a federal budget they must live within, but why can’t funds that are allocated for specific expenditures be re-allocated toward principal and interest payments on the debt?  If our imagined household suddenly can’t borrow more, it could just take some money that it was planning to use to buy that LCD TV and use it to pay the credit card minimums.

There’s no non-political reason that the government can’t do the same by taking funds from budget allocations and re-route them to pay interest and principal. As far as I know there’s no legal reason Congress couldn’t say “we don’t need those new bombers we were going to buy, so let’s shift those funds to interest payments?”

Doing so may not be politically easy, but to say that not raising the debt limit will lead to default is just another way of saying that politicians refuse to make the difficult choices that households make all the time.  And turning that into claims of financial apocalypse is indeed pure demagoguery.

Author:

Steven Horwitz

Charles A. Dana Professor of Economics

St. Lawrence University

It may sound cliché, but a good credit score can really save you a ton of money.

Don’t believe me? Just look at the numbers.

A recent study from CarInsurance.com revealed that drivers with credit scores above 750 save an average of $783 annually on car insurance.

But only about 40 percent of consumers have credit scores that high. The rest are essentially overpaying for their car insurance.

Then there are mortgage rates. Credit scoring is a huge factor in determining what interest rate you’ll wind up with.

In fact, you might not even be able to qualify it your credit isn’t up to snuff, despite having plenty of money in the bank and a steady paycheck.

Again, a good credit score can mean the difference of hundreds of dollars a month, or thousands over the life of your 30-year mortgage.

Don’t own a car or a house? Okay, well let’s look at credit cards.

If you carry a credit card balance, you’re going to end up paying costly finance charges (interest) if you don’t have a solid credit score.

After all, why would the credit card issuers approve you for their best deals, such as 0% APR credit cards and money-saving balance transfer offers if your credit score isn’t where it should be?

Short answer: they won’t. And you’ll end up paying more and more all because you didn’t take the time to better understand your credit score and how it ticks.

When it comes down it, credit scores are only going to get more important. So now is the time to start practicing healthy credit habits if you’ve been neglectful.

Pay bills on time, keep balances low, and use credit sparingly.

And if you’re planning on applying for a major loan in the near future, check your credit scores now to see where you stand to avoid any nasty surprises!

Colin Robertson is the author of several consumer finance websites aimed at helping people save money, including The Truth About Mortgage.

A new study indicates that banks and distressed homeowners will lose $375 million this year to white collar criminals.

These criminals, disguised as real estate agents and property investors, earn their ill-gotten gains by making “short sales even shorter.” Here’s how it works:

An agent lists a home that is “underwater.” That is, the mortgage balance on the home is higher than the home’s value in today’s real estate market.

They offer the home for sale and find a solid buyer at today’s fair market value. Then the investor steps in, making a much lower offer on the house, which is then presented to the bank for approval. In order to convince the bank to approve the sale, the agent prepares a broker price opinion (BPO) to substantiate the low price.

Because the investor buyer is able to close with cash, the short sale makes its way through the system quickly. Then the agent contacts the legitimate buyer and sells the home – with neither the distressed homeowner nor the bank realizing that they existed.

According to an article in the Wall Street Journal, this kind of white color crime is rising at the rate of 25% per year, and while a few cases are going to trial, the crime is going largely undetected. Investigators are looking more closely at homes that re-sell within 6 months at a price increase of 40% or more, but many of these criminals are posting gains of “only” 20-30%.

This kind of fraud does require cooperation from all parties, and in some cases, bank asset managers are suspected of complicity.

Are some homeowners also going along with the fraud? It’s possible, especially in states where banks are not allowed to come back on the homeowners for the deficiency. (A deficiency is the difference between the mortgage loan balance owed and the dollars the bank realizes after all costs of the sale are deducted.)

Banks are the target in this fraud. However, in states where deficiency judgments are allowed, distressed homeowners are the true victims. After the short sale closes, the bank can sue for a deficiency judgment, and the homeowner can be saddled with a crippling debt that can prevent them from ever owning another home.

These criminals are taking a huge risk in the name of fast profits. Federal bank fraud carries a penalty of up to 30 years in prison on top of fines and restitution.

CreditScoreQuick.com

Ever since Congress passed the CARD Act of 2009, consumers have been scrambling to bring their credit scores back to former levels.

At that time, credit card issuers made drastic changes in anticipation of how the act’s provisions were going to affect their profits. One of those changes was to slash spending limits and close unused accounts.

Since “utilization” contributes to 30% of your credit score, thousands of consumers found themselves unable to get the best rates on loans – some weren’t even able to get loans.

Utilization is the ratio between how much credit you have and how much you use. When the credit card companies slashed credit lines to at or below consumers’ current balances, they suddenly showed 100% utilization. Some even showed that they were “over limit.”

Since credit scores impact everything from getting a loan to renting a house to being hired for a job, most consumers are working to improve their scores. They’re paying down credit cards and getting new cards with no plans to actually run up balances.

And that’s where some consumers are making a credit-damaging mistake.

It turns out that carrying cards with zero balances can actually lower your scores.

While staying under 30% utilization is good and staying under 10% is even better, the credit scoring models do want to see some activity and proof of your bill paying habits, so 0% utilization is NOT good.

However, you don’t need to carry a balance. The best way to protect your credit scores is to use up to 10% of the available credit on your cards, then pay the balance each month to avoid interest charges.

The credit card issuers report your balance as of the day they issue your monthly statement, so even when you pay the balance in full, your credit report will show activity.

Of course there are exceptions.

If you’ve been carrying a balance at or near your credit limit, paying off the card and showing a zero balance will help your scores. In addition, having a mix of utilized cards and zero balance cards won’t hurt you.

But don’t make the mistake of thinking that becoming debt free will mean higher credit scores. It just doesn’t work that way.

CreditScoreQuick.com

Carrying a company credit card to use for business expenses sounds like a good idea. Instead of keeping a log of your expenses and turning it in for repayment, you simply say “charge it,” turn in your receipts, and the company pays the bill.

If they pay late or run up a huge debt, it’s not your concern. Maybe.

It all depends upon how the card was set up. According to a 2009 survey from RPMG Research Corporation, a third of the companies that use corporate cards make employees liable for payment – either individually or jointly with the company.

You’ve no doubt heard of individuals whose credit was ruined because their medical insurance failed to pay bills on time. It wasn’t their obligation, but it was their credit that took the hit. The same situation applies to company credit cards.

It doesn’t matter who is supposed to pay. If the card is in your name and the credit card issuer believes you’re the responsible party (or one of them) the late payment or default will show up on your credit report.

So pay attention. If the boss offers you a company credit card, but then asks you to fill out a form listing your Social Security number and other personal information, you’re probably accepting either individual or joint responsibility for that debt.

If you’ve been carrying a company credit card for years and don’t  remember whether you filled out an application form, it’s a good idea to check. Get a copy of your free online credit report and look for that account.

If you find it, that means you’re liable for payment, and you should take steps to assure yourself that the bill is being paid on time. Your credit report will tell you if the account is or has been past due. Your own due diligence will tell you if it becomes past due in the future.

How can you keep track? By logging into the card’s website. You’ll be able to see the current due date, along with a record of payments. Then log in again on the due date, just to make sure the payment has been made. If it hasn’t, you probably should pay it yourself and seek reimbursement – because your credit scores are on the line. Of course, call your accounts payable department first. The check really might be “in the mail.”

If you find previous delinquencies, you may be able to get them removed by providing a letter from your employer verifying that under the terms of your employment, you are not the responsible party.

CreditScoreQuick.com

What many consumers don’t understand is that while bankruptcy wipes out debt, it doesn’t wipe out the record of that debt.

The bankruptcy itself remains on your credit report, affecting your credit scores, for 10 years. In addition, the negative accounts that were wiped out in the bankruptcy will remain on your credit report. They too will negatively affect your credit scores.

These now inactive accounts should automatically fall off the report seven years after your last payment or last use. If it doesn’t happen automatically, you can file a request to have them removed.

Thus, after 7 years, the only black mark showing will be the bankruptcy, and it will carry less weight from year to year as long as you’ve been working to re-establish credit.

One record that won’t go away – perhaps ever – is your account with a specific vendor. Consider the old adage: “Once burned, twice shy.” This is how vendors feel about customers who have left them with unpaid debt, and this is why they’ll keep a record of your account in their files.

Thus, it’s unlikely that you’ll be allowed to open a new account with a company if you erased your debt to them through bankruptcy. If they do consider extending you credit in the future, it will probably not happen until you’ve begun to re-establish your credit with other vendors. In the case of phone or electric service, cable TV, and satellite service, you may also be required to pay a sizeable deposit.

Is this fair? Of course it is. If you lent money to a friend and they wiped out the debt through bankruptcy, would you be willing to lend them more money?

Is it legal? Yes. Is it discriminatory? No.

The one thing we are allowed to discriminate about is the ability to pay. If any company doubts your ability – or willingness – to pay, they have a perfect right to deny you credit.

What can you do?

Begin rebuilding your credit with other companies. Take out a secured credit card and make all of the payments on time. And most important of all – pay all your bills on time going forward.

CreditScoreQuick.com

So – you got caught in the housing “boom and bust” and cut your losses with a short sale. Now you’re looking at rock bottom prices combined with historically low interest rates, and thinking that it’s a good time to once again become a homeowner.

And you’re right – it is. Locking in to a low payment now means you’ll be sitting pretty in a few years when both prices and interest rates have gone up.

But what about that short sale in your past? Will it prevent you from buying now?

That depends upon your credit scores, and the length of time since your short sale.

According to the latest Fannie Mae Guidelines, there’s a mandatory waiting period of two years after a short sale if you’re going into a new purchase with a 20% down payment. The waiting period is 4 years if you put only 10% down – unless you can document extenuating circumstances. If so, the 2-year waiting period applies.

FHA requires a waiting period of 3 years after a short sale or foreclosure, but then you can buy with a down payment of only 3.5%.

Of course, you do have to have acceptable credit scores. And while FHA guidelines say you are eligible for a new mortgage loan with FICO scores of only 580, most lenders impose their own overlays that mandate a FICO score of 640 or better.

That means the first step is to get a copy of your credit report – with scores – and see how you stand.

If your credit report shows collection accounts, you may be required to pay them off – and doing so will help your scores. Note that you may be able to negotiate a payoff for less than the full balance. But do talk with a trusted loan officer for advice before going forward with any kind of payoff.

Next, read the recommendations on your credit report for tips on how to raise your scores, and listen to the advice that your loan officer gives.

In general, you should try to pay down or transfer balances on your current credit cards show that no account shows more than 30% usage. You should also “lightly” use each of your cards every couple of months, to show activity and a record of payment.

Avoid opening new accounts or letting any vendor check your credit in the months preceding your home search. At the same time, avoid closing any old accounts.

Read your credit report carefully and correct any errors that could be hurting you. Right now, reporting errors are depressing scores for many consumers who are working to overcome  financial difficulties.

If you’re a “new couple” and only one of you was involved in the past short sale, consider taking out the new mortgage in the “other partner’s” name only. With today’s low prices and interest rates, you might not need two incomes to qualify.

Not simple, but worth it…

If you plan to remain in your community for at least the next few years, purchasing a home right now and locking into low payments is a smart move. That short sale in your past will make the process a little more difficult, but as long as your credit and your financial situation are on the mend, you can do it.

CreditScoreQuick.com