This may come as a surprise, but you dont need a perfect credit score to buy a home or get a mortgage.
In some cases, your credit just needs to be sufficient. Good, bad, ugly or indifferent, as long as your credit score matches the criteria of the mortgage size and property type you are looking for, you may be able to get financing.
Heres a quick cheat sheet of the top three most commons mortgages and their basic credit score requirements.
- Conventional loans. You generally need a credit score of 620. However, anyone with a 620-679 credit score should expect to pay higher interest rates and fees.
Think you know the ins and outs of credit cards? Take this quiz, recently administered to more than 800 college students.
1.Assuming the following individuals have the same credit card with the same interest rate, who will pay the most interest on their purchases over time?
a. Joe, who makes the minimum payment on his credit card bill every month?
b. Jane, who pay the balance on her credit card in full every month?
c.. Joyce, who sometimes pays the minimum, sometimes less than the minimum, and missed one payment on her credit card bill?
d. All of them will pay the same amount.
2. Imagine there are two options when it comes to paying back a loan and both come with the same interest rate. Which option would you select to minimize your total costs over the life of the loan?
a. Option 1 allows you to take 10 years to pay back the loan.
b. Option 2 allows you to take 20 years to pay back the loan.
c. Both options have the same out-of-pocket cost over the life of the loan.
3. Suppose you had $100 in a savings account, earning 2 percent per year. After five years, how much would you have in the account, if you left the money in to grow?
a. More than $102.
b. Exactly $102.
c. Less than $102.
d. Not sure.
The answers: 1.c; 2. a; 3. a.
By and large, the college students around the country who took this quiz last December graded poorly — fewer than half knew the answer to question 1, about 60 percent correctly answered question 2, while 75 percent nailed question 3.
I’d wager that many adults didn’t move to the head of the class either.
Sallie Mae, the student loan and financial services company, administered this quiz to gauge college students’ understanding of credit. It was part of a study, released this month, by Sallie Mae and the Ipsos research firm on how college students manage their finances.
While most of the surveyed students use debit cards to pay for their purchases, more than half also carry credit cards. And the good news is that they seem to be using credit responsibly.
For example, more than 60 percent of the students pay their credit card balance in full every month, nearly 70 percent keep their average monthly credit card balance under $500, and 73 percent pay their bill with their own money rather than relying on their parents.
But here’s the kicker: The report noted that these positive financial behaviors “mask an underlying gap in college students’ knowledge about the detailed workings of credit.”
That shortcoming could come back to bite them someday.
What accounts for the gap? The research report doesn’t really address why it exists, but “I think it’s safe to say that more education and a deeper understanding of how credit works would be helpful,” said Rick Castellano, a Sallie Mae spokesman.
To be sure, a required high school or college personal finance course would help, and the survey noted that the vast majority of students are eager to learn.
But parents have a role too, especially since the survey pointed out that students lean heavily on their elders for money management advice.
It’s not enough to simply hand over plastic to your 20-year-old. You should also go over the fine print, especially penalties, fees, and the chart on the monthly billing statement that shows how much interest will be owed by just paying the minimum each month.
Two other rules of thumb that may correct some flawed thinking: Don’t use a credit card to pay for food, drink or anything else that will be consumed before the monthly statement arrives. And secondly, don’t consider the spending limit on your credit card to be an extension of your income.
For more credit tips, check out the “Guide to Understanding Credit,” produced jointly by Sallie Mae and FICO credit scoring organization.
The man who finally broke the code of silence to point police in the direction of Kale Gabriel as the killer of Ryan White has collected a $150,000 reward.
The case was sent to the Rewards for Major Unsolved Crimes Program in July 2012, according to a Justice department news release.
A year later, the program got a phone tip that helped convict Gabriel of second-degree murder. Gabriel said he had no intention of killing Ryan White, but that his gun went off accidentally in a struggle.
- Code of silence: Murder victims mother thanks those who risked all to talk
White was shot on July 22, 2010, and died later in hospital.
Gabriel was given a life sentence Feb. 18.
This is the second time the program has paid the maximum reward of $150,000.
My heart goes out to Mr. Whites family and loved ones, and I hope this conviction has given them some closure, Justice Minister Diana Whalen said in a news release.
The information we received through the rewards program was critical in solving this case, and I thank the individual who came forward for their bravery.
The Major Unsolved Crime Program began in 2006. Rewards of up to $150,000 are paid upon conviction.
Halifax Regional Police Supt. Jim Perrin said the program is working.
The valuable information received has helped to solve a number of investigations, eased community concerns and, most importantly, provided victims families with some measure of comfort, he said in a news release.
But he also referenced whats commonly referred to as the code of silence that exists in many communities which keeps some crimes from being solved.
In the majority of unsolved homicides, we know there are people in our community who have information that could assist in putting those responsible before the courts. We hope that the success of the rewards program to date will encourage more people with information in unsolved homicides to do the right thing and come forward.
In 2014, $150,000 was paid to an informant who helped solve the three-year-old murder of Melissa Peacock. Dustin and Joshua Preeper were convicted, in part based on information from the tipster. Both are serving life sentences.
Police also credit tips for successful prosecutions in the murders of Kevin Bowser and Narico Downey.
The credit score system, developed by the Fair Isaac Corporation, is commonly referred to as a FICO score. The score is a number between 300 and 850 that helps lenders calculate an individuals credit-worthiness and risk. BBB reminds consumers that when it comes to credit scores, it’s important to use a great deal of care as one slip up can cause damage for years to come.
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Boston police are crediting anonymous tips for helping them to track down a man wanted in connection with a shooting in Brighton two weeks ago that left an Allston man dead.
Gammada Musa, 25, of Brighton, is accused of shooting and killing Desmond Joseph, 30, on Oct. 22.
Musa was arrested in New Bedford on Friday thanks to anonymous tips, police said.
In addition to thanking my investigators, I want to especially acknowledge and thank the community members who supplied the anonymous tips that ultimately led to the capture of Gammada Musa, said police commissioner William Evans. Thanks to the communitys help and belief in the idea that our city can be a safer place when we all work together, a dangerous felon is off the streets and in police custody.
Musa allegedly shot Joseph multiple times just before midnight on Telford Street in Brighton.
Police asked the public for help in locating Musa on Oct. 27, releasing his photo and saying he was armed and dangerous.
Weve been seeking him since then, said Boston police spokesman Stephen McNulty.
Musa is set to be arraigned on a murder charge Monday in Brighton District Court.
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MONTREAL — Five suspects are in custody in connection with the theft of about $10-million worth of silver last Friday from the Port of Montreal.
The men were arrested during a series of police raids in the citys suburbs late Wednesday and early Thursday.
Montreal police spokesman Manuel Couture says the suspects are aged between 35 and 53 and face multiple charges, including theft over $5,000 and conspiracy.
Police said thieves had stolen a truck in the citys west end, drove it to the port and loaded a shipping container onto it.
The container, which held up to $10-million dollars in silver, was found empty on Saturday in Repentigny just outside Montreal.
Investigators credit tips from the public in helping move the case forward. Police have not yet indicated if any of the stolen silver was recovered in the raids. (CJAD)
(Photo Credit: DonkeyHotey/Flickr)
PayScale: Whats the biggest misconception students have before they take out their first student loan?
Anne Del Plato: Student loans have become so prevalent that students often look at them as just another type of financial aid, but there is an important difference: student loans must be paid back. Before taking out any kind of loan, students should fully understand that loans will need to be paid back after they leave school. It is also important to know about the types of education loans, the terms of those loans, and the options available. When estimating the total amount you may need to borrow, consider your entire educational program. To get a general idea of what your monthly loan payment may be, Federal Student Aid provides an easy-to-use repayment calculator.
PayScale: How can students determine how much debt is too much debt?
Anne Del Plato: For most students who take out loans to pay for college, the investment will pay off. Studies show that college graduates earn 70 percent more than those with just a high school degree. (Source: Current Population Survey, US Department of Labor, US Bureau of Labor Statistics.) Responsible borrowing can be a good investment in ones future. Students should try to limit borrowing to only what is needed and avoid unnecessary credit card debt. An important factor for students to think about is how their expected earnings after graduation compare to their student loan debt. Planning ahead pays off. This income-to-debt calculator can provide a good idea of whats to come.
PayScale: Which loan options do students typically overlook?
Anne Del Plato: Students should first consider all the scholarships, grants, and work-study for which they qualify. As far as loans, students should first borrow through the federal student loan programs. To assure consideration for all types of financial aid, including federal student loans, students must complete a Free Application for Federal Student Aid (FAFSA). The aid is determined by the colleges financial aid office.
Private loans may be a viable option if additional funds are needed. The current market conditions create competitive interest rates and many programs offer no origination fees. Private loans are provided by banks, credit unions, and other financial institutions, and a cosigner is frequently required.
There are also loan options at repayment that borrowers may overlook. When borrowers leave school, they can consider consolidating their federal loans or refinancing all education loans into a new private loan. Benefits can include extending the repayment term and simplifying repayment by combining multiple loans into one new loan. Loan refinancing may reduce interest rates, but that depends on the borrowers and/or cosigners credit qualifications. [Note: Students should also pay attention to whether private loans have a fixed or variable interest rate, which can add up to more money over the life of the loan. -Ed.] Students should research their options first. Loan consolidation or private loan refinancing is not the best choice for everyone.
PayScale: What can students do if something changes? (For example, if their school offered them a lot of money freshman year, but cuts their funding for subsequent years.)
Anne Del Plato: Generally, if a students situation remains similar, colleges work to be consistent in awarding aid. Students should ask themselves:
- Has my familys financial situation changed? If income goes down, family size increases, or other significant changes have occurred since the period reflected on the FAFSA, students should notify the financial aid office and complete any required supplemental forms.
- Did I meet FAFSA deadlines? Students may receive less aid if they miss required application deadlines, so its essential to submit the FAFSA on time, even if income must be estimated.
- Is some of my aid performance-based? Some grants and scholarships may be based on achieving a specific Grade Point Average (GPA) or other performance criteria outlined on the original award notification. At minimum, most aid requires that a student makes Satisfactory Academic Progress toward their degree. Financial aid offices at colleges are a great resource.
As indicated in the previous question, if a student needs additional funds to pay for college after all aid is awarded, he or she may want to consider other sources, such as a private loan.
PayScale: What should graduating seniors do to make sure theyre financially prepared for life after college?
Anne Del Plato: All loans – federal and private – have servicers assigned to them. Loan servicing organizations provide information and assistance to borrowers, and are responsible for billing and collecting loan payments. Graduating seniors often need help with navigating the world of personal finance and student loans. Student loan servicers are fully versed in this area and can also offer financial literacy resources, such as budgeting and credit tips, to help you stay on track. Learn as much as you can about managing your money effectively to ensure a financially stable future.
Students start hearing from their loan servicers as soon as loans are disbursed. If a student hasnt already set up an online account with his or her servicer(s), now is the time. An online account allows borrowers to view their loan balance, review payment options, and begin to assess whether consolidation or loan refinancing may be right for them after they leave school. Borrowers can also contact their loan servicer by phone, email, or via online chat. Loan repayment is long-term and can be complex. Students should allow themselves time to gather information and assess options. For federal loans, students can find information about their servicer and their loans at www.nslds.ed.gov. For private loans, a student should check his or her lenders website.
PayScale: Whats the single best thing students can do to avoid defaulting on their loans?
Anne Del Plato: The best thing students can do for their student loans is to get into the habit of paying their loans on time each month. An easy way to ensure on-time payments is to set up automatic deductions. Many lenders offer an interest rate discount or other financial incentives for borrowers who sign up for auto debit. If a borrower runs into financial problems, they should reach out to their student loan servicer(s) right away. Deferments and forbearances may be available in the case of temporary unemployment or other financial difficulties. Staying in touch with loan servicers, keeping current on loans, and being aware of the options available are some of the best ways to stay on track.
Anne Del Plato is the Regional Director for U-fi Student Loans and is an expert in many aspects of financial aid, student loans, and debt management. Annes experience includes positions in a number of areas of higher education finance including college financial aid offices, training and outreach development for a state financial aid agency, and most recently, as a Regional Director of Nelnets Partner Solutions team. Anne has spoken at numerous financial aid conferences across the Northeastern United States.
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TAMPA BAY, Fla. — Randolph Graham, 23, of Tampa, is behind bars, accused of killing former University of South Florida football player Elkino Watson, reports CBS affiliate WTSP. According to the station, investigators believe Graham knew he was a wanted man and turned himself in Wednesday night.
Watson, 23, and his friend, Desmond Horne, were stabbed repeatedly outside an Ybor City club at closing time early Sunday morning after a party celebrating USFs defeat of Florida Aamp;M University, reports the station.
Graham is reportedly charged with second-degree murder with a weapon and second-degree attempted murder and is being held without bond. Police released pictures earlier in the week from the deadly night, looking for a person of interest, who they now confirm is Graham.
Investigators say theyve been working tirelessly on the case since the deadly fight happened outside of the Orpheum, but police credit tips from the community and cell phone video in helping them to close in on Graham, says the station.
Its sad, he (Watson) went over there to have a good time, celebrate the win of USF that night, and this tragedy happened. For the family, Im happy we had closure fairly quickly in this case, says Capt. Ruben Delgado.
According to the station, police are still investigating if there will be any more charges, as they know that several people were involved in the fight that deadly night.
Theyre reportedly asking patrons who may have cell phone video of the evening to come forward and share it.
By Tracy Becker
Learn more about Tracy at NerdWallet’s Ask an Advisor
You can find a huge amount of information about credit scores, and it can be very difficult to figure out what will actually help your credit. Some credit “tips” have little impact on scores, while others can even harm them.
Fortunately, there are some relatively simple ways to boost your score. Here are five moves to consider now.
Focus on your score — not your income
As a credit expert, I encounter hundreds of high-net-worth individuals who assume they have a great credit score because of their wealth. But your income has nothing to do with your credit score. If you have $7 million in the bank but are late on your credit card payments, your credit score will still be poor. Missing a payment will affect anyone’s credit score. So make all payments on time, no matter what.
Keep a good balance-to-credit-limit ratio
When you want your credit scores to be as high as possible — for example, when you are applying for a mortgage — keep your outstanding balance on each card below 10% of the credit limit for a few months prior. So, if your credit card has a charge limit of $1,500, keep your outstanding balance below $150. It’s also helpful to have a limited number of credit cards with outstanding balances. Do not close credit cards; just pay off the balances.
Become an authorized user
If done correctly, being added as an authorized user on someone else’s older credit card account can boost your credit score. Since the average age of credit accounts has an impact on scores, being placed on an old card can age your credit and add points. But you have to be careful. The individual should have a strong payment history and low credit card balances.
In addition, some card issuers reward cardholders with extra cash, points or miles for adding an authorized user.
Pay attention to when balances are paid off
Many people assume that when they pay off their balance on a credit card, that fact shows up right away in their credit score. But most credit card companies report customer balances to the three major credit bureaus at the beginning of each month, and it can take 30 to 60 days for your credit score to reflect that. Use this knowledge before deciding when to apply for a mortgage or personal loan. A higher credit score can help you win better terms on a loan.
Look into credit repair, but carefully
Using the right credit repair expert can help you see improvements in your credit score. There are complex laws involving creditors, credit bureaus, collections companies, judgments, tax debt and more. A seasoned expert can help you navigate this confusing maze, and you may be able to see a boost in your credit score of 10 to 200 points in just months.
The key is to choose a reputable company, and to make sure they review your credit before taking you on. Without a full credit analysis, there is really no way of knowing whether a credit profile can be improved. To allow a prospective client to sign up for credit repair services without a thorough credit analysis would be unethical.