Archive for the ‘credit’ Category

How are Home Investors getting loans these days?

Thursday, November 13th, 2008

At one point in time buying investment homes was a very lucrative business that brought forth great returns if you found the right deal. Couple of years ago investors could get low interest rate loans with no or very little money down. Home investors were buying up new builds, and existing home inventory all over the country. Once the bubble busted investors starting going bust everywhere. Another term for home investors is flippers. These investors would buy a home and flip that home within 6 months for a big profit.

This type of activity affected what is called the secondary market where bankers buy and sell loan paper. With the current changes one might wonder where all the flippers or home investors went? They are still out there, but the loans they are getting are not with banks. Most of them are now doing what is called hard money loans. These loans are short term and carry a high rate along with high fees. The individuals that lend this type of money could be considered a loan shark. There is nothing illegal about what they do; it’s a big risk to them as well.

The investors that have been around a while that bought large stakes in the real estate market could also be foreclosing on the properties they thought would sell. This is too common currently in our real estate market. Trying to find renters or lease option to buy is what a lot of investors are doing now. The drop in values nation wide has pretty much put a stop to most investors out there.

For years investors were buying up property in promising markets like Texas. In Texas your get buy twice the house for half the cost compared to other states in the U.S. Once the 100% stopped along with the amount of savings required to even get an investment loan, that market dried up.

Needles to say, this actually is the time to buy homes as long as your have the money and credit to do so. Mainly the rich are buying up real estate now.

With the new credit requirements and the amount of money down needed to get financing, investment loans look less attractive. If you are in the market to buy a investment home you might consider a hard money loan. There are reputable individual lenders that will lend you money on a short term note. Typically these loans are for a year or two and then you either have to sell or secure financing elsewhere.

How the current election will affect you financially.

Monday, November 3rd, 2008

Politics and what people do in Washington affects our stock market lately. With the current administration most are feeling skeptical about the future. When there is uncertainty in the air, people have the tendency to pull there money out of the market because of the volatility. Naturally banks start paying higher yields by putting your money in the bank with them. This is the nature of our economics. Time and Time again people have the tendency to repeat history.

With the FDIC insuring money in the bank for $250,000 per account holder until the end of December 2009, it only makes sense in some cases to put your money in bank. With the current election going on you can rest assure it will be rocky until after the election.

With any election there is always a skeptic in regards to which party is going to do to help out our country. With this current election and the historic events that are about to take place I can assure you that we will get through these turbulent times. There are lots of fail safe measures our government is implementing and probably will continue to do so.

If you are young this is a great time in our history to buy stocks at a low price. If you are retired and are on a fixed income you might consider a different strategy. In some instances annuities with a guaranteed rate of return might make sense. You should always check with a financial advisor before making any extreme decisions.

Also with the credit crunch identity thieves are on the hunt, so make sure you check your credit report often before its too late. If identity theft happens to you, your financial situation just became a nightmare. your resource for credit reports, credit cards and free credit advice.

Top 10 ways for students to build good credit scores.

Friday, August 22nd, 2008

One of the greatest things about our country is the ability to become financially independent, but learning how to do this can be challenging. Building good credit is a must; it will help you qualify for loans, rental, car insurance, cell phone plans, and credit cards. The first step is to be responsible with your spending habits.

In this article we wanted to give you some tips on building good credit so you can get off to a excellent start on this credit score building journey.

1. Get a secured credit card or student credit card. When you are new to the credit application process it will be hard to get a credit card. Typically banks will not extend credit to you without some good credit history. This can be very aggravating. So secured credit cards and student credit cards are great ways to start the building credit process.

2. Become an authorized user on your parent’s credit cards. Until recently FICO considered this a controversial practice and they have decided to continue allowing also know as piggy backing somebody else’s credit to help your credit. This is a great way for parents to monitor there kids spending habits while at college. Once they are doing well with this process then you might consider applying for a student credit cards or maybe a retail credit card with a low spending limit.

3. Use credit cards conservatively. When spending on your credit cards make sure you can pay what you charged on your credit card off that month. If you start to wrack up credit card debt you will drop your credit scores. So make sure you only charge on your credit card what you are able to pay off that month.

4. Select the right credit card for you. Once you have established some credit on your own, make sure you do some research on the credit card you are applying for. Not all credit card offers are the same. Some credit cards have yearly fees and some don’t. Some credit cards may have other perks that might be beneficial for your situation.

5. Use credit card for emergencies. Some financial experts recommend that you use your credit card only for emergencies when first starting out with credit. Using your new credit card is part of the credit score building process, but make sure at first you are real careful in regards to your charging habits. You might consider using your new credit card for situation where you need new tire or a cell phone goes south on you. Once you are custom to a credit card payment than at that point charge a little here and there on it.

6. Get a cell phone in your own name. When you are building credit you want to establish as much credit as possible in your own name. Sometimes creditors will not allow you to get a cell phone in your own name without a big deposit, but getting a cell phone in your own name builds good credit.

7. Don’t apply for several credit cards at one time. Once you have credit cards in your own name don’t go hog wild with applying for a bunch of credit. You really only need a couple of credit cards, that is it. Student really only need one credit card to start out with.

8. Pay all your bills on-time. This is one of those common mistakes youngsters make when first starting out. If you are late on anything it will affect your credit. Make sure you don’t pay anything late. Even your internet bill could affect your credit if not paid.

9. Use your student loans for education expenses only. Student loans are a great way to establish good credit. They are also a way to ruin your credit. So when you get a student loan make sure you pay it on-time and use that money for educational purposes only. Once you are done with your education, consolidate those loans into one small payment.

10. Paying down credit card balances. If for some reason your credit card balances get high during your time in school, make every effort to pay down your balances. You should never have credit card debt higher than 30% of your allowed credit limit.

If you are not sure where you stand with your credit it would not hurt to pull a recent copy of your free credit report today. A educated student saves in the long run.

Credit and Divorce

Sunday, July 27th, 2008

Billy Bob and Sue got a divorce. The decree stated that Billy was responsible for certain joint credit card obligations. So Sue went on with her life not worrying about the credit card debt that was awarded to Billy Bob. Six months later Sue gets a call from the creditors wanting their money for the credit cards she forgot about. Sue told the credit card companies that those debts were awarded to her husband in a divorce decree. The creditor stated that they were not involved in the decree and she was still legally obligated to pay the joint accounts. Sue later found out that late payments appeared on her once spotless credit report.

If you are going through a divorce or contemplating on going through one-you might want to take the time to understand credit and the issues that can arrive as a result of a divorce. Most attorneys don’t explain what could happen if the other party does not pay a bill on a account attached to your social security number.

There are two types of credit accounts.
• Joint Accounts
• Individual

If you are getting ready to apply for credit whether it’s a credit card or a mortgage loan you will be asked to state whether the account is joint or individual.

Joint Credit Accounts Your income, financial assets, and credit history – and your spouse’s – are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).

Advantages/Disadvantages: An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don’t pay them can hurt their ex-partner’s credit histories on jointly-held accounts.

Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any “authorized” user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.
Advantages/Disadvantages: If you’re not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse’s income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.

With divorce being a common problem these days make sure you get joint accounts that your spouse is responsible for out of your name. If you don’t it could affect you down the road if they decide not to pay the bill.

Author:Mike Clover

Don’t forget to save for retirement

Monday, July 14th, 2008

In America we have the freedom to choose. The possibilities are un-limited. The one thing I think people forget to do is save for retirement. In all honesty most people are never taught to save. I believe being taught to save ties to proper money management.
Money management leads to less credit problems. Starting young on your nest egg will allow you to retire earlier. So in this article I am going to give some tips on saving for the golden years. If you don’t save and expect to live on social security, you might find yourself doing without.

Step one: Open a savings account
Determine what you can afford to save with each paycheck. My advice would be to start saving a minimum of 5% of each paycheck. Once you have determined how much you can save open a saving account that pays a little interest and has no fees.

Step two: Invest money in the Stock Market
Once you have about six months salary in your savings, at that time you are ready to start investing in the stock market. The stock market has proven over time to be the best way to double your money using the “Rule of 72” So if you divide the 72 by the rate of return you are getting on your investment, it will tell you how long it will take to double your money. For example:
Interest rate: 9%
Amount invested: $52,000
72/9 = 8 years
In eight years you would have approximately $104,000
You can see how investing and getting a return in crucial for retirement.

Step three: Select a good investment Broker
There are lots of investment brokers. Find out what there fees are. I would shop a around and find an investment broker that has less fees along with some good references. A good company this is conservative might be Edward Jones.

Step four: Manage your money
Since having good credit is a way of life these days, make sure you stay on top of your credit. Its does no good to save if someone is stealing your credit from you. Make sure you pull a copy of your free credit score report regularly to stay on top of your credit scores. With good credit scores you will save on your loans terms. You will also know if someone has stolen your personal information. Property credit worthiness management is part of this entire process.

Your credit scores are not all that lenders look at.

Sunday, July 13th, 2008

When a lender determines your credit risk, yes they pull your credit report along with your credit scores. This is the first step in the qualifying process. There is also other attributes lenders look at as well. In this article I wanted to discuss some other factors that are important in the decision making process with lenders.

Job history
Having good work history is considered stability. If you are someone that jumps from job to job, this could affect the decision process on getting a loan. In some instances good job history could be considered a compensating factor when other areas of your overall credit picture may not look too good. Underwriters also like to see at least 2 years work history to buy a house. If you have gone to college and graduated, and now have full time employment, the time you were in college can be counted as work history with some loan programs.

Rental or Mortgage history
Typically lenders like to see at least 12 month good rental history. This shows you may have the ability to handle a mortgage payment or any other obligation. Some creditors like to see that you also own vs. renting. All of this just shows your ability to handle debt.

Have a checking account or savings.
Creditors also like to see that you have a checking account. This way they can see what you are doing with your money. Lenders like to see that you have the ability to save money. Here are acceptable forms of savings.
· 401k
· Stocks
· Mutual Funds
· Annuity
· Money Markets
· Regular savings account
Savings in the eyes of lenders is a plus. This not only shows that you have the ability to save, but if something comes up you can continue to pay your obligations.

Full time employment
Lenders like to see that you are working full time. They want to see some consistency in the hours you are working. If you are part-time and don’t a history with this employer, they might deny the loan due to lack of work history.

How many dependents
Some government loans take in account how many dependents you have. This could cause you not to get approved depending on your number of dependents and income. This loan is called V.A loans.

How much debt you have
Your income to debt ratio is a big factor in the qualifying process. If you apply for a loan and are overwhelmed with debt, you may not qualify. You should keep your debt as low as possible.

How immigrants can build credit

Sunday, July 13th, 2008

If you are new to the United States because you just arrived from another country, welcome. In this article I wanted to discuss how you can establish credit as a new citizen of the United States. People from all over the world come to the US to pursue the American dream. Some come here to study and then go back to their country. What every your situation is, as long as you have a social security number I can help you establish credit scores. When arriving to America the first thing you need to do is get your credit established. Here are tips to get this going.

Rental & Utilities
I would hope by now you have a job, so you can show someone that you are paying some sort of rent. Rental is part of the credit building process. Credit Card companies and banks want to see that you are paying rent to someone. This also allows you to get your utilities in your name. Paying your light bill, electric bill, and phone bills are part of the credit building process. Make sure you pay all these bills on-time.

Work History
Make sure you have work history. Obviously if you are applying for some type of credit the creditor wants to see that you are working to pay back any debt owed.

Open a checking account
Having a checking account is a standard question on loan applications. This shows the creditor you might be responsible with you money.

Open a savings account
Having a savings account shows that you have the ability to save incase a emergency should arrive. Most creditors like to see this in place.

Apply for a secured credit card
There is no quicker way to establish credit scores than with a secured credit card. These types of cards require a deposit by you in designated account by the card issuer. Typically the balanced required by you is anywhere between $250 and $350. Once you have secured a credit card, this begins the credit building process on your credit report. Typically I recommend 2 cards to get the credit score building process underway.

Student Credit Cards
If you are here studying you should apply for a student credit card also. This card is much easier to get if you are in college. This card does not require a deposit, but is considered a sub-prime card with higher interest rates. This card is a great way to get your credit established as well.

After six months of paying on a couple credit cards with no late payments you will be scored on your credit report. You might also consider getting a small car loan as well. The credit scoring process likes to see a mix of credit reporting on your credit report. This process mentioned will get your credit underway fairly quickly. Remember to be responsible with your new credit and never be late on anything.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness

Establishing Credit Q & A

Wednesday, July 9th, 2008

Hello Mike,
I have a son that is 18, and I would like to help him get some credit established. I have read that authorized user accounts don’t help your credit score anymore. Is this true, if so what do you suggest I do to help my son get some credit established? He will be attending college this fall as well, so I know he might be in need of some credit cards for emergencies.

Lina Carter

Hi Linda,
This is a good question. Because of the changes due to fraud in the credit repair industry, the authorized user account credit score process affects those that are really trying to help out a family member. I personally don’t agree with the change, but because someone else was breaking the law, it messed it for those that were not. The quickest way for your son to establish good credit score report is to apply for some secured credit cards. If he is going to be a student he can apply for student credit cards as well. I would recommend getting a couple of these cards, in the works as soon as possible. The secured credit cards depending on his credit will require between $200 and $300 in a bank with the credit card company. Once you son has showed around 6 months activity with the credit bureaus, he should get some credit scores at that time.

Mike Clover

Make your credit report look low risk to creditors

Wednesday, July 9th, 2008

In this current market and probably for future lending markets lenders will be looking at your credit report very closely . I figured I would provide some quick tips to make no only your credit report and credit scores look better, but you’re over all risk to a lender. In this current market even if you have good credit you could get denied for a loan.

Keeping your debt low
In the past you could have really high income to debt ratio’s and still get approved for loans. All of us in the lending market thought this was crazy, but it was getting done. In a nutshell this amounted to families getting homes that they could not really afford. In this market you better have low credit card debt or debt period. Because the underwritten engines and requirements for general debt is quite a bit lower than it was in years past. So the bottom line is to keep your debt ratios 41% or less. Here is how you calculate this.
Take your gross income and divide it by your total monthly obligations. The total monthly obligations would be only debt that reports to the credit bureaus. For example:
• Credit cards
• Auto loans
• Mortgage loans
• Installment loans
• Student loans

Lenders don’t look at your utility payments or any other obligations that does not report to the 3 credit bureaus typically. So make sure you only count your obligations of credit only.

Save your money
When getting a loan in this current market, lenders like to see that you have the ability to save. When you have savings it makes your risk lower to the bank. A good goal would be to save a minimum of 6 months mortgage payment in the bank. Lenders also like to see stocks and 401k. This is also considered saving as well. The great thing about having savings is if an emergency comes up you have the money to pay your bills so it does not affect your credit report.

Have a mix of credit on credit report
When a creditor looks at your credit report they like to see some type of activity along with a mix of credit. Examples of a mix of credit would be a couple credit cards, installment loans, auto loans, etc…….. The Fair Isaac Score model takes into account the mix of credit yiou have to determine your credit score. So if you are a cash only buyer, charge a little on your credit and pay it off at the end of the month. Creditors have to see what you are doing, and that is why they pull your credit report. So don’t be afraid of credit, at the same time be responsible with it.

Life after a Foreclosure

Saturday, July 5th, 2008

Your life during a foreclosure might seem never ending. A foreclosure does affect your credit score report, but the good news is there is life afterwards. If you have fell victim to the Sub-Prim meltdown which caused you to loose your home, I will explain to you how you can recover from this fairly quick. Obviously anytime you have a negative mark on your credit report it will stay on there for 7 years. The positive side is you can implement some good credit management steps to recover.

It will be a minimum of 3 years after foreclosure date before you can buy a house again. FHA and Conventional loans have a 3 year seasoning requirement before they will allow you to get financed. By implementing what I am about to teach you, you can still get your credit in the right direction.

Step 1: Late Payments
Make sure you don’t have anymore late payments on any of your other obligations. Late payments will destroy your credit.

Step 2: Credit
Make sure you have at least 3 lines of credit reporting on your credit report. This could be a couple of credit cards, secured credit cards, car loans, and installment loans.

Step 3: Rental
Make sure you have excellent rental history. Don’t be late on your payments to your landlord. When you get ready go buy a new home in 3 years, this is a must, and make sure the rental payment is fairly close to what you new mortgage payment would be. The reason is if you are ready to buy a home and your rental was $400 to $500 less than your new mortgage payment, the bank will consider that payment shock. So watch this closely.

Step 4: Savings
Save your money, you should have at least 6 months worth of mortgage payments in your savings. The banks like to see that you have the ability to save.

Step 5: Learn from your mistakes
After you have experienced a foreclosure, make sure you don’t have the something happen again. Fair Isaac the creator of the FICO score will forgive credit mistakes, but the new FICO 08 does not forgive repeat offenders too well. So don’t make the same mistakes twice.

Stuff comes up during our little journey here on earth, but we can make matters a lot better with good credit management. If you are not rich, there will come a time where you need to borrow money. It can be a little frustrating when you need a loan and you cannot get one because of bad credit. Once you implement what I have mentioned you will be well on your way to good credit health.

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.