Credit Facts In The News Part 6

A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

The Wall Street Journal reported on June 11th that a bill to expand the homebuyer benefit has been introduced in the Senate.

The bill would increase the tax credit to $15,000 from the current $8000 credit for first time buyers.

The proposal would lift the income maximums and apply to all homebuyers, not only first time buyers.

The current tax credit applies to first time buyers only.  First time buyers are  defined as anyone who has not owned real estate for 3 years.  Current income limits are $75,000 for a single person and $150,000 for a couple.

The current tax credit for first time buyers is set to expire on December 1.

While the proposed legislation has the potential to improve the real estate market, the elimination of income restrictions is controversial.

The bipartisan bill is estimated to cost another $35.5 billion over the $2 to $3 billion the current measure is expected to cost.

Keep an eye on this bill to see how it will effect your ability to buy a home this year.

At HOPE we help educate our clients everyday so they can make wise decisions about their financial future. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.

Credit Facts In The News Part 5

A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

According to The News-Sentinel, You Need to beware of credit card ‘skim' scam. My oldest daughter was a victim of this very scam.

When you use your credit card to pay for your bill at a retail shop or restaurant, like most consumers, you probably assume it is in safe hands. In fact, your card could be in the hands of a “skim artist.” Credit card skimming is a practice that has been around for more than a decade but, has increased in frequency the past two or three years.

Here is how it works: Skim artists recruit gofers, who then find temporary work within restaurants, hotels and retail establishments. The recruits are given small, illicit, electronic devices, known as skimmers, which capture all of the credit or debit card's details (name, address, telephone number, card number, credit limit and PIN) in the few seconds that it takes to swipe the card through the machine.

When the unsuspecting customers go to pay their bill, their card is first swiped through the legitimate credit card machine, but then, secretly, it is also swiped through the smaller skimmer machine. The gofer then passes the gadget on to the skim artist, who pays them cash for their part in the crime. Once the skim artist has the details, he downloads the information onto a computer and makes up a fake card. The “cloned” card is embossed with the details of the victim's credit card and passed on to others, who may sell the card or use it for their own benefit. My husband and I know. It's happened to us, when a “T. Chavez” in California signed two big purchases with his name and our credit card number on an embossed card! The call from our financial institution began with, “Have you been in California recently?” Well, no. From there we knew there was a problem.

Skim artists usually target gold or platinum cards. Because of their higher credit limit, it visually takes the bank longer to realize there is a problem. While the whole process of getting a cloned card onto the streets can take less than a day, the customer is none the wiser, since his own credit card is in his wallet. In fact, victims may not realize they have been taken until they check at the end of the month, or receive a call from their bank or credit union telling them “your account has been compromised.”

How can you protect yourself?

Keep your receipts (all of them), check your statements regularly and review them thoroughly. If you see a transaction that you did not make or authorize, report it to the card issuer immediately. This goes for an “increase” in the tip that you left! A saved receipt/thoroughly reviewed statement will catch these disparities.

Request a credit check on yourself as often as twice a year.

At HOPE we educate our clients everyday on making wise credit decisions. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.

Credit Facts In The News Part 4

A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

If you can possibly wait you should buy a car after you are pre qualified for your home purchase. When you are ready to buy that cat the news below can help you.

According to Huliq News, Buying a car with Bad Credit can work for you but you need to take a careful approach. Are you  thinking of buying a car but your bad credit holds you back from securing it especially when you think of financing it The reasons for having poor credit can be numerous like past bankruptcy or simply default payment on either credit cards or loans. Of course obtaining a new car or used car loan with bad credit is not as easy as securing it with good credit score.

Fortunately, now there are ways to increase the chances of not only obtaining car loan, but with affordable rates. Thus for people with poor credit, following the below mentioned strategies can help them assuring car loan approval at lower interest rates while giving them a second chance to improve credit rating for securing finance in future.

Maximize Down Payment

Increasing the size of your down payment can help you gain approval on your car loan for any credit situation as it provide greater equity or security to the lender. Thus the lender is quite assured as half of the payment is made and offer you quick approval. Down payments also help you to reduce the interest rate  as the lender is secured with the amount which ultimately reduces your monthly payments and chances of being upside down on car as the principle amount is reduced.

Getting Pre Approved

Pre approved automobile financing for bad credit gives you negotiating power against the dealer to get lower price on car purchase. As you are pre qualified, it helps you to know exactly how much money you can afford to spend while buying a car, which enables you to be within the budget and allows to focus on getting the best car without worrying about financing.

Finding a Sub Prime Lender

Most banks and finance institutes only lend to people with prime or good Credit. If you have poor credit, bad credit, or very bad credit score, financing your automobile through sub prime lender can be the best source. The probability of approval for finance through sub prime auto lender is high as they specializes in offering finance to people with poor credit. They can offer you much more flexibility in terms and rates compare to the market and reduce inquiries on your credit report. Hence, before buying a car with bad credit you should first check your credit score and if it is poor then find a sub-prime lender.

Offering Collateral

Bad credit borrowers can opt for a car loan in two forms, one is secured and another is unsecured. Through the secured form of bad credit car loan, the borrower can pledge his any asset like home, boat and even his current car with the lender. This offers security to the lender about the repayment of the loan amount and thus you can have the benefit of borrowing as much as you want to the value of the collateral, lower rate of interest and instant approval.

Financing without Credit Check

Many lenders now offer a great platform through no credit check car loans for the car buyers with poor financial background to get their dream car. As no credit check vehicle loan is provided on the basis of an individual's income and employment history. So a person with significant income and employment history can obtain finance regardless of the credit issues.

Comparing Quotes Online

Now the borrowers can find affordable deals online as per their requirements by surfing for bad credit car loan online. Whereby, they can compare the loan quotes sent in by the lenders and without roaming around the market. All you need to do it to fill in a online car loan application form and wait for the approval, usually you can expect a response within one or two business days. A significant advantage of applying online is that you can fill from the comfort of your home while saving your time, money and without any hassle.

Bad credit borrowers now can take a relax breath with bad credit auto loan and following above simple footsteps which can lead them to securing a car without any botheration of being rejected or accepting overwhelming rates.

At HOPE we educate our clients everyday on making wise credit decisions. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.

Credit Facts In The News Part 3

A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

According to the Community News, There are 5 things you need to know about your credit report

1. There could be errors in your credit report

The Federal Trade Commission reports that 90 percent of credit reports contain some kind of mistake. Errors can range from a misspelled name to a false bankruptcy and are typically the result of data entry mistakes on the part of credit bureaus. Information gathered by the three credit bureaus – TransUnion, Experian and Equifax – is not screened or verified by any government agency.

2. Every credit score is calculated from five main components

35 percent is payment history: have your payments been on time?

30 percent is debt ratio: are you using too much of your available rolling credit, like credit cards?

15 percent is length of credit history: how long have you had credit?

10 percent types of credit: what is your ratio of secured versus rolling credit?

10 percent is number of credit inquiries: how many times has your credit report been checked recently?

3. Anything below 720 is not a great credit score

Credit scores range from 350 to 850. The best ways to improve your credit score are: monitor your score, understand what affects it, pay bills on time, do not use more than 30 percent of your available revolving credit and make sure incorrect information is fixed.

4. Negatives can have a long-lasting effect

A 30- to 180-day delinquent account remains on a credit score for seven years, as do collection accounts, closed accounts and charged-off accounts. A lost credit card remains on a report for two years. Chapter 7, 11 and 12 bankruptcies remain for 10 years and Chapter 13 bankruptcy remains for seven years. Unpaid tax liens remain for 15 years. Credit inquiries remain for two years.

5. Good ideas can be bad for your credit score

Never trust collection agencies, Henderson said. For example, a four-year-old bad debt will disappear from a person’s credit report in three years. If that person decides to pay the bad debt because of collection agency calls, it changes the date of last action and that bad debt will remain on the report for seven years from the date it was paid.

The three credit bureaus are not government agencies; they are for-profit companies and consumers have a legal right to challenge errors on their credit reports.

The bottom line: monitoring your credit report is the best way to keep it healthy

At HOPE we educate our clients everyday on making wise credit decisions. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.

Credit Facts In The News Part 2

A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

According to the L.A. Times, buyers who use FHA financing soon will be able to use their $8,000 tax credits for settlement fees, escrow charges, higher down payments or to "buy down" the interest rate.

The Obama administration has put out the official word: Starting soon, first-time home buyers nationwide will be able to turn their $8,000 federal tax credits into cash for use at closing if they use Federal Housing Administration mortgage financing.

But in its final guidelines to lenders and buyers issued May 29, the Department of Housing and Urban Development clarified that buyers obtaining FHA loans through private lenders would have to invest at least some of their own funds -- whether from personal savings or gifts from relatives -- in the form of a minimum 3.5% down payment.

In other words, you'll need equity in the house to participate. This won't be a zero-down plan, with one exception: If you obtain your FHA loan through one of about 10 state housing agency "tax credit monetization" programs, you'll be allowed to pay for your entire down payment with the help of a bridge loan provided by the agency.

Those bridge loans generally are low-interest or no-interest short-term second liens secured by the property, and convert into second mortgages if they are not paid off with the proceeds of the tax credit.

For FHA lender-supplied cash advances, you'll be able to use the $8,000 tax credit -- or whatever-size credit you qualify to receive -- for settlement fees, escrow charges, higher down payments or to "buy down" your interest rate to cut monthly payments.

How will this all work in practical terms? How do you apply? Here's a quick guide:

To start, you'll need to qualify as a first-time buyer under the generous definition permitted by Congress -- that is, you cannot have owned a principal residence during the previous three years, and your household gross income cannot exceed $95,000 for single taxpayers or $170,000 for married couples filing jointly.

To get the process rolling, you'll have to write a contract on a house you can afford to buy and apply for a mortgage through an FHA-approved lender. There are more than 12,000 lenders with that designation. Large banks or bank-affiliated mortgage lenders are more likely to be geared up for the program in the near future, according to industry experts. Home builders, who have advocated credit-monetization programs for months, are likely to be major participants. The tax credit program requires all eligible purchases be closed no later than Nov. 30.

Besides the usual mortgage application information, the lender is likely to require some extra paperwork, based on FHA guidelines:

* A filled-out IRS Form 5405, which is your request to the federal government to send you a tax credit check. You can file an amendment to your 2008 return and get the credit within a matter of weeks, or you can file for it on your 2009 taxes. Most buyers are expected to opt for the amended return route. Form 5405 is available for download at www.irs.gov.

* Proof that you have no outstanding judgments, liens, unpaid taxes or other obligations that could reduce or eliminate the tax credit you're seeking.

* Confirmation from your employer that you are not subject to wage garnishments, which could also affect the amount of the credit.

Your lender will be strictly limited on what it can charge for providing you tax credit money in advance. According to FHA guidelines, fees must be reasonable and nominal -- generally no more than 2.5% of the expected tax credit. For example, if you're in line to receive the full $8,000 credit, that would mean the most you could be charged for the cash in advance typically would be $200.

A senior HUD official said that the agency wanted to keep these fees as low as feasible to avoid abuses or gouging, and that HUD would be monitoring transactions to make sure participating lenders were adhering to the guidelines.

At HOPE we educate our clients everyday on making wise credit decisions. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.