Personal Finance News Tuesday 5/14

Phil's Personal Finance Tip of the Day:

5 Ways Buying a Home Can Hurt Your Credit

By Jeanne Kelly | Credit.com 

I remember when I bought my first house. It was a great feeling of pride to be standing in a place that

I owned, that I could call my home. Aside from being a place to rejuvenate from your busy day while you spend time with your family, a home is also a key step toward building a financial nest egg that you will rely on for years to come.

But did you know that buying a home can also hurt your credit? If you’re not careful, it can go from a positive experience to a negative experience — almost in the blink of an eye. Here’s how buying a home can hurt your credit if you’re not careful:

1. Taking too long to shop for a mortgage. Mortgages can be tens of thousands or even hundreds of thousands of dollars, so it makes sense to shop around for the best rate you can find. Your credit score (the measure of credit health that many mortgage lenders rely on) gives you a 14- to 45-day window (depending on the scoring model) to shop around for rates. Any mortgage inquiry you make within that 14- to 45-day window will only count as one inquiry (whether you make one credit inquiry or 10). Any inquiry outside of that window of time could count as an additional inquiry. So when you decide to start shopping for rates, try to make sure that you keep it all within two weeks to a month and a half.

2. Keeping up with your mortgage payments. One of the good credit habits that can have the biggest impact on your credit score is paying your debts on time and in full . Your mortgage payment is one of those bills and paying your monthly payment in full each time it is due (i.e. monthly or bi-monthly) can help you to build up the positive credit habits that contribute to higher credit scores. And as we’ve seen in recent years, struggling to keep up with mortgage payments can result in damaged credit and even foreclosure and bankruptcy. Before you buy your home, make sure you know exactly what your mortgage payments will be and make sure that you can afford them.

To read the entire article from Jeanne Kelly | Credit.com:
http://finance.yahoo.com/news/5-ways-buying-home-hurt-100010538.html


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Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.