A home equity loan is a worthwhile option if you’re a homeowner in need of a lump sum of cash. These loans feature competitive rates compared to credit cards and personal loans, and you may qualify for a tax deduction. But can you get a home equity loan and reap these benefits if your credit score is bad? It depends. What is a home equity loan? A home equity loan is a type of second mortgage. Home equity loans allow you to borrow against the equity you’ve built in your house. Traditional banks, credit ...

Welcome back to Worldwide Exchange. Asusu is a leading fintech platform that helps renters build their credit by reporting their monthly payments to the major credit bureaus. The startup, which joined the CNBC disruptor 50 list this year, works with twothirds of the country's largest real estate owners and covers more than 5 million rental units.It's also struck a new deal to help to fund the company's growth. Joining me now to break down that news is Asusu's co-founders and CEOs, Samir Goyle and Muimo Abby ...

Dave Ramsey's listeners don't usually call "The Ramsey Show" to complain that his advice failed them. But Marsha from San Antonio broke that pattern when she dialed in with a bold declaration: "We followed your University course… we paid off our house, we paid off our car," she said. "And I went to get a silly charge card on TV, a shopping card, and we found out our credit score is zero. Our credit score was really, really low." It wasn't the victory lap Ramsey expected. Marsha believed she'd done everythi ...

Core Insights - A recent study indicates that 76% of Americans are utilizing buy now, pay later (BNPL) services, with 49% having missed a payment [1] - FICO is set to release a new credit score model that will incorporate BNPL loans, which could significantly affect consumers' creditworthiness [2][3] Impact on Consumers - A significant portion of consumers (38%) are unaware of the upcoming changes to FICO's credit scoring model, which could negatively impact their financial health if they do not act promptly [3] - The use of BNPL services can lead to increased debt levels, as consumers may take on more short-term debt than they can afford due to the perceived affordability of small payments [5] - Missed or late payments on BNPL loans can be reported and may lower consumers' credit scores, affecting their future borrowing capabilities, including mortgages and car loans [6]

You can check your credit reports from Equifax, Experian and TransUnion for free at AnnualCreditReport.com.“The difference between having mediocre credit and good credit is about $150,000 over the life of the loan,” Carrie Joy Grimes, CEO of WorkMoney, told Consumer Reports.Of equal concern is that 27% of those errors were potentially damaging to participants’ credit scores — and that could end up costing them money, as in the case of a typical mortgage.This is surprisingly common. In 2024, Consumer Reports ...

Core Insights - The discussion revolves around the implications of keeping or closing credit card accounts, particularly in relation to credit scores and financial health [3][4][5]. Group 1: Credit Card Management - Maintaining an open credit card, even with a zero balance, can negatively impact credit scores due to its effect on credit mix and utilization ratio [3][4]. - To achieve an indeterminable credit score, it is essential to have no open credit accounts, as any open account will continue to report to credit bureaus [3][5]. - The fear of not having credit cards as a financial cushion is common among consumers, but reliance on credit cards is discouraged [6][7]. Group 2: Financial Advice - Financial experts emphasize that individuals should not depend on credit cards for financial stability; instead, they should rely on personal discipline and hard work [7]. - The credit card algorithm penalizes individuals who have no interaction with credit, leading to a low or indeterminable credit score [5].

Core Insights - The article emphasizes the importance of comparing interest rates from different lenders before taking a personal loan, as even a 1% difference can lead to significant savings [1] Interest Rates Overview - Personal loans are typically unsecured and carry higher interest rates, ranging from 12% to 18% based on the borrower's credit score [2] - Higher credit scores allow borrowers to secure loans at lower interest rates compared to those with lower scores [2] Interest Rates by Bank - **HDFC Bank**: Interest rates range from 9.99% to 24% with processing charges of ₹6,500 before GST [2] - **ICICI Bank**: Charges between 10.45% to 16.50% per annum, with processing fees up to 2% of the loan amount plus GST [3] - **Kotak Mahindra Bank**: Interest starts at 9.98% per annum, with processing fees up to 5% of the loan amount [3] - **Federal Bank**: Interest rates range from 11.99% to 18.99% per annum, with processing fees up to 3% [4] - **State Bank of India (SBI)**: Charges between 10.05% to 15.05% per annum, with processing fees ranging from ₹1,000 to ₹15,000 before tax [5] - **Canara Bank**: Interest rates range from 14.50% to 16% per annum, with rates linked to the repo-linked lending rate (RLLR) ranging from 13.75% to 15.25% [5] - **Bank of Baroda (BOB)**: Interest rates range from 10.40% to 15.75%, depending on the borrower's category and credit score [6] - **Union Bank of India**: Charges interest between 10.75% to 14.45% per annum [6]

Core Insights - Financial infidelity can occur at any stage of a relationship, including before marriage, as illustrated by the case of Ren and Akari, where Akari's undisclosed credit card debt of $65,000 exceeds her annual income of $55,000 [1][2] Financial Implications - Combining finances is a significant step for couples, but Ren's credit score remains unaffected by Akari's bad credit score since credit bureaus do not track marital status [3] - Joint loans may pose challenges due to Akari's high debt-to-income ratio, which could lead to loan rejections, and any joint account activity will impact both credit scores [4] - Akari's debts are her sole responsibility, and Ren should refrain from adding his name to her credit cards to protect his credit score [4] Legal Considerations - In the event of Akari's death, Ren would not automatically inherit her debt unless state law dictates otherwise; her estate would be responsible for settling the debt [5] Relationship Dynamics - Financial issues are a common source of conflict in relationships, with about one in three Americans citing money as a conflict source, and money being the second most common reason for divorce [6]

Core Insights - Home equity lines of credit (HELOCs) are valuable for debt consolidation and home repairs, but the amount one can borrow depends on individual financial circumstances and lender criteria [1] Borrowing Capacity - The borrowing amount from a HELOC is determined by the combined loan-to-value (CLTV) ratio, which compares the total debt on the property to its market value. Most lenders allow borrowing between 80% and 85% of the home's value minus any existing mortgage balance [2][9] - For example, if a home is valued at $350,000 with a mortgage balance of $100,000, and the lender allows borrowing up to 85%, the potential borrowing amount would be $197,500 [3][4] Factors Influencing HELOC Approval - Lenders consider several factors beyond the CLTV ratio, including: - The appraised value of the home, which directly affects equity and borrowing potential [6] - The debt-to-income (DTI) ratio, with a typical requirement of no more than 40% to 50% [6] - The borrower's credit score, which influences the interest rate and borrowing limits [6] - The borrower's income stability and amount, which assures lenders of repayment capability [6] Lender-Specific Limits - Different lenders have maximum borrowing limits for HELOCs; for instance, PenFed Credit Union has a maximum limit of $500,000 [7] Alternatives to HELOCs - If qualifying for a HELOC is a concern, there are alternative financing options available, such as home equity loans, reverse mortgages, cash-out refinancing, home equity sharing agreements, 401(k) loans, and personal loans [8][13]

Core Insights - The article discusses strategies for purchasing a home with a low income, emphasizing the importance of improving credit scores, managing debt-to-income ratios, and exploring various loan options and assistance programs. Group 1: Improving Financial Standing - Improving credit scores is crucial for mortgage approval, as lenders assess creditworthiness and set minimum score requirements [2][3] - Lowering the debt-to-income (DTI) ratio increases the likelihood of mortgage approval, with the 28/36 rule being a common guideline [4][5] Group 2: Budgeting and Costs - Calculating a home-buying budget involves understanding both front-end and back-end DTI ratios, with preferred ratios being 28% for front-end and 36% for back-end [6] - Homeownership costs extend beyond the mortgage payment to include property taxes, insurance, and maintenance, which should be factored into the budget [8] Group 3: Saving and Loan Options - Saving for a down payment and closing costs is essential, with options available for low down payments, such as 3% for certain loans [9][10] - Researching and shopping for mortgage lenders in advance can help identify suitable loan options and prequalification opportunities [11][12] Group 4: Co-signers and Loan Types - Adding a co-signer can enhance the chances of mortgage approval for individuals with low income, as lenders consider both parties' financial profiles [13][14] - Government-backed loans, such as FHA, VA, and USDA loans, offer flexible terms and lower down payment requirements, making them suitable for low-income buyers [15] Group 5: Assistance Programs - Various mortgage assistance programs are available to help low-income and first-time homebuyers with down payments and closing costs [17][19] - The Housing Choice Voucher (HCV) program allows eligible individuals to use Section 8 vouchers for home purchases, providing additional financial support [18]