Love is love. Ever since I was a wily teenager, I’ve had the romantic notion of being with a woman I care about no matter what her financial circumstance. My father used to subtly encourage me to meet some of his friend’s daughters who so happen to come from wealthier backgrounds. They were never my type unfortunately. Only until I reached college did I realize he was trying to play match maker to ensure my financial well-being.
I remember bringing one girl home to “hang out” at the age of 13. When my parents found out she was raised by a single father, I could sense my parent’s lack of enthusiasm. Or maybe they just didn’t like what we were up while they were still at work! My parents didn’t say anything mean, they just weren’t supportive of my latest fling. They encouraged me to stop messing around and start studying instead.
I also recall talking to my parents at the age of 14 about dating a real life princess. Her name was Tengku Zarina and I was smitten. Zarina was of Malaysian royalty and my parents were fascinated by the potential. Unfortunately, my pursuance failed since she was two years my senior. Girls hate younger boys, which is why single men love growing old. If you’ve wondered why men tend to only date younger women, now you know it’s all the woman’s fault!
CREDIT SCORES, FINANCIAL STATUS AND MARRIAGE Read more…
The housing market correction was brutal. If you are one of the millions of people considering foreclosure or a short sale, you need to read this post first and understand all the consequences before proceeding. If you are already in foreclosure or going through a short sale, then you should check your latest credit score and figure out how to climb out of purgatory.
A foreclosure and a short sale have similar negative hits on your credit score. A foreclosure is generally worse because you are not working with your bank whom you owe money to settle your debts. A short sale, on the other hand is debt forgiveness. Your bank agrees to forgive the difference between the sale and what you owe. Just be aware you will probably have to pay taxes on your deficiency. There is no free lunch.
Once your credit score gets trashed, it takes anywhere from three to seven years to fully recover. Sometime your score may never fully recover at all. With all the questions I’ve received on the subject, and my own temptation of letting one of my vacation properties go during the economic crisis, this post should help you weigh the pros and cons of foreclosure or a short-sale. The information is gathered from our friends at FICO, two real estate lawyers I spoke to, my own experience, and thoughts from several mortgage officers.
How Much Will Your Credit Score Get Hit In A Foreclosure? Read more…
There’s Always An Excuse For Being Late!
I was so rushed to pack for Europe that I forgot to schedule my normal credit card payment for the first of the month! As a result, I missed my $535 credit card bill completely and didn’t realize it until three days after due date!
The first thing to realize is it’s not the end of the world if you accidentally miss a credit card payment. Things like this happen all the time, and the hammer does not fall on your credit score so quickly.
The second thing is there’s a grace period to how late you can be before getting hurt. Being three days late is much different from being 30 days late. But being 90+ days late is a disaster!
The final thing is credit card companies want to make money off you. Paying late or not in full every month makes them an estimated $60 billion+ a year! If credit card companies knew you would never default, they’d happily let you pay late all the time!
TWO STRATEGIES FOR HELPING WAIVE LATE PAYMENT FEES Read more…
When I found out Pacific Gas & Electric (PG&E) destroyed my credit by 100 points for an $8 non-payment by my tenants who moved, I was devastated! I was more than 80 days into my primary home mortgage refinance when my bank told me that after checking my latest credit scores (they checked once at the beginning of the process, and again 80 days later since it’s taken so long) one score sat at only 670, thereby precluding me from the 2.625% 5/1 mortgage interest rate!
Upon hearing the news, I plopped down on my sofa and began shaking my head. All this time spent dealing with the mortgage officers wasted. My nerves were already frayed at day 80 because I was guided by my bank in the beginning that I would close in 45 days or less But, due to the high volume of purchase loans, refinance loans were less of a priority.
I just couldn’t believe that a $8 utility bill by my tenants didn’t pay from THREE YEARS AGO could kill my credit score and derail my mortgage refinance process. I kept wondering how come the same bank didn’t find anything wrong with my credit score a year ago when I refinanced, or the year before that! Not one to ever give up, I began formulating a plan to FIGHT BACK!
REGAINING YOUR CREDIT SCORE BY FIGHTING BACK ONLINE Read more…
The corollary between straight A’s and a perfect credit score is beautiful. With straight A’s in high school, the chances of you getting into a top university with a merit scholarship increases drastically. After all, how many valedictorians do you see go to Chico State?
With straight A’s in college, you’ll be invited back to interview at all your favorite companies and undoubtedly get a job so long as you aren’t some derranged lunatic with crazy eyes! With a nice job usually comes nice pay and a nice bank account years down the road.
Five years out of college at your wonderfully rewarding, high paying job, you develop a fantastic credit score of 800. It’s not the perfect credit score of 850, but it’s 60-80 points higher than the level which is considered “Excellent” (720-740). When you go to apply for a car loan, the dealer offers you 0% financing on that hard to get 2013 BMW 335is coupe. When you look for an apartment in a hot job market, landlords actually call you back and give you one month free rent in order for you to be their tenant! And when you live in a nice apartment in a nice neighborhood, sexy ladies and beefcakes take notice and want to get to know you more!
Which do you choose?
ARGUMENTS FOR A PERFECT CREDIT SCORE Read more…
When I hosted my open house for one of my rentals last fall the demand was overwhelming. Over 50 parties showed up and by the end of the day I had 20 applications on my dining table. Each application contained at least one bank statement, an earnings statement, a letter of reference, sometimes a resume, and of course their latest credit score.
My asking price was $3,300, which in retrospect was probably $200 a month too low given the amount of demand I received. I felt too guilty raising the price after the advertisement, so I let it be, hoping someone would offer more instead. I was offerred free meals and back massages instead curiously enough.
The good thing about so much demand is that I got to be more picky because nothing is worse than having a problem tenant who always complains, makes a lot of noise, and is always late on rent. Thank goodness I haven’t had one of these type of problem tenants yet, and I don’t ever plan to have one if I maintain a disciplined approach to screening.
With so many applications on the very first day, guess which document I looked at first to screen? The credit score report of course!
YOU NEED AN ACTUAL CREDIT SCORE TO BE CONSIDERED Read more…
I am a big fan of everybody checking their credit scores at least twice a year regardless of their borrowing needs. The world is a sinister place where greedy corporates go to no ends to crush you for being late on any payments you’ve made, no matter how small. There are also an endless amount of identity thieves out there who will take advantage of unassuing people.
Some corporates will purposefully let your late payment sit for years before they can come after you because that way, they can tack on huge fees and really rip you a new one when they finally get a hold of you.
Just go ask the IRS what they like to do about erroneous tax returns. They’ll wait 3 years to let you know that you made a mistake on your tax returns. In those 3 years, they will have tacked on an usurous interest rate penalty 100X higher than the savings rate you can get in your money market account. Why? Because they can and will bank on your fear to pay the money and shut up!
Why do you think the IRS tax code is 70,000 pages long? To confuse the crap out of you and make you make mistakes so they can assess you penalties! That’s right. The world is a sinister place and you need to be protected by educating yourself and consistently checking your credit score at least twice a year to see if it’s getting dragged through the mud.
REASONS WHY YOU SHOULD CHECK YOUR CREDIT SCORE REGULARLY Read more…