As the Thanksgiving and Christmas Season looms just over the horizon, having available money for holiday shopping swings into the forefront of our thoughts. As enticing as it may be, you should avoid payday loans except as an absolute last resort. Payday loans are also called “cash advance loans” and they are small, short-term loans that carry very high interest rates. Some companies have even begun to advertise them as “loans to help you repair your credit”, but this is very misleading. Some companies suggest that these loans can help you pay off your bills and so establish good credit, but if you cannot afford to pay your payday loans back on time, you have to “roll-over” or extend the loan – often at huge expense and interest. Many people get into a “payday loan cycle”, whereby much of their monthly paycheck goes towards paying off their ever-growing payday loans.
That time of the season is rapidly approaching. So you have company coming over and need something quick, easy and delicious for dessert. Well here it is…Darrell’s Key Lime Pie.
First heat your oven to 350 degrees. In a mixing bowl mix at low speed (for 2-3 minutes) one can of sweetened condensed milk, 1/2 cup key lime juice and four egg yolks. Pour the mixture into a pre-made graham cracker pie crust and bake for 15 minutes. Cool for an hour. THAT’S IT !!! This recipe is so simple and easy. I like to top it with real whipped cream, and I highly suggest pairing it with a nice high quality margarita…….
There are several differences between a “short mortgage” sale and a mortgage foreclosure and the effects between the two are substantial for all involved including the borrower or mortgage holder, the bank and a potential real estate agent.
For the borrower, the benefits of a short sale include not having the “foreclosure” designate on a credit report, eliminating the opportunity for the lender to take legal action against the borrower for the difference between the negotiated “accepted” price and the actual cost of the property (with a no recapture allotment) and zero tax implications as long as the short sale is completed and closed before the year-end 2012. Even if the short sale text is reported to the credit bureaus (which, again, any wording or verbiage can be negotiated), a borrower will not have to wait the industry standard 24 months for another mortgage. The obvious benefit for the lender is they no longer have to absorb the operating cost nor the liability of the property until the property is either auctioned off or becomes an REO (Real Estate Owned) property. The lender knows the realized settlement net because of the accepted offer.
There’s a lot to learn about money, and there’s plenty of free information available. The Federal Reserve education web site, offers personal financial education information and links to many useful resources.
Look for organizations in your community that can help you learn more about setting financial goals, budgeting, saving, using credit wisely and getting the best deal. Whether you attend information sessions at different venues, read about money in books, magazines, newspapers, or online, learning how to manage your money is an important part of life.
Information you as a consumer should know about Credit Bureaus. The Credit Bureaus make money selling your information. The three major Credit Bureaus are in business for two main reasons only and those reasons are to make money, and be profitable for their shareholders. They make their money by selling consumer information to other businesses who lend money. With this information those businesses can assess the risk level of potential borrowers. Many of those businesses are:
Credit Card companies
Employers (with your permission only)
The Bureaus enjoy greater financial success if you have low scores. As a rule, credit card companies do not spend nearly as much money buying the personal information belonging to people that have good credit.
Accumulation of new debt is the remaining 10% of your credit score. It is comprised of how much new debt you are applying for. It takes into consideration how many accounts you currently have open, how long it has been since you opened a new account, and how many requests (Inquiries) you have for new credit within a 12 month time period. If you go out today and apply for credit, that creditor requests information from the Credit Bureaus. This counts as a Hard Inquiry on your report. If you have a lot of Inquiries in a short period of time, your scores will be impacted. If you request your own report, that is considered a Soft Inquiry and doesn’t count against your score, or show up on your report.
A healthy mix of credit accounts, represents 10% of your credit score. The Credit Bureaus take into account the “mix” of credit items you have on your report. This part of your credit score is affected by what kinds of accounts you have and how many of each.
The Bureaus will score you higher if you have an open mortgage, 3 credit cards, 1 auto loan, and a small amount of other open accounts. This mix tells the Bureaus that you can handle any type of loan. If you have a ton of credit cards, your scores will be lowered. If you have several mortgages, your scores will be lower. Any, “unhealthy” account mixes lower your scores. The preferred number of credit cards is 3. This means you will actually have a higher credit score if you have 3 open credit cards than if you have two or less. BUT, don’t run out and cancel your cards just yet. REMEMBER, 30% of your score is comprised of your balances in relation to your maximum credit limit. So keep your cards open, but focus on having 3 LARGE balance cards for ultimate impact. Maintain a healthy mix of accounts and your credit score will be golden.
Length of credit history, or your “time in the bureau”, accounts for 15% of your credit score. The older you are, and the longer you have had credit accounts for, the higher the score. This is broken down into 3 sub categories:
Time since accounts opened.
Time since accounts opened, by specific type of account.
Time since account activity.
Your credit history length is important when it comes to understanding your score as a longer credit history is looked upon more favorably than a shorter one. Someone with a credit history of 6 months isn’t going to look as impressive as someone with a history of 6 years. It takes time to establish a payment history. Those with longer credit histories typically have higher incomes as well.
The second largest factor in your credit scores is the amount you owe in relation to your high credit limits termed Credit Utilization Ratio, or CUR. This accounts for 30% of your score calculation. If you are carrying high credit card balances, you can actually hurt your credit scores almost as much as paying the account late every month. This aspect of your credit score has several different factors. The first factor is your relation of balances you owe on all of your accounts in relation to the high credit limits on those accounts. Once again, this takes into consideration balances on ALL of your accounts combined. Your credit score also takes into account balances in relation to high credit limits on your individual accounts also.
The three major Credit Bureaus: Equifax, Experian, and TransUnion, all work off of a similar scoring system. This system is based on a singular postulation: will you become 90 days late in the next 2 years? The scoring system they all use, (with minute variables) can be broken down into 5 categories; or 5 pieces of a pie. I will discuss the first part of that credit pie today.
Your payment history is the largest aspect of your credit score, as you might expect. In total, your pay history accounts for 35% of your total score. This portion of your total score calculation is based on your prior payment history with your creditors. Late payments, defaulted accounts, bankruptcies, and all other NEGATIVE information on your credit report have the greatest effect. The more recent the late payment, the greater the damage is to your credit score. If you go late on your mortgage this month, the Mortgage Industry Option scoring model could drop your scores over 120 points. That is with only one 30 day late payment!