July 1st, 2010
5 Step Check-Up On Your Finances
Today, new legislation regarding debit cards kicks in and customers now have to opt-in and agree to overdraft policies rather than be automatically enrolled in the bank’s program. This is a good reminder to check your own bank’s overdraft policies and, if you want to be covered by overdraft, to enroll in it now.
We put together a short list of other financial areas in need of a check-up, just to keep up with the changing landscape of money and banking. If you find yourself spending more time thinking through any of these points, it’s a good indication you need to delve a little deeper and focus on that aspect of your finances. Now, get ready to start checking off:
June 29th, 2010
More Credit Score Help At The Credit Advice Center
Guess which question is heard most often around the water cooler at the Credit Advice Center.
“How do I improve my credit score?”
This question pops up frequently because the Credit Advice Center is becoming a real community forum for discussions around the topic of credit, especially the mystery surrounding credit scores. So, we will be bringing you even more credit score and credit advice posts here at the blog, so stay tuned…
In the meanwhile, consumers at the Credit Advice Center are helping each other navigate these tricky financial issues. Check out the conversations buzzing at the Credit Advice Center right now:
May 14th, 2010
Need A Loan? On Deck Capital Looks At Cash Flow, NOT Credit Score
Recognizing how today’s tight lending standards can crush a small business’s chance for a loan, On Deck Capital steps into the gauntlet of big banks and large lenders to provide an alternative business loan solution which evaluates creditworthiness according to cash flow rather than credit scores.May 6th, 2010
Bank of America Introduces Interactive Home Loan Guide
With Spring as prime time for prospective home buyers to hunt for their dream home, Bank of America’s new Home Loan Guide takes the guesswork out of how to choose the right home, prepare to buy, and pick a mortgage.April 28th, 2010
Do You Know Your Bank’s Overdraft Policy?
Have you noticed significant changes to your bank’s overdraft policy recently? This July, new regulations are ending the common banking practice of automatically enrolling customers in getoverdraft policies that have long been under fire for steep fees and lack of transparency. Soon, customers will have to intentionally enroll in overdraft policies in order for the bank to cover them in the case of insufficient funds on their checking account.
It’s a step in the right direction to put the power of banking in the consumer’s hands. Know and understand your bank’s policies; some customers want overdraft protection so their card won’t get declined, especially in the case of an emergency purchase. Other customers don’t want to be charged a $35 overdraft fee for overdrawing on a $3 cup of coffee.
April 15th, 2010
Zero Down Payment On A Home Mortgage!
If you are an employee (uniformed, civilian, or retired) of the Department of Defense, or are a family member of someone who is, you may qualify for a no-down payment mortgage from the Navy Federal Credit Union. A down payment, typically 20% of the house’s value, is often the biggest hurdle first-time homebuyers have to face. Navy FCU’s zero-down payment home loan is a remarkable offer in a shaky housing market still battling widespread foreclosures and depreciating home values.
Titled the HomeBuyers Choice Mortgage, Navy FCU is offering 15- or 30-year fixed rate loans with zero-down for homes up to $650,000, as well as refinancing options available for up to 97% of home’s value. Other criteria for eligibility include good credit, full documentation of finances, and total debt-to-income ratio ceiling of 41%.
April 7th, 2010
Revamped Federal Loan Program Is Good News For College Students
College students get a break from Uncle Sam with a revamped federal student loan program to kick-off July 1st. As part of the historical healthcare bill passed in March, the program will streamline the federally-backed loan program and aid borrowers to make higher education more affordable for low-income families.
Whereas federal student loans have previously provided by both private lenders and the federal government, all federal student loans will now be funded direct by the government’s Direct Loan program. This removes the $61 billion student loan program that subsidized loans from private lenders, meaning the banking industry will feel these changes the most in billions of dollars lost in federal subsidies and kickbacks. The Direct Loan program has a smoother origination process, decreasing borrowers’ confusion over loans by streamlining the loan process and standardizing it across schools: your school determines the amount you are eligible for, sends you the master promissory note, and you sign it.
April 1st, 2010
Bank of America Helps Troubled Borrowers With Underwater Homes
Bank of America extends a hand to homeowners drowning in mortgage payments on underwater homes with a loan forgiveness program that could cut the principal owed as much as 30 percent. This is a step in the right direction after BofA’s embarrassing repossession of a woman’s home and parrot. President Obama’s “Making Home Affordable” program set in motion last year didn’t help as many borrowers as hoped. With this BofA announcement, as many as 45,000 homeowners may get mortgage relief with an average savings of more than $60,000 per loan.
March 3rd, 2010
Review: Prosper’s Talk About The Taboo Campaign
If people will divulge the ups and downs of their love life via Facebook and Tweet about their breakfast, Prosper’s Talk About The Taboo campaign hopes America will be as eager to open up and talk about what’s in their wallets.
Prosper, a peer-to-peer lending site, boldly goes where financial companies haven’t ventured before to bring taboo topics about personal finance into consumers’ everyday conversations.
January 27th, 2010
Dear Credit Karma – Credit Inquiries
Dear Credit Karma,
My son is co-signer on a loan for his car at my bank, yet he still shows no credit history available; why is this so?
Co-signing for a loan should show up as an entry on your son’s credit report, so double-check whether it has been accurately reported to the credit bureaus by looking at his Credit Report Card and also by requesting a free credit report at Annual Credit Report. A more robust credit history will help in earning a great credit score, so make sure your son is benefiting from having this loan on his record.
Once you are sure the loan is not accounted for in his credit report, contact your bank and alert them that your son’s co-signer status for the loan was not reported to the credit bureaus. Request to have this error rectified immediately. Follow up in two or three weeks by taking a look at your son’s credit report via his Credit Report Card or Annual Credit Report to make sure the loan has been added to his history—if the loan is in good standing, adding it to his credit history should also boost his credit score.
Dear Credit Karma,
If I apply to rent an apartment and did this on 5 different properties before deciding, how much will it lower my credit score assuming the apartment owners will do a credit inquiry per their advertisement of “on approved credit”?
The impact of these credit inquiries on your credit score will depend on how each apartment owner will generate the credit check. If they request a soft inquiry, as is the case with “pre-approved” credit cards, and other self-initiated credit report pulls like with Credit Karma, it will not affect your credit score. If they use a hard inquiry, it will lower your credit score by a few points and remain on your credit report for 2 years. But be leery that if you allow all five owners to do a hard inquiry, these inquiries will certainly add up in damage to your credit score.
Check out the graph of the distribution of credit score to number of credit inquiries from the Credit Karma community for a sense of how many hard inquiries can impact your credit score. In addition to hurting your score, multiple inquiries on your report may also affect your future loan, mortgage, or credit applications because lenders may view you as a high-risk borrower. There is a possible silver lining: if the apartment owners do conduct hard inquiries, some credit scoring models have been adjusted to count multiple hard inquiries within a 14-day period as a single inquiry.
Ask each landlord what type of credit check they will be doing. If they are planning to do a hard credit inquiry, suggest that you pull your own credit report, such as the one from Annual Credit Report, and take it with you to each apartment owner to minimize the number of hard inquiries on your report. If some apartment owners have already done hard inquiries on your report, you won’t be able to remove the negative impact. But take heart; the damage to your score will fade over time. In the future, be aware of what type of credit checks are being done on your credit report and avoid multiple inquiries in a short period of time; otherwise, happy apartment hunting!
Submit a question now, and maybe Credit Karma will answer your question on our next Q & A blog post!
