P h i l l y F i n a n c e . c o m

Here are just a few pointers about personal credit and how to stay on top of it. Basically, you want to have the highest score as possible. This is only very crucial when applying for a mortgage and car loans. Anything over 700 is great. The following is how to get it there and keep it there:

1. Have AT LEAST 4 solid trade lines on you credit report. ‘Solid’ meaning ones that you’ve never been late on, each with a 24 month history. Also, these should be SECURED credit cards, utilities, car loans, mortgages, or student loans (that you are paying back, not ones that are deffered).
2. Credit cards are a good thing!! They give you discounts at many merchants and cash back on food gas and drugstores!! Most with NO fees and low rates (at least introductory). As long as you make timely monthly payments and can control your spending, they will help you graciously with building a good credit and getting the best credit score possible.
3. When choosing a credit card, be sure to get a SECURED one. Meaning, one from a bank (ex. Citibank, MBNA, Capital One, etc). These look GOOD on your credit report, as long as you maintain good account standing. Choose one that has the best deal. Nowadays, you can get them with NO annual fee, 0% interest, and even up to 5% cash back plus points, rewards and special discounts. ***If you are a student with no established credit, Citibank has a Student Credit card that you can get that they basically give on good faith. You have to be enrolled in a college or university and it’ll only be about a $500 limit, but it’s a GREAT start.
4. As tempting as that Bloomingdales Charge card is, don’t open it! Do not open ANY store charges, or ‘unsecured’ credit lines. These will hurt your credit rating, no matter if you use them and pay them every month (which you probably wont anyway), solely because they are UNSECURED, there is no guarantee to the creditor that you will repay the credit granted (versus a car loan or a mortgage or bank card where there is substantial collateral). Plus, you can get better benefits with a secured credit card anyway.
5. CHECK YOUR CREDIT REPORT YOURSELF! There are only a few independent websites authorized by the FTC to generate credit reports free of charge. You can also use the actual credit bureau’s website to access your report, or through an accredited source (normally credit card companies will offer some sort or ‘identity monitor’ service that will let you check and monitor your credit report in conjunction with one of the credit reporting agencies). It important to make sure that everything on your credit report is true and in fact credit that you yourself have obtained and applied for. If not, take the corrective measures to protect yourself (such information will be posted wherever you obtain your credit report). Be sure to check EVERYTHING on the report, not just the credit cards and loans. There is also employment information, address information and personal data on each and every report. **See RESOURCES PAGE for links
6. When buying a house or a car, be careful when shopping- make sure not to shop your financing, or else you wont get as good of a rate as you might have hoped. This is how it works; every time your credit is pulled by CREDITORS, it puts an inquiry on your report (which CAN NOT be removed). The more inquiries that you have on your report in a certain period of time, the lower your score will go. This happens because if a lot of creditors are pulling your report, it appears that you are trying to get lots of credit that is not being granted, for one reason or another, which makes you a higher risk, which lowers your score. Now, normally, this isn’t most of our intentions, we can bitch and complain all we want, but it’s just the way it is.
7. Be aware that there are 3 Credit Bureaus- each develop their own scores for you according to your credit profile. Each will not give you the same score, however they should be with in 10- 20 points of each other. Generally, there is no need to check you credit profile from EACH bureau when monitoring your credit, however, when you apply for a mortgage, the mortgage company WILL pull a report called a ‘Tri-merge’ credit report. This report will show ALL credit information from each of the 3 bureaus. Ask your mortgage broker for a copy of the report (if they wont provide it, ask them to recite all the information on the report, and then they will send it to you) and then you can clearly see if there are discrepancies in you credit reporting from one bureau to the next. Like I said, if there is more than a 10-20 point difference from one bureau to the next, check the information they are reporting and take corrective measures if necessary.

For links to where you can receive your free credit report, see my RESOURCES page.

Remember the days when your parents grilled you about saving money and took you to the bank to open your first savings account. Ahhhh yes, that was certainly a waste of your time at 10 years old now wasn’t it! Considering anything that was put in there was definitely GONE by the time you were 18.

Nowadays, not only do more and more people NOT save, they wouldn’t even know where to put money if they have it. (By this I mean it either sits under their bed or in their checking account, neither of which does them any good). I did some research and with today’s technology (and of course GOOGLE), it’s easier to save now more than ever.

Lots of banks now are utilizing the internet to their advantage, and able to cut a lot of costs that are involved in maintaining physical institutions and accounts by doing so. Now many of these financial institutions offer ‘online banking’ which used to be to strictly monitor your accounts and check balances, but now has evolved into opening accounts, paying bills, and transferring money from one institution to another. With the cost advantages of using strictly the internet and the natural pull for more business, such banks can offer excellent rates that haven’t been around for almost 8 years!

The best rate that I found for a regular SAVINGS account is with EMIGRANT DIRECT. Right now they are offering 5.15% APY on their savings accounts. Other great rates I found at:

This is a problem that occurs more than it should and it is sole due to lack of communication between the buyer’s agent and the mortgage company. The mortgage company needs to verify assets and low and behold, when we ask for copies of cancelled checks from the initial escrow deposit, it came from Mommy’s or Daddy’s account!! 95% of the time- this is a HUGE problem.

Real Estate Agents, when you accept a deposit from a buyer for a property, it may not make any difference to you who it’s from, but unless it has been cleared by the mortgage company, it MUST be from the buyer’s OWN account. This could potentially kill the deal with regards to your borrower getting a mortgage in time to close. In the past years, ‘gifts’ were widely accepted among mortgage lenders as long as they can be verified. However, with the recent up rising of Pay Option mortgages and Portfolio lenders in combination with a massive wave of mortgage and credit fraud, there are only allowed under very strict circumstances. Certain government mortgage programs and first time home buyer programs DO allow gifts, but unless you KNOW from the mortgage company that your buyer will be financed or approved through one of these programs, do not assume a gift will be acceptable. Also, under absolutely NO circumstances can a gift be from mom or dad’s BUSINESS account- this is completely unacceptable. Again, it doesnt make a difference to you or the buyer, but to the lender it appears that this business is lending funds for the down payment of a residential property for someone that is not even in the business. It just cant happen. The borrower has to buy the house with their OWN funds, and nobody elses. If this is not possible, please consult the mortgage company to see if there are ‘gift allowed’ programs available to your buyer, before entering the them into a contract that they may not be able to close on.

The underlying point is to keep good contact and communication with the mortgage company, there are on your side, they want it to close just as much as you do, because if it doesn’t, they dont make any money either. Before you accept a deposit from a buyer, please make sure it’s from their own account or contact the mortgage company a.s.a.p. before accepting it otherwise.

NOTE: They’re ARE some ways to get around this problem if it should occur and not noticed until after the fact, however it’s too much to write in one post. For a solution to your situation or questions email on the CONTACT page.

Welocome to PhillyFinance.com. Here you will find the most vital and useful financial and real estate news, tips, and information that you wouldn’t find on traditional information websites. What I will be doing is posting tips and information for not only consumers, but Real Estate, Mortgage, and Law professionals that are in or some way related to the Real Estate business. As one of the hottest industries and most lucrative personal investments one can make, people tend to get mixed information about Real Estate and when it comes to getting involed and informed.

As a real estate investor myself, and also a mortgage banker, I’ve been on both sides of ‘the table’ and have seen many times more than none, that things go wrong solely because people not informed. It got to the point where i need to start saying something and getting people informed. So as i said before, welcome to Philly Finance.com!!

Check back soon for information and tips that wil keep you on top of your finances, and possibly your CAREER!