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RISMEDIA, August 21, 2010--People are having to make tough financial choices today, but many don't have to wreck their credit scores if they know how the system works, according to credit expert Eddie Johansson, president of Credit Security Group.
"With the same amount of money, you can make decisions that kill your credit score or ones that keep your score - or at least give you the ability to rebuild your score quickly later," he said. "Most people have wrong or little information about how the system works, and that's a big reason scores go down when difficult decisions are made during a recession."
Johansson advises major financial institutions and consumers on the FICO credit score model used by most lenders in deciding the borrower's risk and interest rate. He described three common misconceptions that needlessly lower credit scores.
Misconception #1: Paying late didn't hurting my credit since I'm caught up now.
Johansson said recent late payments are the credit score killers he sees most often. "It's great that you caught up," he said, "but it doesn't change the fact that you paid late. Anything other than 'paid as agreed' on accounts on your credit report hurts your score."
Misconception #2: Dollar Amounts Matter in Credit Scores.
An example of bad credit score advice here is "pay the highest bill first," Johansson said. "Dollar amounts don't matter in FICO scoring; ratios and recency do. The effect on your score is the same for a $1 late payment as a $1,000 late payment. The fewer late payments on your credit report, the higher your score - regardless of their dollar amounts," he said.
Johansson emphasized the importance of paying all your bills on time, every time. However, he says that if you must pay late and want to avoid damage to your score, pay the accounts that report to credit bureaus first. You can find this information by getting a copy of your credit report.
Misconception #3: Closing Credit Card Accounts Helps Your Score.
If you cancel a card, you may have just thrown away your chance to increase your score by continuing to build on years of positive credit. "Very long term positive account history can really boost your score," Johansson said. "It's best for your score to keep cards open and active, using them for small purchases. Next best is to just keep them open so you can build your score back up quickly by using them later."
Don't Make a Bad Situation Worse.
In tough economic times, people often buy more on credit than they usually would. The amount they pay in interest on these purchases is largely determined by their credit scores. Poor decisions that lower scores combined with an already tight budget can be very costly, making money problems worse than they have to be. "What we're trying to do," Johansson said, "is help people get through these tough times with as little financial damage as possible. This is best for them, for lenders and for our economy."
Johansson emphasized that lower credit scores may be unavoidable for some, and that credit scores are not the only factor to consider. "However," he said, "good credit is an important part of financial security and must be considered when making the best long-term decisions. Having the right information is necessary to make good choices - now more than ever."
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Does anyone out there have a power washer? I am thinking about buying one........any thoughts on goods models to consider, units to stay away from, Things to use it for, etc., would be appreciated! Thanks in advance.....
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• 2,051 sq. ft., 2 bath, 4 bdrm 1 1/2 story -  MLS®$184,900 - Barn & Outbuildings Lowpoint, Metamora - Your own country estate with 3.6 beautiful acres, a 4 bedroom house, a great barn plus other outbuildings. Home feautures large eat-in kitchen, spacious formal dining room with hardwood floors, living room, office/bonus area with bay window, 4 bedrooms with hardwood floors, 1.5 baths and full basement. Covered porch/patio. Additional 1.5 acres are availabale at additional cost - will be surveyed prior to closing. Beautiful country setting with numerous trees. 1 car garage with adjoining workshop, large barn, plus 3 other outbuildings. Property information
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RISMEDIA, August 21, 2010--As the U.S. housing market struggles to rebound, many homeowners are stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate for a new job opportunity, want to downsize or simply want to buy a new place have left homes empty. Vacant or unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by their insurance, according to the National Association of Insurance Commissioners (NAIC).
The Pending Home Sales Index, released today by the National Association of Realtors, dropped 2.6 percent to 75.7 based on contracts signed in June from 77.7 in May, and is 18.6 percent below June 2009 - another sign of the stagnant housing market.
"In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market," said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. "Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy."
The Added Risks of Vacant Homes
Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for neglect or property abandonment on a home left vacant or unoccupied for a specified number of consecutive days.
In insurance terms, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain.
Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include:
-- Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around - unkempt lawn, full mailbox, no lights on - that can tip off burglars to an easy target.
-- No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem - such as a small electrical fire - can turn into a much larger, more costly disaster.
-- Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there.
Keeping A Vacant Home Properly Insured
The definition of vacancy and unoccupancy can vary from policy to policy. Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied.
Many homeowners policies have a "vacancy clause" that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss.
"Before you decide to leave a home vacant or unoccupied for a long period of time, talk to your insurance agent or company to learn how they define vacancy and unoccupancy, and whether the company will pay claims if a house is unoccupied," said Cline. "Be honest about your situation, because while an extra policy might cost more, it could save you money down the road should there be an accident or damage to the home."
Many insurance companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Vacancy policies can also be purchased for different term lengths to cover a few months to a year, depending on the need.
The cost of vacancy coverage depends on the company and state in which the property is located, but costs usually are higher than a typical homeowners policy due to the overall increase in risk.
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Do you have questions on how property taxes are determined? Do you think your taxes reflect a higher value than the actual market value? Do you think your property may not be fairly assessed compared to similar properties in your neighborhood? Have you ever wondered how to appeal your property taxes? Want to learn more about when and if you should file an appeal? The Peoria Area Association of REALTORS® will be hosting 2 FREE seminars to discuss these questions and review the appeal process. Here are the details: When: Wednesday, August 25, 2010 6:00PM-7:00PM Thursday, September 2, 2010 6:00PM-7:00 PM Where: Peoria Area Association of REALTORS® 7307 Willowlake Ct., Peoria IL 61614 (corner of Willow Knolls, 1 block west of Peoria Academy) Reservations requested 688-8591
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Those of you who live in the Metamora area take note: Heartland Bank will be hosting a Shred Day at their Metamora facility this Saturday, August 21, from 9:00 to noon. They will be providing an industrial grade shredder for the public to use in safely disposing of financial and other sensitive documents. This is a great opportunity for you to safely get rid of old checks, tax records, etc. See you there!!
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Williamsburg Estates, Peoria - We invite everyone to visit our open house at 3310 W Gloucester on August 22 from 2:00 PM to 4:00 PM. Property information
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Comfortable 2 Story on Large Corner Lot! • 1,533 sq. ft., 1 bath, 3 bdrm 2 story - MLS®$74,900 - Across from Park Minonk, Woodford County - Comfortable 3 BR, 2 story on a large corner lot across from park! Cute eat-in kitchen with breakfast bar, tile countertop, and large window above the sink. Living room has french doors leading to den/office. Main floor master bedroom and main floor laundry. 2 bedrooms upstairs plus bonus room. Detached 2 car garage. Park across street with playground, pavilion, tennis & basketball courts and ball fields. Off of I-39, exit 27. Convienent to Peoria, Bloomington-Normal, and Lasalle-Peru. Property information
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A little publicized provision of the Homebuyer Tax Credit makes it available to members of the military and certain other certain other federal employees. I quote here from the article on the IRS web site: "Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010." To read the entire article here is the URL: http://www.irs.gov/newsroom/article/0,,id=215594,00.html If you know of someone that might qualify for this, please send them my way!
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Williamsburg Estates, Peoria - Announcing a price reduction on 3310 W Gloucester, a 2,700 sq. ft., 4 bath, 4 bdrm 2 story. Now MLS®$269,900 - Private Wooded Lot. Property information
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Comfortable 3 BDRM ranch in Metamora! • 1,662 sq. ft., 2 bath, 3 bdrm ranch - MLS®$164,900 - Great location! Metamora, Woodford County - Comfortable 3 BDR ranch in great location near Metamora High School and new golf course. Hardwood floors. New roof in 2007. New carpet and paint. Shower and kitchen in basement. Appliances working but not warranted. Reserved: Valances in nursery. Property information
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Does it seem as if the things in your garage multiply almost overnight? For most people cleaning their garage is an onerous task. Here are some effective tips for gaining space to actually park your car. * Gather all items you're not using and have a garage sale, donate the items to charity or take them to the dump. * Dust the walls and corners; get rid of the spider webs. * Hang heavy-duty wall hooks for larger items like yard tools, bicycles or exercise equipment that are taking up floor space. * If you don’t have shelves, consider buying adjustable steel shelves on wheels available at warehouse stores. * Get boxes and other items off the garage floor. * Clean the floor and remove oil drips with cat litter and Simple Green detergent. * Make sure all flammable materials, tools and toxic chemicals are stored out of reach of children. * Check your garage door to make sure the opener is working properly in reverse. Keeping your garage clutter-free and clean will allow you to have useful storage and workshop space. While your garage usually won't make or break a deal when you decide to sell your home, a clean, well-maintained garage may be a tie-breaker by enhancing an overall impression of a well-cared-for home. Please call or send me an email if you'd like some additional real estate tips or neighborhood information.
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By Dan Serra
RISMEDIA, August 3, 2010--(MCT)--With banks tightening their grip on loans, getting one is requiring more work and vigilance on the borrower's part. Even people with excellent credit are jumping through hoops to verify everything and avoiding nicks that could give the appearance of being a risky borrower. There are a few strategies to employ that could improve the chances of not only getting a loan but getting a better rate.
One of the obvious ones, beyond paying bills on time, is to not be overextended on credit. Lenders look at how credit is managed, so someone with $10,000 credit limit but owes $9,000 won't appear as good a borrower as someone who owes only $1,000 of the $10,000 limit. Therefore, it is important to pay down credit before applying for a loan. This can help raise your credit score and get a better rate.
When you do pay down the debt, such as on a credit card, keep the account open to show lenders you have a long credit history and you are responsible by not maxing out every loan you get. Be wary, however, of some creditors who have started reducing credit limits as amounts are paid off. You may need to ask for the limit to be raised, or switch to a new credit card.
Next, verify your credit score every year, or right before you apply for a large loan such as a mortgage, to make sure there is nothing on the report that is inaccurate. While other credit report requests could harm your score, because it indicates you are looking for help often, requesting your own report does no damage to your record. There are three credit bureaus that maintain reports. Request them all through www.annualcreditreport.com. Reports are free once a year. Nearly eight in 10 reports have an error, according to the U.S. Public Interest Research Groups. Be wary of firms that offer free credit reports only after you sign up for another service with a monthly fee.
If you do see a mistake, follow the instructions to dispute the charge. If the mistake was caused by a certain circumstance you feel was not common, also dispute it.
The importance of good credit in our changing economy cannot be overemphasized. Those neglecting their credit are positioning themselves to be shut out of the economy, and at risk of not having a lifeline when times are tough. In addition, those with poor credit also face higher expenses as interest rates, insurance premiums, and rental rates can be higher for those without excellent credit, not to mention employers may shun applicants that do not demonstrate responsible money management.
Make it a point to audit your credit at least once a year and make managing it a priority in your life. Doing so will eliminate chances of financial disasters.
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Madison Manor, West Peoria - Announcing a price reduction on 117 N Kickapoo Terrace, a 2,322 sq. ft., 3 bath, 4 bdrm ranch. Now MLS®$169,900 - 4 Spacious Bedrooms. Property information
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The economy is stabilizing. Home prices are holding. It's not just as good a time as ever to buy a house. It's one of the best times ever.
RISMEDIA presents five overlooked reasons why now is a great time to buy a house.
1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.
2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.
3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.
4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines...again. Now that appraisers have more flexibility to set values that reflect the current market, today's deals will make it over the finish line.
5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by "workforce housing" programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.
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