Almost 44 million Americans have had their student loans in deferment since March 2020. Those payments will start up again the end of this summer – around September 1, 2023. Many of these borrowers have not had to budget for the student loan payments, possibly creating some real challenges. There is fear that student loan delinquencies will jump to 10% or more. What can you do if you are one of these borrowers that need to start paying? There are some options.

In a recent survey on credit scores, those between the ages of 25 and 70 graded themselves as having a “B” grade understanding about credit scores. When they took a subsequent questionnaire, their passed rate was 29%. Do consumers really think they are much smarter than what they really know about credit scores? The correct answer is a resounding “Yes” and this costs every such consumer a lot of money.

The FHFA has responded to criticism about their new fee structure. How does the fee structure for a conventional mortgage work and how does these changes impact a homebuyer’s interest rate?

The FHFA – the federal regulator for Fannie Mae & Freddie Mac -- set out new guidelines for interest rates and one part of the change has certain consumers with lower credit scores qualifying for lower interest rates than other consumers with higher credit scores. Someone with a 640 credit score in essence will qualify for about ¼% lower in interest rate on a 30 year mortgage than someone with a 740 credit score. This is flat-out wrong! How does this happen?

For many years, Mr. Dave Ramsey, debt solutions guru, advocates a position that no consumer needs a credit score. He claims that you can purchase a house or anything else without a credit score. He basically tells his followers that a credit score is a bad thing. Since he doesn’t understand FICO® credit scores, he pushes a position that is financially illiterate.

I recently walked in another loan officer’s office when I overheard his conversation with a client he was on the phone with. He was trying to tell her how to raise her FICO® Scores. However, the information he gave was inaccurate. After he finished the call, I asked him about his incorrect credit score comments to the client. He responded, “It doesn’t matter. She won’t know the difference.” he didn't care. It was not his money at stake. This is not out of the ordinary. Loan officers too often give bad advice that end up hurting their clients. Why does this happen?

Everyone knows that interest rates are impacted by credit scores. The lower the credit score, the higher the interest rate. But hardly anyone understands the impact of a lower credit score to your home purchasing power. It is a lot more than everyone understands, and even mortgage loan officers.

Bank failures have captured the headlines over the last few weeks. Silicon Valley Bank and Signature Bank along with a few others have been taken over the U.S. government. How does that impact you when you have an account with one of these failed banks. It can have a huge impact – almost always lower – on your lender’s FICO Scores.

Everyone has some source to track a credit score. It could be online, a bank or credit union or a credit card company. With over 70 different credit scores marketed to consumers, answering these five questions will help you if your credit score is worth tracking. For more information, you can also go to the podcast available on Spotify and also Youtube, The Drive to 850, Podcast 5: Why are Credit Scores so Different https://spotifyanchor-web.app.link/e/eN2qivmPkxb

Everyone wants to get the lowest interest rate on a mortgage when they purchase or refinance a home. Many consumers think a minimum 720 credit score will qualify them for the lowest interest rate. More savvy consumers realize that that credit score requirement is 740. Now that number is being raised to 780 for the most popular mortgage loans. There are a few other new criteria in order to get the lowest interest rate. What does this mean for prospective home buyers and those looking to refinance their mortgage? Things are changing!