Implications are if you refinance towards the end, you are taking on more interest payments instead of paying off principal.
Answers A 5.75 B 5.96 C 5.31 D 5.5
What’s in your score Payment History Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.) Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items) Severity of delinquency (how long past due) Amount past due on delinquent accounts or collection items Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any) Number of past due items on file Number of accounts paid as agreed Amounts Owed Amount owing on accounts Amount owing on specific types of accounts Lack of a specific type of balance, in some cases Number of accounts with balances Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts) Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans) Length of Credit History Time since accounts opened Time since accounts opened, by specific type of account Time since account activity New Credit Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account Number of recent credit inquiries Time since recent account opening(s), by type of account Time since credit inquiry(s) Re-establishment of positive credit history following past payment problems Types of Credit Used Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.) Please note that: A score takes into consideration all these categories of information, not just one or two. No one piece of information or factor alone will determine your score. The importance of any factor depends on the overall information in your credit report. For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. Thus, it's impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles. What's important is the mix of information, which varies from person to person, and for any one person over time. Your FICO score only looks at information in your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting. Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your score. What is Not In Your Score Your race, color, religion, national origin, sex and marital status. US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act. Your age. Other types of scores may consider your age, but FICO scores don't. Your salary, occupation, title, employer, date employed or employment history. Lenders may consider this information, however, as may other types of scores. Where you live. Any interest rate being charged on a particular credit card or other account. Any items reported as child/family support obligations or rental agreements. Certain types of inquiries (requests for your credit report). The score does not count “consumer-initiated” inquiries – requests you have made for your credit report, in order to check it. It also does not count “promotional inquiries” – requests made by lenders in order to make you a “pre-approved” credit offer – or “administrative inquiries” – requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either. Any information not found in your credit report. Any information that is not proven to be predictive of future credit performance. Whether or not you are participating in a credit counseling of any kind.
Overview 2004 Consumer Finance Survey Percent with debt Primary residence mortgage 45% Other real estate mortgage 5% Home equity line 1% Installment debt (Car and education) 43% Credit card balance 44% Other debt 7%
Phantom Fixation – The objective is to put something that is completely unavailable before you that appeals to health issues, wealth, popularity or avoiding death.
Commitment – The salesperson tries to get you to commit but saying that your earnest money or deposit will be lost. Often there are laws that say you have 3 days to reconsider and get your funds back in full. Know your rights before you go in to buy.
Authority – The salesperson will say that they’ve been in the business for years and know that this is the best deal that they’ve seen. They might cite specific features.
Social Proof – This tactic tries to get you to believe that everyone is getting one so you should, too.
Are there any needs that should be wants? Check with folks in your group.
Look at the wants. What can you do to reduce the wants?
An unnamed credit card bill Doctor's visit copay 10 N Lightbulb for car 5.22 N Fast food restaurant 6.44 N Drink and snack 6.64 W Restaurant 22.93 W Groceries 31.92 N Sports equipment 211.04 W Restaurant 119.08 W Groceries 36.07 N Groceries 35.59 N Medical 23.04 N Emergency Room Visit (Canada) 409.94 N Groceries 53.89 N Finance Charge 9.54 Foreign Transaction Charge 12.29
Credit cards encourage you to spend. So if you have problems with spending too much, use cash.
Opt out of credit card offers by calling Opt out 888-567-8688 or going to the website www.optoutprescreen.com .
Before you sign on to a credit card, use the credit card evaluation form to evaluate all fees and charges.
Keep only two credit cards on you to minimize loss.
Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place. Some fraud experts recommend that you photocopy the cards you carry with you.
Student loans outstanding (still to be paid back) are about $525 billion.
Federal student loans are the largest source -12 million loans were made for a total of $55 billion (2006).
On average students coming out with a bachelor’s degree had $20,000 in debt, those with a graduate degree had $35,000 in debt, and those coming out of professional schools such as law school and medical school had $100,000 in debt.
An AOL survey showed 65% of those who took out student loans still had an outstanding balance at age 35.
Adjustable-rate Mortgages You have an adjustable-rate mortgage for $200,000 that resets after a year. The rate is set at 2% above the 90-day treasury bill. When you assumed the mortgage a year ago, you were given the rate of 4.97%. The treasury bill rate is now 5.03%. What will your rate be? What increase will you see in your monthly payments? Per $100,000 Monthly Payment 5% $542.10 6% $605.41 7% $671.55 8% $740.23 9% $811.14 10% $883.99 11% $958.54 12% $1,034.53 13% $1,111.76 14% $1,190.02 15% $1,269.17
Stay calm and work your way slowly and surely through the problem. Don’t delay. Take action now and make it a priority.
If you feel that an error caused your credit problem, tell the credit rating service. Be diligent about monitoring your credit report.
Seek financial counseling right away . Use free counseling services that are listed in www.usdoj.gov/ust . Be aware of credit counseling services (even though they claim to be nonprofit) that charge you fees.
Make a list of all the debts you owe with the creditor names and addresses. Call your lenders and creditors. Let them know you're having financial difficulties.
Prepare a realistic spending plan to pay down your debt.
If you have savings, consider using it to pay as many bills as you can. Consider selling some assets. Consider getting a second job to pay off your debt.
It might take longer than you thought for your financial crisis to go away. Be persistent with your creditors and payment plan.
As you start to pull yourself out of the financial crisis, remember to set aside money for savings.
Safeguard all your financial information. Shred or burn all old financial documents. Lock up your financial documents.
Don’t give out your social security number unless absolutely necessary. If you do, ask how they protect your financial information. Ask for another identification number for most routine things. Check to see if your social security number is on the internet at StolenIDSearch.com .
Review all your credit card bills and reconcile with your receipts. Do the same with your bank statement. Check all your account statements to ensure that they are correct.
Review your credit report annually and correct any errors.
Report fraud or file complaints when you find financial service companies have violated the law.