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How to Maintain Good Credit

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Good credit is sometimes difficult to achieve. Even when it is achieved often times it’s hard to keep your credit score in a decent range. One of the main credit factors that determines your credit rating is whether you pay your credit card bills on time or whether you frequently forget to send out that payment.

People have so many reasons for not paying their bills on time.  Some of them are due to plain neglect and some are due to loss of a job or inability to work because of illness. Regardless of the reason, the credit card companies can report you to the credit bureau if you are over 30 days late on your payments.  If you are just a few weeks late, they can make your life miserable by fining you huge fees.

When you find that you have gotten behind on your payments and your late fees are accumulating, you can always call your credit card company and ask for them to work with you on perhaps lowering your fee or eliminating it altogether depending on your reason for missing the payment. You’d be surprised how many fees can be eliminated by doing this.
If you are over 30 days late on your payment, you will have to find out whether you have been reported to the credit bureaus.  If they have reported you, then this is where your credit score will start to go down. It will take a while before that negative ding will go away.  The more times you are reported to the credit bureau, the lower your credit score will go.

You can contact the credit bureaus by calling these numbers:

  • Equifax (800-685-1111)
  • Experian (888-397-3742)
  • Trans Union (800-888-4213)

Maintaining good credit will help you in your efforts to attain financial security. Financial security is defined as the comfortable feeling that your finanical resources will be adequate to fulfill any needs you have as well as most of your wants.  Doesn’t everyone deserve that?

Maintain good credit by paying your bills on time and keeping track of what is going on with your credit report before any big problems arise.

Why Our Housing Market Failed and Why a Bailout is Necessary

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Why did the housing market FAIL?  GREED, CORRUPTION and IGNORANCE!

In 2003, I was taking some Mortgage Banking courses to obtain my Mortgage Banking Certification. One of the courses was introducing, what they termed  new instruments for financing mortgages. The new instruments were not available in the state of Texas at that time due to the state Homestead Laws.However, later that year they would become effective because the laws would be relaxed allowing homeowners to decide if they wanted the protection of the current laws or wanted to take advantage of one of the new financial mortgage instruments to get more house than current laws allowed them to have with their present income.

I was not new to the mortgage industry.  I had been in the mortgage business for 20 years.  I also recognized that these instruments were not new either.  They were just redesigns of the products used by Savings and Loans during the 1980s for the most part.

I voiced an unpopular opinion at that time.  I said to all who would listen, This is NOT good! There are to many greedy and uninformed people for this to work.  We will see the S&L crisis happen all over again, only worse this time because of the increased practice of securitizing pools of mortgages and marketing them to investors as MBS (Mortgage Backed Securities) investment pools.

I watched as the parent company of the company I worked for went from buying and selling pools of loans in the $100,000 to $1,000,000 range to $1,000,000 to $1,000,000,000 range in a matter of 6 months to a year.

New residential construction sprang up on every vacant lot.  Older homes were bought out, torn down and huge new houses took their place.  Everyone who could identify a hammer from a nail was now home builder.

Older residences were selling on the market for 3, 4, 5 times the actual replacement cost, let alone the actual value.  Everyone was trading up from the home the owned before to one 3 or 4 times bigger, newer and of course better. Greedy lenders convinced greedy and gullible buyers that by the time the ARM (Adjustable Rate Mortgage) they were purchasing to buy the house actually went up, their salary would have increased to equal the adjustment.  Anyone and everyone could own a home now.  It didn’t matter that the end payment was many times more that their income warranted they would be able to sell or refinance when the time came to pay more.

Why should we pay to bail out the housing market? WHY BAIL OUT GREED, CORRUPTION and IGNORANCE?  I don’t know, no one has convinced me yet.

But, I don’t want to see the Economy collapse.

I personally do NOT believe in bailing out companies or homeowners because they made a bad judgment call, and certainly not greedy or uninformed people. I saw too much to even pretend that I imagine that the majority of those involved don’t deserve exactly what has happened, including the investors.

However, (and this need a lot more research, as to bail out terms and conditions) we are dealing with a different age and economic mix than prevailed in the 1980s.  Many of our investors are foreign entities.  The soundness of our dollar on the worldwide marketplace and our economic standing in the world depend on our ability to stabilize the market and regain the trust of the entire world.  We have no choice but to underwrite the investments that are held by so many foreign investors.

This being acknowledged, a very strict oversight committee must oversee this bail out.  Not by backbiting, corrupt politicians, but an honest, trustworthy, independent committee.  Our main problem here, of course, is finding honest, trustworthy, independent and (let me add) incorruptible people that are experts in the mortgage industry.

This article was written by Virginia Ritchie.

Falling into debt is like falling into quicksand

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Debt is quickly becoming America’s ball and chain. The personal credit card debt held by consumers as of July 10, 2008 is $5,312,998,074,837.08. That is $5.3 trillion dollars of personal debt.

So you are not alone in your struggles to control your debt. The whole nation is right along with you.

Reasons to avoid debt

  • The weight it causes on your day-to-day functioning can be extremely burdensome.
  • Problems arise because sometimes it takes years to actually feel the pinch and pain you have gotten yourself into.
  • The credit card companies delight in your failure. They make things so easy for you to get into debt and they love it. One day, you make be sinking so fast, you can’t get out.

    • Track your spending

    Hopefully you take managing money seriously and actually look and keep track of how much money is coming in and how much money is going out of your accounts. Being oblivious to this critical factor is what keeps people at debt’s beck and call.

    If you were to relate this feeling to gaining weight, assuming that you didn’t have a medical problem that was causing weight gain, the day-to-day input builds up and soon you’ve discovered you’ve put on 20 pounds.

    Stop getting further into debt

    Have the courage to look at what is causing you to go into debt. Sometimes it takes a little cheering from others to encourage you to start making a strategic debt reducing plan.

    Learn from the debt control experts

    Dr. John DeMartini, teaches debt management principles that are so simple that anyone can remember and practice them. If I were to sum up his philosophy it would be: “If you emotionalize money, it goes. If you put strategies with it, it grows.”  That philosophy is so true.

    Pay your debts on time

    Automate your credit card payments using online bill paying with your local bank. Life so frequently just gets going and people forget to put payments in the mail. Don’t let being forgetful be the cause of late payments. Late payments can ruin your credit.

    Order a free credit report

    A recent amendment to the federal Fair Credit Reporting Act requires each of the nationwide consumer reporting companies “ Equifax, Experian, and TransUnion to provide you with a free copy of your credit report, at your request, once every 12 months. 

    The Federal Trade Commission offers you a free credit report, so take advantage of it and find out what problems you may be having with your credit.

    Make a plan and move on

    Perhaps the worst thing to do when you are in financial trouble is to give up.  It’s also the easiest and certainly it’s understandable.  However, when you give up, life just gets worse. It might seem like you have little or no control over your situation, but in reality, the opposite is true.  

    William Ernest Henley, in the late 1800’s, said, “I am the master of my fate, the captain of my soul.” Your attitude determines your future. Make a plan to track your finances, pay your bills on time and take charge of your debt reduction plan today.

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    Mortgage Loans In The News

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    Mortgage loans     are in the news today as two of the largest mortgage companies in the United States, Fannie Mae and Freddie Mac, lost nearly half of their stock value during the week of July 11, 2008.  They own over one half of all the mortgages in the United States, with a total value of $5.2 trillion dollars.  They have posted $11 billion in losses.

    For the average Joe, those numbers are barely imaginable. But wait…let’s see what $5.2 trillion looks like…$5,200,000,000,000.00.  So if they’ve lost $11,000,000,000.00 what is left? Try $5,189,000,000,000.00.

    So what percentage of their assets did they lose?  I believe that would be .002. Please correct me if I’m wrong. To relate that to everyday living, if your monthly take home pay was $3,000 and you lost .002 percent of that, how much would that be?  $6.00.

    Is that why Senate Banking Committee chair Christopher Dodd (D-Conn.)  called the mortgage giants sound, saying they are being unfairly punished by Wall Street?

    Mortgage loans are probably the single largest purchase you will make in your lifetime so it makes sense that a lot of people are doing searches for the term “mortgage loans.” In fact, according to one reliable keyword tool on the Internet, there are 637,449 daily searches for just the word mortgage.  That same keyword tool tells us that all of the advertising dollars spent on just the word mortgage during one month total $4,603,982.63! Google is making money from the mere word “mortgage“!

    The bottom line is that people with risky (sub-prime) loans are defaulting on their mortgages causing nationwide economic worries. This may impact the rest of us, making it difficult for us to buy or sell our homes.  Seems that the best advice is to avoid getting another mortgage loan and keep our own mortgages current.

    Federal Reserve Rate Remains The Same So What Should Do We Do?

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    Should I Refinance My Mortgage?

    Having the advice of someone who is an economist from Quicken loans, is probably a little better than the advice I can get through my local connections.

    So Bob Walters, from Quicken loans, if you say that “Homebuyers and homeowners looking for a new mortgage need to navigate this uncertain market carefully,” I will take heed. I’m not really looking for a new mortgage but for those of you that are, well…proceed with caution. [Read more…] about Federal Reserve Rate Remains The Same So What Should Do We Do?