What Millennials need to know about credit scores

by Shelton on May 31st, 2014

filed under Credit Scores

Recent surveys have indicated that the Millennial generation, those 18 to 34 years old, have adopted prudent, frugal habits when it comes to money.

They shun debt, tend to use cash, and see the value of saving money. Coming of age amidst a near-economic collapse and resulting Great Recession will form those kinds of attitudes.

But a new survey shows one area where Millennials come up short financially. Theyre pretty much in the dark when it comes to their credit score and why it is so important.

The survey by the Consumer Federation of America (CFA) and VantageScore Solutions, LLC shows Millennials know less about credit scores than other adults. They know less about the businesses that use the scores, less about who collects information on which the scores are based and less about how scores can be improved.

Bad information

For example, they are more likely than other adults to think that credit repair companies can always or usually be useful in removing errors and improving scores. In reality, the best way to raise a credit score is to pay your bills on time.

Because of this knowledge gap, Millennials are less likely than other adults to take advantage of the federal law that allows you once a year to get free copies of your credit report from all three credit reporting agencies.

Obtaining their free credit reports not only allows consumers to check the accuracy of the reports but also appears to motivate them to learn more about credit scores, said CFA Executive Director Stephen Brobeck.

Looking in the wrong places

Because of a lack of knowledge or awareness about credit reports, Millennials may also be prone to look in the wrong place for their credit report. There are a number of commercial services that offer credit reports some even saying its free, but there is always some service you have to sign up for in order to obtain the report.

The easiest way and the way with no strings attached — to obtain a credit report is to visit www.annualcreditreport.com or call a toll-free number, 877-322-8228.

What else should Millennials know about their credit score? For one thing, having and using some credit is helpful to your credit score.

For example, if you have a couple of credit cards and charge a few regularly-budgeted items like groceries and gasoline each month, it helps your credit score if you pay the full balance each month. That last part is important.

Responsible use of credit

Credit agencies look at how much credit you have and how you use it. If you carry a credit card balance, the credit card companies will love you but it lowers your credit rating. Paying off the balance in full each month tells creditors you use credit responsibly.

Millennials should also know that that credit card issuers and mortgage lenders will use these scores when deciding whether or not to extend credit and at what rate. The better your score the lower your interest rate.

Experian, the credit reporting agency, offers a couple of other points of credit advice. Only apply for a new credit account when you need it. Dont open an account just to get a discount on a purchase.

Also, Experian says you should not open accounts just to have a better mix of credit. In fact, it probably wont help you score.

Balance transfer cards dont help

Balance transfer credit cards are a popular way to reduce credit costs but moving credit around doesnt help your score. Better to pay off debt rather than move it.

Dont close unused credit accounts thinking that will help your credit score. In fact, it is likely to have the opposite effect. Owing the same amount of money but having access to less credit will lower your credit rating.

Millennials, by and large, dont kid themselves about their credit knowledge. Only 40% think they have good or excellent knowledge about credit scores, while 62% of those 35 years and older think they have this knowledge.

The survey did identity a group of Millennials that actually possesses a lot of credit information. Those who have obtained their credit reports know more about credit scores than those who havent.

Bite bullet on finances: CRISIL to govt

by Shelton on May 31st, 2014

filed under Finances

Analytical company CRISIL on Saturday said a decisive mandate given in the Lok Sabha elections should embolden the next government to take hard decisions on its finances by cutting subsidies and curbing wasteful expenditure.

The decisive mandate has created the best environment in a long time to bite the bullet on government finances to ensure a long and healthy phase of economic growth in India.

It asked the government to go for fiscal consolidation by ensuring the money spent on social welfare schemes created durable assets and did not just remain cash handouts.

In the interim Budget, the Centre#39;s fiscal deficit was projected to come down to 4.1 per cent in the current financial year from 4.6 per cent estimated for the previous year. The estimates may be revised in the full Budget to be presented by the next government later.

Chief Executive and Managing Director Roopa Kudva said, The lowest-hanging fruit are fast-tracking of projects in the pipeline and resolving iron-ore and coal-mining issues. This will improve the efficiency of capital now stuck, pave the way for better returns on investment, create jobs, lift income growth and spur private consumption demand.

It said the government should tame inflation, give boost to manufacturing, improve asset quality of banks and bolster corporate debt markets to put India on growth path of 6.5-seven per cent in the medium term.

The firm said, Typically, monetary (cut in interest rates) and fiscal instruments (increase in government spending) are used to prop a sagging economy in the short run. But India has run out of such counter-cyclical policy ammunition as its inflation and deficits remain high and need to be trimmed.

4 Best Credit Cards for Improving Your Credit in Fort Lauderdale

by Shelton on May 30th, 2014

filed under Secured Credit

One of the most effective ways to rebuild your credit history is to establish good credit through the responsible use of a low-interest credit card. This is not to say that if you have a credit card and you pay what you owe promptly and consistently your credit will be rebuilt fast, its a gradual process.

There is no quick remedy for damaged credit. However, you can choose to commit to responsible personal-finance management to avoid or minimize your chances of being in the same situation again.

Much has been written about the effectiveness of secured credit cards to rebuild credit. A secured credit card has a fixed credit limit and is linked to a savings account. As financially sound as it is, the product earned a bad reputation following events wherein companies offered secured cards to prey on the credit-burdened market, charging hefty interest rates and outrageous fees.

Considering the fact that people with poor credit often struggle to obtain a credit card, the ability to qualify for a secured credit card will likely come as a relief. To help you get your credit back in shape, here are four credit cards in Fort Lauderdale that will actually help you rebuild your credit safely:

1. BrightStar Credit Unions Secured MasterCard

BrightStar Credit Union Secured MasterCard is not a credit card youll have to worry about.

With 8.99% APR when you open your account based on your creditworthiness and 3.99% introductory APR for balance transfers on new accounts, BrightStar Credit Unions Secured MasterCard gives you a great opportunity to rebuild your credit without necessarily having any credit at all.

Because there is a low APR on balance transfers, you can move money from a high-interest credit card to this secured card to save money in interest payments with this lower APR.

2. City County Credit Unions Secured Visa

If you want to enjoy extra perks while rebuilding your credit, City County Credit Unions Secured Visa is what you have in mind. With up to a $2,000 credit limit, City County Credit Unions Secured Visa also offers automatic payments from your savings or checking account. It comes with a 16.9% APR on purchases, cash advances and balance transfers, an annual fee of $50, and penalty fee of up to $35 for late payments.

It is important to note that late payments are likely one of the major reasons you have poor credit in the first place. City County Credit Unions late-payment fee should serve as a form of deterrence, dissuading you from missing payments and hurting your credit further.

3. Tropical Financial Credit Unions Visa Platinum Secured

One of the keys to rebuilding credit is to acquire a card from a financial institution that reports to credit bureaus without imposing unreasonably high fees. With 17.99% APR and 3 percent on cash advances, Tropical Financial Credit Unions Visa Platinum Secured card is a great vehicle for rebuilding credit.

Tropical Financial Credit Union’s Visa Platinum Secured card has no annual, application and balance transfer fees. However, it charges up to $25 for the first late payment and up to $30 each if you miss two or more payments within six months. The credit union also charges an additional $25 if payment is returned for any reason.

4. Florida Community Banks Secured Visa Card

Florida Community Banks Secured Visa Card offers a high 20.99% APR for purchases and a $35 annual fee, which will hopefully work to deter you from not paying your balances off in full. It has a minimum security deposit of $300 and a credit limit of $5,000 .

There is no quick fix to rebuilding credit, but if you are serious about your getting your credit history and score back to full strength you will want to make sure youre using the best credit card available to you.

Showing the credit bureaus and your prospective lenders that you can be trusted with their money starts with the responsible use of a credit card. Discipline and patience are required to improve your score and unlock major savings in the form of lower interest rates.  With a credit card that offers a low interest rate, you will be able to rebuild even the lowliest credit history.

City County Credit Union and Tropical Financial Credit Unions are clients of GOBankingRates.

Nebraska Students Prepare For Financial Futures

by Shelton on May 30th, 2014

filed under Student Credit Cards

LINCOLN, Neb. — For Nebraska high school students, a secure financial future could be just a click away. Thanks to the Nebraska NEST Financial Scholars Program, high-schoolers are heading off to college, ready to take on their financial futures.

Students at Lincoln Christian join students from more than 70 Nebraska schools in learning personal finance, a skill that Treasurer Don Stenberg said is critical.

The online program teaches students financial information, like what the Fed is. And it does so in a way that connects with them.

Wed talk about them or send a Snapchat. Some of the characters in them were kind of funny, said senior Nolan Peschel.

I kind of explained everything in a fun way, said senior Hannah Christianson. With college loans, with savings plans, a lot of the interest rates with credit cards, just a lot of different aspects as far as financial preparation, she added.

It helps students understand their financial futures.

It just kind of opened my eyes to some of the stuff thats out there and available, whether its like student credit cards or student accounts, said Peschel.

Nolan and Hannah are not alone. More than 700 students around Nebraska now have their certifications.

Stenberg said students might not use everything they learn in school, but there are some things that you unavoidably will, and financial literacy or financial information is one of them.

Students said they have already started using that information.

Now that I have a debit card, being cautious with a credit card and using it wisely, making sure Im saving and balancing my checkbook, said Christianson.

Im a little more confident going off to college and not wondering how does all this stuff work, said Peschel.

Stenberg also noted that the students can add this certification to their resumes as they move on to college and beyond.

Home Loan Credit Thaw Comes With Better Jobs Report

by Shelton on May 30th, 2014

filed under Credit Scores

McClatchy-Tribune Information Services

May 04–Prospective homebuyers still have plenty of hoops to jump to through to get a loan, but as little as 3.5 percent down with a credit score of 580 soon will be acceptable locally soon for Federal Housing Administration-backed loans.

The 580 credit score with 3.5 percent down has been an FHA-backed loan minimum, but most banks have stuck to 620 or even 680 credit scores as a precaution in these days of Great Recession recovery.

Citizens Bank and Trust in Van Buren, however, recently received notice from a secondary lending overlay group that it plans to drop its minimum credit score for an FHA-backed loan from 620 to 580, with 3.5 percent down, according to Citizens Bank Mortgage Loan Manager and Vice President

Alan DeFrees.

The Wall Street Journal recently reported on the credit thaw, saying that while standards remain tight by historical measures, lenders are accepting lower credit scores and reducing down-payment requirements.

Scores on purchase mortgages stood at 755 in March, down from 761 a year earlier, according to mortgage-software provider from

Ellie Mae. Those on purchase loans backed by the FHA dropped to 684, compared with 696 one year earlier.

Average credit scores on purchase loans closed through a consortium called LendingTree fell to 679 in March, down from the year-earlier 715.

Traci Wilhelm, mortgage loan originator with United Federal Credit Union in Fort Smith, said Friday that about 40 percent of their loans in a four-state region are made up of Veterans Affairs and FHA-backed loans for homes that range in price from $110,000 to $150,000. The region includes Arkansas, Oklahoma, Texas and Missouri.

Home ownership is widely viewed as a stabilizing factor in society. Much of this, however, is predicated on job security. As the job market picks up, which it appears to be doing, so may home ownership. The Labor Department jobs report for April released Friday showed that milder weather helped employers add 288,000 jobs. It was the most in more than two years.

The unemployment rate also fell to 6.3 percent from 6.7 percent, the lowest since September 2008. The decline came because the labor force, which includes those working and looking for jobs, shrank by 806,000.

Owning is what strengthens neighborhoods, said SWBC Mortgage Branch Manager

Rose Catalano. Its good when you are having a percentage of the population owning their home because they have responsibility to their town and their city to improve it. Theyve made that commitment. Renters can pick up and leave any time.

Catalano said FHA loans, although they may require a mortgage insurance premium (MIP) are still favorites of first-time homebuyers.

The annual mortgage insurance on an FHA loan is 1.35 percent of the loan amount, divided by 12. The monthly insurance on $100,000 home loan would be about $113. An up-front 1.75 percent loan insurance is also needed for the risk of default. That sum is usually financed onto the monthly mortgage payment.

At least with Catalano, more young professionals coming out of college are showing more interest in buying a home. And this impresses her. According to Bankrate.com, borrowers can use their own savings to make a home down payment. But other allowed sources of cash include a gift from a family member, or a grant from a state or local government down payment assistance program.

Maria Lau, senior vice president of mortgage lending at Arvest Bank in Fort Smith, noted in a recent Times Record report that within the past three weeks the housing purchase market has picked back up after a slow winter. Arvest still caries the 620 credit score minimum for FHA-backed loans and retains servicing on its loans, Lau adds.

If you have a credit score below a 660, you would not be able to finance 95 percent, Lau says. Typically, your credit score and your down-payment availability would help a loan officer determine what type of loan you need to be in.

Credit scores have always been important, but even more so after the mortgage meltdown in 2008 with the Dodd-Frank Act and bank reform. A potential homebuyers DTI, or debt-to-income ratio, is also a deciding factor, possibly more than the credit score.

Lau says the Consumer Protection Finance Bureau watches banks and the mortgage closely to protect consumers from banks taking advantage of them. In reality, though, these regulations are possibly hurting the consumer.

It becomes very frustrating, Lau said, when someone has to wait three days to close because a reduced fee caused his or her Annual Percentage Rate to go down. The annual rate that is charged for borrowing, expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction.

If the APR goes up or down .125 percent, you have to re-disclose and wait to close, Lau said. How does that help a family who is trying to get into a home?

For a limited time, according to the Arvest website, Arvest is running a deal to discount mortgage closing costs by $500.

Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan eased to 4.29 percent from 4.33 percent last week. The average for the 15-year mortgage slipped down to 3.38 percent from 3.39 percent.

Mortgage rates have risen almost a full percentage point since hitting record lows about a year ago.

According to FHA.gov, the department of the Housing and Urban Development Office is the largest insurer of mortgages in the world with over 34 million properties since its inception in 1934. It is also the only government agency that operates entirely from its self-generated income. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program.

FHA mortgage insurance is not permanent. It can either go away on its own, or can be refinanced away. For homeowners whose FHA mortgage pre-dates June 3, 2013, MIP goes away when certain conditions are met. For both the 15- and 30-year loan term the annual MIP is canceled once the loan reaches 78 percent of the loan-to-value and annual MIP has been paid for at least 60 months.

To qualify for a conventional mortgage, a borrower generally needs a minimum credit score of 680 and at least 5 percent down. Many lenders require at least 10 percent down.

The National Association of Realtors and the Mortgage Bankers Association said last week it is asking the FHA to lower the annual premiums tacked onto monthly mortgage payments. The agency has raised the fees five times since 2010, from 0.55 percent of the loans value to 1.35 percent.


(c)2014 Times Record (Fort Smith, Ark.)

Visit Times Record (Fort Smith, Ark.) at www.swtimes.com

Distributed by MCT Information Services

The Best Student Credit Cards of 2014, Ranked by MyRatePlan.com

by Shelton on May 30th, 2014

filed under Student Credit Cards

Seattle, WA (PRWEB) May 01, 2014

Today, MyRatePlan.com, an expert authority on credit cards, announced the best credit cards available for students. Students often have no to little credit, so it can be hard for them to get approved for credit cards. With a student credit card though, applicants can get easily approved and start building their credit. Many of these cards even offer rewards for things that students buy often, like books, groceries, gas, and more.

To create their list of the best student credit cards of 2014, MyRatePlan experts weighed approval rates, rewards programs, introductory offers, interest rates, customer reviews, and expert opinions. According to their findings, here are the best student credit cards on the market today:

Discover it for Students

The Discover it for Students card is a great student credit card with easy approval. There are no annual fees, overlimit fees, or foreign transaction fees. With Discover’s generous cash back program, students earn 5% cash back on up to $1500 spent in rotating categories (currently Home Improvement stores, Furniture Stores, and Bed, Bath, amp; Beyond) and 1% cash back on all other purchases. There is a 0% intro APR on purchases for 6 months, and cardholders can talk to a real person anytime with Discover’s 100% US-based customer service. Plus, users receive free FICO scores on all monthly statements.

Citi Dividend Card for College Students

The Citi Dividend Card for College Students is another excellent option for students. This card allows members to build credit while earning cash back fast. Cardholders earn 5% cash back every quarter in must have categories, such as department stores, travel, and more. They also earn 1% cash back on all other purchases. There is no annual fee, and students have the flexibility to choose their payment due date. They can also manage their account online, on their tablet, or on their Smartphone.

Discover it for Students with $20 Cashback Bonus

The Discover it for Students with $20 Cashback Bonus card rounds off MyRatePlan’s list of the best student credit cards of 2014. With this card, users also earn 5% cash back on up to $1500 spent in rotating categories (currently Home Improvement stores, Furniture Stores, and Bed, Bath, amp; Beyond) and 1% cash back on all other purchases. In addition, they earn a $20 Cashback Bonus when making the first purchase within 3 months of approval. This card has no annual fees, overlimit fees, or foreign transaction fees. Students receive free FICO scores on all monthly statements, so they can help build credit.

These are the best student credit cards available for consumers today. For more information regarding student credit cards, access MyRatePlan: http://compare.myrateplan.com/credit-cards/compare/compare-student-credit-cards

About MyRatePlan:

MyRatePlan.com is a leading comparison site that allows users to compare credit cards, mobile phones, cell phone plans, and more. MyRatePlan was founded in 1999 to help users find the best recommendations for them based on innovative and proprietary tools and customer input.

UC hosts Market Madness program, educates kids on finances

by Shelton on May 29th, 2014

filed under Finances

Sixth-graders Laura Howard and Arianna Jackson described their experiences as “really cool” and “interesting.”

Watch this story

As part of the program 700 students, grades third through sixth, got an opportunity to manage money, products and positions.

I was a manager and so I ran my own business with rubber bands, and so that sold a lot of business. Well, some people ended up trying to steal them, but we chased them down. Thats how big they were,” Jackson said.

Jackson’s rubber bands were not the only popular products at the program. Reds key chains were so popular they sold out. Teacher Donna Quatromani was surprised by how early the key chains flew off the shelves.

We did sell out; even before the reduced price time came. And $50 is a pretty good amount to ask for one item. And we have people who come back every year to buy them,” Quatromani said.

You might be surprised to learn that the Tri State ranks pretty low in financial literacy and the application of those finances.

Administrators at UC said the time to change that is now.

Director of the UC Economics Center Julie Heath said the earlier the better.

Its not going to happen unless we start with kids like this, because financial literacy isnt a vocabulary list, Heath said.

In fact, Heath said, for these children financial literacy is about learning how to make good decisions. Its a combination of action and application.

Heath has a big goal in mind when planning for next year’s event.

If we could have a panel of those famous entrepreneurs, Cincinnati owners and risk takers and have them judge these kids,” Heath said.

The call to action has been made and these kids are hoping tri state entrepreneurs will answer.


MetLife Finances London Student Housing Acquisition for US Buyer Greystar

by Shelton on May 29th, 2014

filed under Finances

New York-based life insurance lender MetLife provided a £122.8 million ($206 million) senior debt financing package to an affiliate of Greystar Real Estate Partners to acquire a portfolio of student housing properties in London, Mortgage Observer has first learned.

Laxfield Capital, a commercial mortgage investment manager in the UK, arranged the long-term financing from MetLife on behalf of the Charleston, SC-based apartment and student-housing operator. MetLife declined to provide the term and rate of the debt.

Your credit score is your passport to money

by Shelton on May 28th, 2014

filed under Credit Scores

Most credit scores run in the range of 301 to 850. Within that range, there are different categories, from bad to excellent. Various lenders may have different criteria and they may change.

Credit scores are computed based on mathematical models that analyze information in your credit reports. Credit scores compare factors such as payment history, debt levels and the age of credit accounts to figure out what consumers who pay their bills on time have in common. The goal is to predict how new and existing customers will handle credit. Here are typical ranges:

  • Excellent Credit: 750+
  • Good Credit: 700-749
  • Fair Credit: 650-699
  • Poor Credit: 600-649
  • Bad Credit: 599 and below

Read MoreSavvy widows can lead transformed lives

There are some best practices you can follow to maintain a high credit score:

  • Pay all of your bills on time.
  • Keep the balances of your credit cards at 20 percent of the available credit or less. This refers to the credit utilization ratio–the lower, the better.
  • Apply for new credit in moderation; you dont want lenders to think youre credit-hungry.
  • Keep a healthy mix of credit – revolving, installment and mortgage.
  • Think twice about closing credit cards with high limits or with good payment history. This may eliminate part of your history and increase your credit utilization ratio.

How Student Financial Accounts Change After Graduation

by Shelton on May 28th, 2014

filed under Student Credit Cards

As college students graduate and prepare to take on the responsibility of adult life, they’ll need to worry about how their financial accounts – specifically, student checking accounts, credit cards and loans – will change after they lose their “college student” status.

Most student-labeled accounts carry certain privileges, which may disappear after college grads transition to non-student accounts. Knowing how financial accounts change after graduation can help you avoid fees, save money and get a head start on tackling college debt.

Student checking accounts “grow up.”

At most of the nation’s largest banks, a basic checking account comes with a monthly fee that can usually be avoided with a minimum balance or direct deposit. Fortunately, many banks provide student checking accounts that have no monthly maintenance costs.

There are rules, however, that force the conversion of a student checking account into a traditional checking account, so college students can’t expect to avoid monthly fees forever. The date that a student checking account expires can vary from bank to bank.

For instance, Chase’s College Checking account becomes a regular checking account after five years from the date the account was opened. Meanwhile, BBamp;T’s Student Banking account will automatically convert to a regular account on the customer’s 24th birthday or 60 days following graduation (whichever is last).

Depending on student checking account rules, college graduates may be able to continue enjoying a free checking account even though they are no longer students. In the case of Chase, for example, someone can still use a student checking account for one year without monthly fees if he or she graduates college within four years.

Student credit cards don’t change much.

Credit card issuers tend to offer student versions of their regular credit cards. Basically, a student credit card often carries the same features, such as rewards and card protection, as the non-student version of the card.

There are three major differences with a student credit card: the interest rate, credit limit and qualification requirements.

Compared to a regular credit card, student credit cards have higher APRs and smaller credit limits since students are considered higher-risk borrowers. When applying for a student credit card, issuers often ask for proof of income or a co-signer.

After securing a reliable source of income, college grads should request an APR reduction and a credit line increase. Know that the credit card issuer may ask for your income and pull your credit report before addressing your request.

College grads can also ask that their student credit card be converted to another credit card offered by the same issuer.

Student loans enter repayment period.

Student loan debt is likely a major concern around graduation, as education loan servicers typically begin to send out notices of repayment in the weeks before a student’s expected graduation date.

Direct Loans and Federal Stafford Loans have a six-month grace period before payments are due. PLUS loans have no grace period, so payments are due right after graduation. For private loans, lenders may have varying repayment policies.

Those who are able get a job after graduation should begin to make repayments. Typically, graduates can make bigger or extra payments to reduce the interest paid and the total cost of the loan – a more aggressive approach for anyone who doesn’t want to hold onto student loans for decades to come.

Graduates who have a tough time repaying loans should contact their loan servicers to ask about other repayment plans, including deferment, forbearance or an income-based plan.