Credit Score: Do Something Before It's Too Late

Making sure you have a good credit score is more important today than ever before.  Not only is it crucial to helping you get the best interest rates possible when applying for any type of loan, it could mean the difference as to whether you can even find a job, if you're looking for one.

More and more, employers are now pulling your credit report to determine your risk. Typically people with good credit are not going to steal; they seem to have their life in order, etc. 

So if you have had some bumps and bruises on your credit report, now is the time to get a recent copy of your free credit report and start working on your credit.  Here are some areas you need to focus on to increase your FICO score.

If you have credit cards, make sure they are current.  Late or past due credit is a killer on your credit score.  And focus on trying to get your available credit limit versus your balances under 60%.  If you have a bunch of credit cards and they are all maxed out, your credit score will be low.

If you have any collections on your credit, you must get them paid off.  Until you do, your credit score will suffer significantly.  Collections will stay on your credit report for 7 years and will not just go away.  The quickest way to get your credit score up is by paying off collections.

The banking industry will never be same again because of the amount of mortgage foreclosures.  The lending industry is tightening so much currently that families with good credit could have problems getting loans. So make sure it's not too late, if you are getting ready to make a big purchase like a new home, make sure your credit is in line with today's times.

Borrowing money is only going to get tougher. So instead of being told NO when you apply, learn how to get a YES by getting your FICO score as high as you possibly can.

Cooling Bills: Cutting Costs This Summer

Air conditioning is an expensive way to stay cool, but there are ways to chill your house without burning up your bank account. Money editor Stacy Johnson takes a look at a few ways in this short video (runs 1:41).

Reverse Mortgages: Older Homeowners Cautioned

The Financial Industry Regulatory Authority urged homeowners over the age of 60 to carefully weigh their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years.

The group, formed by a merger of the NASD and some regulatory functions of New York Stock Exchange parent NYSE Group Inc., warned that a reverse mortgage — an interest-bearing loan secured by the equity in a home — can jeopardize their financial futures.

With a reverse mortgage, a bank makes payments to a homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out or dies. Reverse mortgages have high fees — typically about 7% of the home's value — and they make it difficult for homeowners to leave the property to their heirs.

The warning notes that, in some cases, those who sell the mortgages may profit from the their sale, giving them twice the incentive to talk someone into a loan they may not need.

Reverse mortgages were originally designed as a tool for aging, low-income homeowners to keep their homes, but they have been used more often by retiring Americans as a way to finance a more-extravagant retirement lifestyle than they could otherwise afford.

Still, as foreclosure rates continue to rise amid the subprime-mortgage crisis, some homeowners who have built up equity in their home may consider reverse mortgages their best option against losing it.

We don't advocate anyone taking out a reverse mortgage… but welcome your thoughts and opinions on it.  Just use the comment link below to tell us what you think about Reverse Mortgages.  Your email address, although required in order to post, will never be published on this site.

Housing Market Woes: Is Washington Doing Enough?

With the news continuing to be bleak (at best) around the housing market, the question is, are interest rate cuts and tax rebates enough, or should Washington be doing more to actively intervene in the struggling housing market?

The U.S. House of Representatives Financial Services Committee recently approved a sweeping bill to enable the government to finance $300 billion in distressed mortgages with the aim of helping two million homeowners.

The latest interest rate cut by the Fed took the cost of borrowing to 2.0 percent, its lowest since December 2004.

Meanwhile President Bush has signed into law a $150 billion economic stimulus package designed to spur the ailing economy by giving tax rebates to millions of Americans.

But is all this enough?  Should (or could) Washington be doing more to help?  We'd love to hear your opinion.  Click the comment link below and give us your feedback.  Your email address (although required to post a comment) will never be published here, so go ahead, sound off.  We know you want to.

Foreclosures Causing More Divorces?

The financial pressure that comes with an escalating house payment or a foreclosure may indeed be playing a role in breaking up marriages, experts say.

Historically, the three most likely reasons for foreclosure problems are: loss of job, loss of health and loss of spouse. On top of that, these days, escalating mortgage payments seem to be exacerbating the divorce problem.

Though there are no studies linking foreclosure to divorce rates, Frank Fincham, the director of Florida State University's Family Institute, said, "Financial problems among couples are one of the main reasons for divorce in this country today."  One recent poll commissioned by divorce360.com ranked financial issues as the No. 2 reason that Americans divorce, with abuse ranked as No. 1.

For years, Middle America was of the mindset that it could get a divorce and use the equity in their home as a safety net, but for many these days, there is no equity. It used to be, when couples bought a house, five years later it was worth more. And when people got divorced in those days they expected to be able to live for a while off the proceeds from the sale of the house. . . . We do have a lot of people in trouble in this country because the value of their house decreased.

What do you think?  Give us your opinion.  Has the mortgage crisis and more resulting foreclosures, had anything to do with an increase in divorce rates?  Use the comment link below to give us your feedback.