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5 Ways to Improve Your Credit Score

By David Bakke, Money Crashers

In today’s world, your credit score can have a significant effect on the financial aspects of your life. Your credit history determines loan and credit card interest rates, can raise your insurance premiums, and can even be a determining factor for getting a job.

Therefore, it’s very important to take steps to achieve and maintain a healthy credit score, and to check up on it frequently to ensure that it is accurate.

1. Pay Your Bills on Time

Your bill payment history accounts for roughly 35% of your credit score, and includes payment of credit cards, auto loans, mortgages, and utility bills. Recent late payments in your credit history have the greatest impact on your score, so if you’ve missed a payment before, avoid repeating this costly mistake!

If you want to boost your credit score, do whatever it takes to pay your bills in a timely manner every month. Use online reminders to help you remember to pay your bills, and inquire at your bank or check with your credit card company to see if they offer email reminders about due payments.

Many companies also allow customers to change the due dates for monthly bills, allowing you to streamline all of your bill payments into one or two occurrences per month.

2. Review Your Credit Report on a Timely Basis

Inaccurate or outdated information can appear on your credit report at any time, and this can significantly hurt your credit score. Identify and correct errors on your credit report quickly using the following steps:

• Request a Free Copy of Your Credit Report. You can order your free credit report online from AnnualCreditReport.com. This is the only website that offers free credit reports, and provides access to reports from each of the three major credit reporting agencies. Once you sign up on the site, you can stagger when you review each of your three credit reports, reviewing one report every four months or so. You can also receive a free credit report if you are denied credit.
• Review Your Credit Report. Once you obtain a copy of your credit report, review your contact information to make sure it is correct. Look for inaccurate information, outstanding balances, and late payments. If you have an open account with the company that reported the late payment, you can call them and ask that they remove it from your credit report. You may also notice a number of inquiries on your credit report, which often merely reflect credit card companies’ efforts to market their products to you. If any inquiries seem unusual, research to find out why they are being made on your account.
• Check Carefully for Bankruptcies and Charge-Offs. Review the details for any bankruptcies and charge-offs on your credit report to ensure their accuracy.
• File a Dispute. If you find errors or incorrect information on your credit report, file a claim to dispute and fix the errors with the reporting agency.

3. Never Close Old Lines of Credit

Many people believe that consumers should close old or unused lines of credit to improve credit scores. Actually, it may be more advisable to keep these lines of credit open.

A large portion of your credit score (approximately 30%) is determined by the amount of available credit you are using. If you have a lot of available credit, but only use a small portion of it, you can improve your credit score.

If you have a few credit cards that you no longer use, don’t let them languish – instead, use them occasionally for a few small purchases and pay them off in full each month. If you don’t use the cards, the issuers may reduce your credit lines or close your accounts. Closing a credit card hurts your credit score.

4. Open New Credit Judiciously

Based on the previous point, you might think that opening multiple new lines of credit will improve your credit score. This isn’t true, however, as opening several new lines of credit in a short period of time will negatively affect your score.

New credit accounts for about 10% of your score, and credit reporting agencies constantly monitor your activity, so open new lines of credit judiciously. If you find good deals on cash back credit cards or credit card sign-up bonuses, tread lightly.

5. Carefully Mix Credit Lines

The mix of credit lines accounts for about 10% of your credit score. If you have a mix of credit cards, loans, and other types of credit, you can positively impact your score. Walk this line carefully so that you do not overextend yourself, however.

Final Thoughts

In addition to paying your bills on time and maintaining lines of credit, other factors play a role in determining your score. For instance, the length of time you have had credit also accounts for about 15% of your credit score.

Over time, as you build and establish your credit, your score will improve. With careful, regularly scheduled awareness and monitoring, you can improve your score and enjoy all the benefits that come with a solid credit history.

0 comments - Posted at 9:00 AM

Categories: Economic News

Voters Issue Warnings to Politicians on Housing

A majority of American voters say they value home ownership and oppose any steps by the government that make it more difficult to own a home, according to a nationwide poll of 1,500 likely voters, commissioned by the National Association of Home Builders. In fact, the poll revealed a word of caution to any politicians  running for office or re-election that they better not put roadblocks in the way of home owners’ — or those aspiring to be home owner’s — if they want to win votes.  

About 96 percent of home owners surveyed say they are happy with their decision to own a home, and even 84 percent of home owners who owe more on their mortgage than their home is currently worth say they are happy with home ownership. However, certain actions or threats by lawmakers lately are putting up roadblocks to home ownership, the voters say.

"The American electorate is sending a clear message that owning a home remains a cornerstone of the American dream and preserving a federal commitment to home ownership is essential to maintain a thriving middle class and get housing and the economy back on track," said Neil Newhouse, a partner of Public Opinion Strategies who conducted the survey.

2 Warnings From Voters

Here are two main messages that voters had for lawmakers, according to the survey: 

1. Leave the mortgage interest deduction alone. Seventy-three percent of voters say they oppose eliminating the mortgage interest deduction or reducing it in any way across income levels. In fact, 68 percent of voters say they would be less likely to vote for a congressional candidate who proposed to end the mortgage interest deduction — which held true across party lines. 

2. Do more to help home owners and those who want to be. Three out of four voters — including home owners and renters — say it’s “appropriate” and “reasonable” for the federal government to provide tax incentives to promote home ownership. Two-thirds of those surveyed say that the federal government should do more to help qualified home buyers get a long-term or 30-year fixed-rate mortgage.

Also, nearly seven out of 10 voters who are not currently home owners say they want to buy a home one day but too many roadblocks still remain. The biggest obstacles to home ownership reported were job uncertainty and saving for a down payment and closing costs, according to the survey. 

"Even in a down housing market, home ownership remains a core American value, with the vast majority of citizens who do not currently own a home saying they want to buy a home," Bob Nielsen, president of the National Association of Home Builders, said in a statement. "Those running for office in November need to understand that voters will not look kindly on any candidates who seek to dismantle the nation's long-term commitment to home ownership."

Source: National Association of Home Builders

0 comments - Posted at 9:00 AM

Categories: Economic News

U.S. Home Values Unchanged in November; Fewer Major Metros Show Value Declines

According to the Zillow Real Estate Market Reports released today, national home values have remained essentially flat, falling only 0.1 percent from October to November 2011 to $147,800, representing a 4.6 percent decline since November 2010.

Regionally, home values appreciated or remained flat from October to November in 60 percent of the 165 housing markets covered by Zillow, compared to 24 percent last year. Major metropolitan statistical areas (MSAs) that experienced flat or increasing home values include Los Angeles, Washington, Miami-Ft. Lauderdale, Fla., San Francisco and Detroit. On an annual basis, the median home value is down for nearly all (90 percent) of the 165 MSAs covered by Zillow, although the rate of annualized depreciation has slowed significantly in the majority of the markets.

“Overall, we are seeing encouraging signs in housing data such as sequential months of slowing depreciation rates, stabilizing markets and organic improvement in value trends, largely in the absence of government policy intervention,” said Zillow Chief Economist Dr. Stan Humphries said in his analysis on the Zillow Research page. “However, we’re not out of the woods yet. Supply and demand are still not in balance in many markets and we do expect higher foreclosure liquidation rates near-term, which will put additional downward pressure on home values.”

Dr. Humphries continued, “Even with the anticipated increase in foreclosures, look for 2012 to be a transitional year in which home values fall modestly followed by a prolonged period of flat home values. We’re still three to five years away from ‘normal’ housing market conditions.”

Author:Lauren Riefflin from Zillow.com

0 comments - Posted at 10:12 AM

Categories: Economic News | Real Estate News

Financial Resolutions for 2012

1) Reduce credit card debt

Did you know that 14 million Americans – 6% of us – are still paying off their holiday bills from 2010? Or that the average household currently has about $15,000 in credit card debt right now?! As you rethink your needs versus wants in the New Year, think about regaining control of your spending and coming up with a plan to pay off this high interest debt.  Chip away at the cards with the highest interest rates and work your way down to the lowest. Or, look into doing a balance transfer (Go to a site like lowcards.com or cardratings.com to see what your options are).

2) Boost your credit score

Analysis from Zillow Mortgage Marketplace shows that you need credit score of 720 or higher to get the best rates, and that you’re unlikely get a single loan quote if your score is below 620. Lenders aren’t the only one looking at this all-important three-digit number. So are landlords,  employers and numerous others. It’s therefore crucial that you work toward improving it.  You do this by paying your bills on time (This accounts for 35% of your score); paying down your debt (The amount you owe is 30% of your score), and spending less, using no more than 30% of your available credit; ideally, just 10%.

3) Fund an emergency account

Fewer than 4 in 10 Americans have a fully funded rainy day account! That’s crazy, given how fragile this economy is. You need a cushion — 6 months to a year’s salary — set aside in an accessible account, such as a basic money market account.  It’s the best way to protect yourself.  Use this money to cover unexpected expenses and replace interrupted income.

4) Invest smarter

It’s been a crazy ride on Wall Street this year. Now’s a good time to take a look at what you have.  Are you properly diversified?  Do you have a nice mix stocks, bonds, and cash? Is this mix both age and goal appropriate?  Stocks may be up and down (and the swings have been substantial in 2011), but historically, equities give you the best returns long-term.

5) Get serious about retirement

Stop complaining that you’ll “never” retire and simply come up with a plan to make it happen.  First, run the numbers to see how much you’re going to need to live comfortably in retirement (Go to chosetosave.org for ballpark estimates), and then get to work, stashing away as much as you can into an employer-sponsored plan.  Also take advantage of company matches, and catch-up contributions. Finally, consider spending less (!), and redefining your vision of retirement.

Vera Gibbons is a financial journalist based in New York City and is a contributor to Zillow Blog. Connect with her at http://veragibbons.com/.

0 comments - Posted at 11:56 AM

Categories: Economic News

How Housing Plays Politics in 2012

Housing may have been the catalyst for the Great Recession, but it is not number one on America’s fix-it list for our next President.

Fixing the economy should come before housing policy, according to a new survey by real estate website Trulia.com.

Americans first want to see lower unemployment, more employment growth and reducing the federal budget deficit.

“The partisan split in Washington and the recent housing policy debates are not what Americans want from their government,” said Trulia’s chief economist Jed Kolko. “Although Washington and lobbyists have been debating the conforming loan limit, Americans would rather see more action to make refinancing easier and to deal with vacant homes.”

Still, those same respondents, 72 percent of them, said government policies should encourage home ownership. Wasn’t that “encouragement” kind of what got us into this mess?

The Trulia survey seeks to draw distinctions between what Republicans want from housing policy and what Democrats want, but the answers don’t differ all that much, except when it comes to helping troubled borrowers. 74 percent of Democrats want government to encourage mortgage loan modifications that reduce principal balances. Just 61 percent of Republicans support that.

For respondents from both political parties, the number one sign of housing recovery would be fewer defaults and foreclosures; at the bottom of the list is rising homeownership.

This is perhaps the most troubling finding for the near future of the housing market, because we are going to see more foreclosures in the first half of 2012, as banks work through the enormous backlog of delinquent loans that were on hold this year due to the so-called “robo-signing” foreclosure paperwork mess.
           
Since consumer confidence is going to be the driving factor in housing’s recovery, increased foreclosures and the headlines that go with them, regardless of where they are locally, will have an overall impact on home buying nationally. Sales have been stabilizing slightly this Fall, but likely only because foreclosures had been stalled, so the distressed share of the market was not so blatant; that’s about to change.

Most analysts are predicting that the big pain will be in the first half of 2012, and as those foreclosures are supposedly quickly absorbed into the market, organic home buyers and sellers will come back. However, more than half of those surveyed by Trulia said they were not at all confident that the President can stabilize the housing market in the next year. This is a notable increase since he took office.

Published: Wednesday, 14 Dec 2011
By: Diana Olick
CNBC Real Estate Reporte

0 comments - Posted at 9:00 AM

Categories: Economic News | Real Estate News

U.S. Home Values Continue to Fall, But Rate of Decline Stabilizes

According to the Zillow Real Estate Market Reports released Tuesday, December 13th, national home values have continued to decline, dipping 0.3 percent from September to October 2011. There is a bit of a silver lining in this month’s report, however, as the rate of monthly depreciation has stabilized around -0.2 percent to -0.3 percent over the last few months, which is “an improvement from the rates reached in the fall of last year,” Zillow Chief Economist, Dr. Stan Humphries, said in his analysis on the Zillow Research page.

Of the 156 metropolitan statistical areas covered in the Zillow Real Estate Market Reports, 95 showed monthly home value depreciation and 39 metros showed monthly home value increases. Twenty-two metros remained flat. The “crisis of consumer confidence along with high rates of negative equity are the biggest factors hindering a housing recovery,” said Humphries. “However, I’m encouraged by the positive, albeit slow, progress in working down the unemployment rate which should help to improve consumers’ appetites for buying homes.”

Zillow expects homes values to fall another 2-4 percent before reaching a bottom in 2012.

0 comments - Posted at 11:35 AM

Categories: Economic News | Real Estate News

Quiz: What Type of Buyer Am I?

by Realty Times Staff from realtytimes.com

Do you let impulse rule your decisions or are you a more methodical consumer? Your past spending habits have a lot to say about what type of home buyer you'll make. Take this quick quiz to see your strengths and possible buying pitfalls.

1. I save money: (a) on a regular schedule; (b) when I have money leftover; (c) pretty much never. I have very little savings.

2. When I shop: (a) I use a list; (b) I do pretty good about remembering what I need; (c) I tend to buy things that catch my eye.

3. How important is it for you to appear well-dressed and successful? (a) I know it's important for things to look good, but I don't like to overspend (b) looking good is worth spending a little extra money (c) I live to look like a million bucks!

4. I tend to return purchases to the store: (a) not often; (b) once a month; (c) all the time. If you have a receipt you can return it!

5. I have a car that I: (a) own; (b) make payments on; (c) lease.

6. Before I make a big purchase: (a) I research the latest prices and trends; (b) I think about what exactly I want to buy; (c) I've generally just gotten a raise or bonus.

7. Large purchases make me feel: (a) like a grown-up; (b) a little uneasy; (c) successful and in control.

If you answered mostly a's then you are a careful, methodical shopper. Your strengths in the home buying process are clear. You won't make an impulsive decision. Changes are you'll shop around a lot before you make your final choice. You have plenty of money saved. You are very money conscious. You and homeownership should have a beautiful relationship.

If you answered mostly b's then you tend to pretty good with your money. You don't overspend, but you should focus on saving more. Homeownership comes with a lot of unexpected expenses. Build up an emergency fund and a downpayment account.

If you answered mostly c's then you need to beware. You could very easily be an impulsive shopper. Looking good is really important to you, so be careful not to overspend on a home. You also may have a hard time with commitment. You may lease your car or return items to stores. Be sure you spend time running real numbers and putting together a solid plan for buying before you start the process.

0 comments - Posted at 10:07 AM

Categories: Economic News | Real Estate News