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Mortgage Default By Race

If you're in debt, your credit rating is extremely important because it represents a significant part of your ability to get out of debt. The better your credit rating, the easier you'll find it to refinance your debt, cutting your monthly repayments and leaving you more money to pay off your debts in a shorter period of time.

However, there are so many credit myths doing the rounds that it's difficult to know what might affect your credit rating. In fact, the gap between what people think and what actually affects credit ratings has grown to an unprecedented level.

For example, more than 50% of people don't understand what a credit rating is, how it affects their ability to borrow, and more importantly, how it affects their ability to get out of debt. So here's the biggest credit myths and the real truth behind them.

Credit Myth 1: If You're On A Credit Blacklist Your Credit Rating Will Be Poor

This is one of the most popular credit mistakes. It's also the myth that's furthest from the truth. So let's get this straightened out right from the beginning. There is no credit blacklist. It just doesn't exist.

Yet that doesn't stop millions of people from believing in it. More than 40% of people who are refused credit blame their situation on some mythical list that bans all lenders from granting them a loan.

If you are refused credit, the only reason is that your credit rating displays a financial history that makes lenders nervous about your likelihood of repaying their money.

Lenders like continuity. They like lending to people who have a history of making regular loan repayments on time because they can be more confident that they will get their money back. That's why credit reports carry historic details of the loans that you've applied for, been granted, paid off, any defaults, previous addresses etc.

The practice of red lining, where lenders discriminate against individuals or whole communities on the grounds of gender, religion, ethnic origin, race or sexuality, is illegal in many parts of the world, and due to competition among lenders is less of a problem than in the past.

So if you want to increase your chances of being granted a loan at better rates, you don't have to escape from a blacklist, just provide some stability to your credit history. Try to stay at the same address for a number of years, show lenders that you have the ability to repay a loan to completion, and make sure that you're registered to vote.

Your credit report will state whether you're on the electoral register and lenders place great emphasis on this fact as it helps them to double check who you are and where you live.

Credit Myth 2: Your Credit Rating Is Set By The Credit Reference Agencies

This is also another credit myth that's complete and utter rubbish. But more than 50% of people believe that credit reference agencies set credit ratings.

No, no, no, no, no and just to make certain, no!

Credit reference agencies just collect information about your financial history and present the facts in the form of a credit report. This includes information about your existing sources of credit (personal loans, credit cards, mortgages), your repayment history and whether you have any payment defaults, court judgements or bankruptcy orders against your name.

Then, when you apply for a loan, your chosen lender can request this information from one of the credit reference agencies and decide whether you meet their lending criteria. In most cases the lender will use your information and their own mathematical formula to calculate a credit score. If your circumstances generate a certain number of points you get the loan. If your score is too low, they will reject your application.

Credit reference agencies only report facts from your financial history. And if you dispute any of these facts, there are various procedures to resolve the situation.

Credit Myth 3: Previous Occupants Of Your Address Can Affect Your Credit Rating

More than 70% of people believe this extremely convincing myth. And it's easy to see why. The general belief runs like this - You ask for a loan, the lender checks your credit report, your current address causes alarm bells to ring because it's the same address that already appears on one of the mythical credit blacklists. The lender becomes panic stricken and their computer spits out a loan rejection letter. End of story.

Rubbish!

From a lender's point of view, it doesn't matter who used to live at your address. Credit is a personal matter. All that lenders are concerned with is your ability to repay the money that you've applied to borrow. So they'll look at your individual circumstances. For example, if you've changed address in recent years, they'll want to know your old address so that they can check that you were living where you said you were, and not to find out whether the previous or subsequent owner is a bankrupt.

About the Author:

For more information on how to
get out of debt
, visit Stuart Laing's website at
icanhelpyougetoutofdebt.com
.

Source - Credit Myths - Mistakes That Will Make Your Debts Worse - Part 1

Holtz-Eakin on McCain: MSNBC 09/08/08

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Mortgage Help In Ct

Question: How can someone with medium income buy a house in Southcentral CT?

Ok I am a first time home buyer, I have lived here for almost 4 years and just finally started to build my credit. The score is good, but my history is quite short. To the point I can hardly get a credit card. Anyhow, we are interested in buying a house here in the New Haven - Milford area but the houses are sky high in prices. We need a 3 bedroom and nothing decen goes less than 220K if not 250K. How in the world can someone with 40K income pull that off? This is very unmotivating. Will I be forced to rent for my life? I cannot afford a 1600 mortgage or more. The taxes are also ridiculous! But we really want to live in this area as I have a good job.

Answer: I know how you feel. Prices up here in NH are ridiculous too. If you want a really nice house with 3 + bedrooms that isn't older than dirt and is in a really nice area, you have to expect to pay AT LEAST $260,000 and UP. It's really hard for people like my husband and I who aren't rich and don't make tons of money per year. (I'm in social services and my hubby is self-employed, need I say more? lol). We just have come to realize that we're going to have to settle for a slight older home that may not be in the best area. We're just looking hard to find the best one that needs the least work and has room to add on to in the future, for when, if ever we have the money to do it. Also, look for foreclosure homes, we're doing that as well. Good luck!
We currently own a townhouse (our first home) that we're selling right now. We got it for really cheap three years ago and now are going to make a good profit off of it. So maybe that's something you could do - buy the cheapest townhouse/condo you can find, live there for a few years, and then sell it for a profit. That's what we're doing. We'll use our profit as a downpayment for a new single family house with some extra money for us and repairs.

7133 Waterford Ct Longmont Co FSBO Help With Listing - Drive by Only - Longmont Mortgage Help Expert

Mortgage Relief For Military

Question: Question for anyone who has used the Servicemembers Civil Relief Act for interest deduction?

I'd like to hear from any military personnel (or spouses) who have actually written to a credit card company (or mortgage co., etc.) requesting the 6% cap rate due to deployment. Was it enough to send orders and the typical 'boilerplate' letter requesting the lowered rate, or did the company request that you send additional info? I've heard that you had to prove that your pay would be impacted due to deployment. This is not the case with us however I will not be working due to childcare issues. So is it worth it to send the letter? Any insight would be helpful.
Thanks for your answer; I am aware of all the details except the specifics for this following one: I have read on military sites that you have to prove your pay is impacted--I'm just wondering if anyone has ever really had to do that and if so, how did you go about it.

Answer: We used this 6 years ago on an auto loan when we went from Guard to active duty. We just called them up, told them that we were getting activated and that we wanted to use our Civil Relief Act to get the interest rate dropped. They just needed us to fax them a copy of our orders showing them that we were Guard getting activated. They never even asked us about our income We didn't even get deployed, just stationed in Germany. Anyway, they capped it right after they got the fax and NEVER lifted the cap at all. I am not sure if that was a typical situation but we had no problems what so ever. The only requirement we faced was that my husbands name had to be on the account (which it was) . So if you have a car loan that is only in your name, you can't use the 6% cap on it.

Hope this helps a bit

Vegas PBS Recession Rx May 18, 2009 Part 2