Credit Suicide
Few things influence the home buying process more than your credit. I like how Clark Howard refers to the three credit repositories as, "the three screw-ups". There is some validity to that, and hopefully recent legislation will help clean up many of the inaccuracies. Regardless, lenders need a source to determine levels of risk for lending money? and the Fair Isaac Company is where it lies. (Note: Fair was one of their last names? doesn't necessarily denote fairness.)
There are close to 50 different things that influence your credit; some good, some bad. Within those 50, there is some 14,000 variations?talk about a fragile balance! For example, did you know that if you pay off a collection it might actually lower your score! Don't worry most lenders don't know it either. Also, beware of credit counseling services that promise all kinds of miracles. The only things that can be legitimately removed from your credit are things that are invalid, erroneous, or outdated. Aside from that, if it is yours? it's yours. There may be ways to "flower it up" but it isn't coming off. (Being intellectually honest, you know it shouldn't either.)
If you are going to be hunting for a home, be sure to curtail the temptation to go out make purchases that may affect you credit. Obviously you wouldn't want to go buy a car, but other things that may not be quite as obvious may be the purchase of furniture or home improvement items that would need financing. Chances are you may need these things, but wait till after closing.
What is the biggest credit mistake?
You wouldn't believe how common it is! The biggest credit mistake that most of us make is closing our old paid off credit cards. I know that is seems like the right thing to do when you pay off the balance but 15% of your FICO score is made up of your credit history. If you close a credit card with no current balance that you've had for years, you are getting rid of a lot of your credit history.
Another 30% of your FICO score is made up by your Debt to Credit Limit ratio. With this component, you show how well you manage the credit extended to you by using it wisely and judiciously. Let's say that you had two cards with $2,000 limits and one was maxed out and the other one was just paid off. Well you have $4,000 of credit extended to you and you're using almost $2,000 of that credit (you don't want to go over 50%). Now you cancel the paid off card and your new debt to credit limit ratio is 100% ($2.000 out of $2000). Ouch, that hurt your credit score.
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MORE RESOURCES:
 Boston Globe | Former Credit Suisse broker arrested in US Swissinfo, Switzerland - A former Credit Suisse broker has been arrested for fraud and conspiracy over deceptive sales of subprime-related auction-rate debt in the United States. ... Former Credit Suisse broker charged with subprime-linked fraud in ... UPDATE 1-FBI arrests ex-Credit Suisse broker Bulgarian Wall Street broker indicted |
S&P cuts O'Charley's credit ratings CNNMoney.com - S&P on Thursday cut the company's corporate credit rating to "B+" from "BB-" and its senior secured credit facility rating to "BB" from "BB+. ... Cut north-west or bust Upstate NY water authority rated AA |
 CEP News | S&P upgrades Raytheon credit ratings 1 notch CNNMoney.com - S&P upgraded the company's long-term corporate credit rating to "A-" from "BBB+." The outlook is "Stable." The Waltham, Mass. ... S&P puts Fifth Third on credit watch Credit rating soars in District 300 Starbucks downgraded to 'BBB' on weakening credit metrics - S&P |
When the Bank Closes Your Credit Account Washington Post, United States - By Joan Goldwasser Q I received a notice from Capital One that it is closing my credit card account because of inactivity. If the company closes the account ... Capital One Spurned Mortgages For Credit Cards - CFO |
The Upcoming Technology of RFID For Contactless Access Control ... MarketWatch - This technology is now being rolled out in the UK and around the World for so called 'BioMetric passports' and credit cards because there are no physical ... |
Credit Crunch: The Sequel U.S. News & World Report, DC - And that certainly seemed to be the case in March when investment bank Bear Stearns became the highest-profile victim of the credit crisis. ... UPDATE 1-US banks' direct borrowing hits record in week UPDATE:Comml Bks Set Record For Avg Discount Window Borrowing The Market: What the Pros Are Saying |
 CBC.ca | Canada bank CEOs see more credit crisis uncertainty Reuters - By Lynne Olver CALGARY, Alberta, Sept 5 (Reuters) - Fallout from the US subprime mortgage crisis and subsequent credit crunch has left nagging regulatory ... Markets still rocky but underlying environment 'benign': Deutsche ... |
 Minyanville.com | As the Credit Strains Linger, Pimco’s Gross Calls for Intervention New York Times Blogs, NY - Banks and businesses are still having trouble raising money, according to data on Thursday that reinforced the prospect that the year-long US credit crisis ... Freaky Friday Potpourri: Help Wanted in Washington! Pimco's Bill Gross hits the panic button 'Financial Tsunami' To Engulf Markets, Says Pimco's Gross |
Credit Suisse appoints India investment banking MD Hindu Business Line, India - MUMBAI: Credit Suisse on Friday announced the appointment of Mr Pankaj Kalra as the Managing Director of its India investment banking department. ... Credit Suisse hires Merrill banker in India Credit Suisse appoints Pankaj Kalra, MD, investment banking Merrill Lynch Hires Dick Barrett and Mark Ellman to Strengthen ... |
 Ottawa Citizen | UPDATE 2-Lehman credit spreads widen amid KDB speculation Reuters - Lehman's credit default swaps rose 20 basis points to 345 basis points, or $345000 per year for five years to insure $10 million in debt, from 325 basis ... Credit crunch: Small Korean bank in $6bn bid to rescue Lehman Southpaw: Blood now, pay later: banks get ready for bonus season Lehman nears rescue deal with KDB |
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