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Money

It's always about the Money!

Good Morning/Afternoon/Evening Fellow Provo Pulsians!

I am the same Timsierramist who earlier asked about apartments in the Provo area. Much to some of your dismay, I have chosen King Henry Apts for my dwelling most of the school year, with a small gap in July to stay at the Sparks II apartments (I get out of the military in late June and King Henry doesn't accept Fall tenants until late August).

Anyways, that's neither here nor there, on to the question of this post.

Credit Cards for College Students

This is very important. We are counseled to stay out of debt; however, I think that many college students don't realize how important a credit card is.

Here are three solid reasons why every college student should get a credit card.

1. You need to start building your own personal credit. I worked in the mortgage industry for a few years. When the day comes that you are ready to buy a house or condo, you will need at least three trade-lines in good standing. That means you will need to have had three lines of credit against your name (probably for about two years). Get a credit card as one of them.

What to do about high gas prices?

As we've all noticed, gas prices have been rising. Though my gas prices aren't high (I carpool), I'm a certifiable cheapskate, so I went about exploring alternatives. The easiest thing to me, it seemed, would be to convert my vehicle to CNG (compressed natural gas), available at the Flying J a mile away from me for 68 cents per gallon equivalent.

A Credit Score You've Earned

Here is an article my Father-in-law sent me that relates to a previous article on this site talking about “credit renting:”

A Credit Score You’ve Earned
By Michelle Singletary
Thursday, July 12, 2007

A pending change to a popular credit scoring system is about to make it much harder for people to polish their credit by riding the coattails of someone else’s good payment record.

Fair Isaac, the creator of the widely used FICO credit scoring formula, is adjusting its scoring method to fight a growing trend known as piggybacking.

Piggybacking involves letting another person become an authorized user on your credit card account. As an authorized user, that person immediately inherits the payment history of the account. People seeking to boost their credit ratings typically hitch themselves to folks with histories of paying their cards on time and keeping their balances low, all of which maximizes their credit scores.

In the past, this arrangement has been between family members or friends. Parents are often advised to do it for their college-age or young adult children (a move I highly discourage).

In recent years, a growing number of companies have begun selling authorized user services. These so called credit-repair companies, which advertise heavily on the Internet, promise that people can push up their scores by 200 points or more. FICO scoring ranges from a low of 300 to a high of 850, and the higher your score, the better the loan terms and rates you can get.

Brokers selling this service also promise that authorized users won’t get the credit card number or information that could allow them to use the credit card. However, if the information is included on a person’s credit report, which is the whole point of this transaction, it’s possible to find a way to use the card.

The Lure of "Credit Renting" to improve your overall credit score

An interesting article popped up in the Daily Herald lately about companies offering "Credit Renting."

This one guy, Alipio Estruch had a low 550 credit score, but wanted to purcahse a $449,000 Spanish-style house in Weston, Fla., a few miles west of Fort Lauderdale.

Instead of spending several years repairing his credit rating, which he said was marred by two forgotten cell phone bills and identity theft, the 37-year-old real estate agent paid $1,800 to an Internet-based company to bump up his score almost overnight.

Instantcreditbuilders.com, or ICB, helped Estruch boost his score by arranging for him to be added as an authorized user on several credit cards of people with stellar credit who were paid to allow this coattailing. Parents also often use this practice when they add their children to their credit cards to help them build solid credit.

Estruch paid $1,800 in December 2006 for three credit card spots, and by January 2007, his FICO score jumped from 550 to 715. In mid-March, he closed on his four-bedroom beige stucco house after obtaining a 30-year fixed-rate mortgage from a unit of American Home Mortgage Investment Corp. It carried a 7.5 percent interest rate and required no down payment.

How rich are you?

Here's a website called GlobalRichList.com that shows you how wealthy you are relative to the rest of the world.

It's interesting to see how rich we Americans really are. Even our poorest are better off than most.

(Via Consumption Rules.)

LDS Greed?

I have said before and believed for years that money was the god of Utah Valley, and more generally, to too many Church members. Today I was taught a lesson that not only confirmed what I believed, but expressed a situation far worse than I imagined.

Our stake president spoke at our ward conference, to the Sunday school class (and this is in Rexburg), and told us some startling facts. He said that in the United States, college-age members contribute more per capita towards fast offerings than older adults. He suggests that this is because too many members are buying houses and vehicles far beyond their needs and money that could be going towards fast offerings and charitable contributions are instead making payments against totally unnecessary items of luxury.

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