Everyday Cheapskate: Whether you like it or not, you need a good credit score

In my perfect world there would be no credit scores. And while I do not believe that credit is necessarily evil, in that perfect world of mine, there would be no need for any of that because it would be, well … perfect!

Back to reality. There are myriad reasons we need to have good credit histories and excellent credit scores.

Like it or not, lots of things are now predicated on ones credit score. Take automobile insurance premiums, for example. Want the best rates? Youll need a good credit score.

Want to make sure that out of all the applicants, you get that really great apartment? You must assume that your potential landlord is going to look to your credit history to determine if you will make a reliable, on-time-paying tenant.

Are you vying for a job with a great employer? Better hope your credit file is clean and represents you well because employers are allowed to look at the way you handle your finances. We now live in a world where, in many situations, ones credit report is considered a character reference. Look in my credit file and you will get a good idea about how I manage my life. Youll see evidence for how seriously I take my commitments, a little about my personal integrity.

The most highly regarded, and used by most lenders and others who look at credit scores, is the FICO Score, and each of the big credit bureaus have their own version of FICO. How these scores are determined, based on the collected information in ones credit file, remains proprietary with the Fair Isaac Corp. that created the FICO Score.

We do have some information, however. One thing FICO?looks at is what it calls utilization rate.

Your utilization rate is your credit limit compared to how much of that credit you are using at any given time, expressed as a percentage.

So, if you have a credit card with a $1,000 credit limit and a $100 balance owing, then you are 10 percent utilized on that card. You figure it by dividing the balance on the card by the limit on the card and then multiplying that figure by 100.

You can figure your aggregate utilization rate by adding together all of your credit card balances and comparing that number to the total of the credit limits on all of those accounts and multiplying by 100. Credit scoring looks at both utilization rates.

The best utilization percentage to have is 0 percent because then you have no credit-card debt and youre not paying interest. But, since thats not realistic for everyone, the best percentage is the lowest percentage you can achieve. In fact, according to FICO, consumers who have scores above 760 have an average utilization percentage of 7 percent.

There are reports all over the Internet that state 30 percent or 50 percent are the target percentages in order to achieve great scores. Those are false reports. In fact, nothing terrific happens at either 30 percent or 50 percent. Thirty percent is certainly better than 50 percent but not as good as 20 percent.

Think of utilization rates as you would golf: The lower the score, the better. Generally, to achieve the best credit score, your utilization rate should be under 30 percent, with the goal to get it down as low as possible.

Pay down your credit cards as much as you can. Theres nothing good about having a lot of credit-card debt. Its expensive debt and it wreaks havoc on your FICO score. If you can get your debt-usage percentage to below 10 percent, your score will thank you.

Mary Hunt is founder of www.DebtProofLiving.com.

You can email her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, PO Box 2099, Cypress, CA 90630.

To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

Credit Cards for Students and Younger Borrowers

For students and younger borrowers, choosing a credit card can seem like a daunting task. According to studies from the Washington State Department of Financial Institutions (DFI), most borrowers in this category will choose a credit card based on advertised incentives and little else. But this type of behavior can lead to negative outcomes that can put younger borrowers on a path to record an unfavorable credit history, right from the beginning. 

For these reasons, college students and new borrowers must learn to look past the advertised offers and focus instead on the details that will define the terms actually seen during the cardholding period. This might seem difficult to those with limited lending experience but this is critical if you expect to start building a strong credit history. Luckily, there are many reputable resources available that are designed to help new lenders understand the terms of your credit cards and to select the lending companies that are best suited to meet your needs. Resources like Bestcredit.net can be used to research the various options available, and even to learn strategies in re-building your credit score after experiencing financial troubles in the past.

Learn to Look Past the Initial Offers

The unfortunate reality is that the benefits seen in most credit card offers expire after a set period of time. Once this expiration occurs, the borrower might then be forced to accept an entirely new set of terms that are much less favorable. One classic example is the 0% interest rate credit card. Typically, these incentives (which do offer great value) will last for six months, and then revert to a much higher interest rate once the initial benefits expire. In many cases, this changing interest rate will be higher than what is offered by other credit card companies.

For those holding a rolling balance, this can completely erase any savings that were seen during the introductory period of 0% interest rates. So, while the initial offer would catch anyones attention and can be used to avoid extra interest fees for those unable to pay off their credit card balances each month, it must be remembered that all of these benefits can be removed after a certain period of time. According to Credit.com , borrowers in the 18 to 24 age bracket spend nearly one-third of their income on debt payments. This is largely because of the added debt costs that are associated with the cost of college tuition. But it should be understood that this figure has nearly doubled since 1992, and this trend shows no signs of reversing any time soon.

Debt Difficulties for Students

College costs can make up one of the most significant investments in a persons life, and if our debt obligations are not managed properly, it quickly becomes easy to fall into a downward debt spiral that can last a lifetime. College students are often forced to pay a larger portion of their income to repay these debts than any other age demographic. This is unfortunate because this is also the time in our lives when we have the least experience in managing these repayment obligations. All of this means that it is important during these times  now more than ever  to truly understand what you are getting into when you sign off on a new credit card agreement. One of the easiest mistakes is to assume that all credit cards are relatively similar, and that any differences in the exact terms will be negligible.

Unfortunately, this is not even close to being the reality as some credit card companies are much more reputable that others. For those that do not hold a revolving balance, the potentially negative effects can be limited as there will be fewer obligations for you to meet. But since this characteristic does not match up with the majority of borrowers in this age group, additional research needs to be conducted before any agreements are signed or any real money is spent. For these reasons, all available resources should be utilized. Websites like BestCredit.net allow borrowers to compare credit cards based on a large number of benefits and demographic categories. Not all websites have access to information that is essential for college students, so it is important to make sure that the information you are reading is relevant for your individual situation. Ultimately, it is important to remember that choosing the right credit card is not as complicated as it seems as long as some necessary research is done early on.

4 Financial Habits That Most of Us Get Wrong

We all fight a constant battle against what were supposed to do and what actually happens in practice. Its human nature and described accurately in Romans 7. But while no one is perfect like Christ, we are commanded to strive after Christ-likeness and as such we should learn from our mistakes and failures especially when the stakes are high.

More than just common sense, this approach is Biblical. Scripture tells us that God will hold us accountable for the responsible use of our resources, whether they are our physical talents, our use of time or the money entrusted to our care.

When it comes to financial health, we arent doing so well, considering the events of the past few years. After enduring the trials and tribulations of the Great Recession, weve continued to spend well beyond our means and teeter on the edge of financial disaster, racking up more than $73 billion in credit card debt in the past two years alone.

The question, it would seem, is what we can do differently. Well, addressing the following four financial habits that most people get wrong would be a good place to start.

1. Spend Within Your Means:The prodigious amount of credit card debt that weve racked up in recent years goes hand-in-hand with the fact that around 20% of people spend more than they make while 26% have overdue medical bills and 61% do not have a budget. Weve allowed ourselves to become addicted to debt through a unique combination of instant gratification and a lack of financial literacy.

The solution starts with a clear picture of your finances. That means getting a handle on how your monthly expenses and debt obligations compare to your take-home and carefully eradicating certain expenses that keep you under water and prevent you from amassing any savings to speak of.

Ultimately, what you want is a thoughtfully-constructed budget which you reference and adhere to each month. If you have trouble sticking to your budget, try only using cash to make purchases or perhaps even pay a visit to a local non-profit credit counselor.

2. Plan for the Future: Much of personal finance is about planning and risk minimization. We work today so we can retire tomorrow. We buy insurance so major events dont wipe us out. Too few people are thinking this way, however. For instance, only 40% of Americans had a rainy day fund in 2012, according to FINRAs National Financial Capability Study, and 34% paid only the minimum on their credit card each month.

It is extremely important that we all set clear financial goals such as paying off the mortgage in 5 years or retiring at 60 years old and then construct a plan of attack for accomplishing them. One of the first goals should be establishing an emergency fund with about a years worth of take-home in it. Such a robust fund will take a while to build, but it is a very important part of planning for your financial future and making sure unexpected expenses dont derail it.

You may assume that building an emergency fund comes after paying off debt on your financial to-do list, but thats not necessarily the case. Ideally, you should pursue a more balanced approach in the early going and only turn your full attention to settling debt obligations once you have a bit of a safety net in place. Otherwise, youre just a broken down car or medical issue away from ending up right back where you started.

3. Build Credit Over Time: Your credit score is far more important than you might think. Not only does it dictate the terms you can get on loans and which credit cards you can open, but it also affects the insurance premiums you pay and your ability to lease a car, rent an apartment, or land certain jobs. That is why its so important to groom your credit from an early age.

The most efficient way to build credit is to have an open credit card under your own name that is in good standing. You dont even have to use it. Your credit card company will report account information to the major credit bureaus on a monthly basis anyway. The difference between good and bad credit is a whole lot of money in the long run.

4. Address Your Kids Financial Literacy: According to VISAs global financial literacy survey, more than 70% of parents say their kids do not know the basics of money management. The only country with a higher percentage was Bosnia.

The first thing we need to do is talk to our kids about money. Studies have shown parents to be more willing to discuss the birds and the bees than money, and theres really no need for personal finance to be so taboo. This, as well as the use of interactive apps and games, will hopefully enable kids to conceptualize the value of a dollar and internalize responsible saving habits at an early age.

The second thing we need to do is give our kids practical experience. The best approach is a laddered progression where kids are entrusted with different financial products, higher allowances, and more bill-paying responsibility as they age. Ideally, they should have experience handling a prepaid card, cash, a checking account, and a student credit card by the time they head for college.

So, there you have it a list of our shortcomings and a roadmap for redemption all in one. If we all take these steps we will help not only ourselves, but our neighbors and our countrys economy as well. Lets get to work!

Weekly Economic and Financial Commentary

Weekly Economic and Financial Commentary
US Review

Inflation Rising, Housing Not so Much

  • Despite the acceleration in consumer prices, the Fed is unlikely to change its current course for a rate hike in the middle of next year.
  • The housing recovery remains slow. Existing home sales perked up in June, while new home sales erased all of the gains made in May.
  • Durable goods orders beat expectations and the factory sector looks to have improved further into July.
  • The economy appears to have bounced back in the second quarter and should maintain growth just shy of 3 percent for the rest of the year.

Inflation Upward Trend Is Clear, Housing Sideways

Inflation has picked up recently and although we expect it to continue to firm as the economy gains momentum, we maintain our expectations that the Fed will raise rates in mid-2015 (see Interest Rate Watch). In June, the consumer price index finally eased some, rising 0.3 percent in the month. Energy prices drove the headline number higher, with gasoline prices rising 3.3 percent. However, it appears that gasoline prices have already retreated this month, which should help boost consumption as lower pump prices allow for spending elsewhere. After excluding energy, prices grew a more modest 0.1 percent. Food prices also finally caught a break after droughts in the western part of the United States contributed to acceleration in food prices earlier this year. The food index grew a relatively modest 0.1 percent in June after averaging 0.4 percent in the prior four months. Furthermore, producer prices indicate that food costs could ease further. Prices for lodging away from home, new vehicles and used autos and trucks all fell in June, keeping core inflation in check.

The factory sector has been showing signs of improvement. Durable goods orders grew 0.7 percent in June, though the underlying details were mixed, and this comes on the heels of a relatively weak number in May. Core capital goods orders posted a solid 1.4 percent gain in the month, but core shipments posted their third consecutive decline. July is poised for more manufacturing activity. The regional PMIs out of Richmond and Kansas City corroborated the July improvement story, indicated earlier by the Empire State and Philly Fed Surveys.

Out with the New House, In with the Old House

Existing home sales posted their third monthly gain in June, rising 2.6 percent, but the housing market recovery is far from robust. Despite the gain, existing home sales are still 2.3 percent lower than a year ago, which is due to weakness in the singlefamily market. Multifamily sales have held up somewhat better but are still just 1.7 percent higher than a year earlier. Homebuyers piled into the market last year to avoid higher mortgage rates, and investors snatched up foreclosures that were becoming increasingly scarce. Existing home sales then initially retreated as these trends reversed but are now increasing again.

New home sales did not have the dramatic ups and downs that were seen in existing home sales, and have been relatively flat for nearly two years. In June, new home sales fell 8.1 percent, erasing all of the gains made in May. Overall housing demand also seems flat, with mortgage applications for purchase struggling to move upward. Some potential buyers are likely finding it more difficult to obtain credit with stiffer mortgage qualification rules in place. As a result, home price appreciation has moderated, with the FHFA House Price Index up a more modest 5.5 percent from a year ago. Amid weak sales numbers, new home inventory continued to build and may have contributed to the sharp contraction in housing starts also seen in the month. On the plus side, however, homebuilders remain relatively optimistic, with the NAHB Homebuilder Sentiment Index rising in June and July.

US Outlook
GDP bull; Wednesday

Following the first quarters surprising 2.9 percent decline in GDP, we are looking for a nice rebound in Q2. Our expectation is for Q2 GDP to come in around 2.5 percent, reversing most of the Q1 decline. The previous quarters sizeable decrease came as exports and inventories detracted 1.5 percent and 1.7 percent from GDP, respectively. Perhaps even more notably, personal consumption expenditures grew at an initially-reported 3.0 percent pace, but the figure was revised down to only 1.0 percent. While the decline in Q1 GDP was rather discouraging, economic indicators thus far in Q2 have been much more upbeat. While we still see net exports putting a drag on economic growth, inventory-building should provide a boost in Q2. Personal consumption expenditure growth is expected to ramp up modestly, rising at a 2.2 percent annualized pace, and business fixed investment should also be a solid contributor.

Previous: -2.9% Wells Fargo: 2.5% Consensus: 3.0%

Nonfarm Payrolls bull; Friday

Nonfarm payrolls are expected to remain strong in July. This comes after a very strong first six months of the year with momentum appearing set to continue upward. Recent employment gains have been broad based, with the greatest strength in the professional amp; business services and construction sectors. The only sector that has shed jobs over the past three months is the information sector. It is interesting to see the large dispersion between GDP growth and the labor market in the first quarter of this year. Due to the strength in the labor market, we maintain that the weakness in economic growth in the first quarter is a one-off event and that the trend in the labor market better represents the current direction of the economy. As we expect employment gains to continue, we also see the unemployment rate continuing its decline. Our forecast is for the unemployment rate to reach 6.0 percent in July.

Previous: 288,000 Wells Fargo: 239,000 Consensus: 230,000

ISM Manufacturing bull; Friday

The ISM Manufacturing Index has experienced a strong upward trend over the past year or so, and we continue to look for positive momentum going forward. The prices paid component remains near 60 – one of the highest levels of any component – as we have seen inflation begin to pick up in recent months. The new orders component has also been strong showing that the manufacturing sector should see growth going forward. While gains in employment have been strong overall, the employment component of the ISM index has been relatively modest, but remains in expansion territory.

Todays release of durable goods orders also suggests continued strength in manufacturing. Regional PMIs for July have been strong thus far and we expect this to be reflected in next weeks release of the ISM manufacturing index.

Previous: 55.3 Wells Fargo: 55.4 Consensus: 56.0

Global Review

Global Economy Continues to Grow at Modest Pace

  • Data released this week showed that real GDP growth in the United Kingdom remained above an annualized rate of 3 percent in the second quarter. Economic growth in the Eurozone, however, remains soft. It is difficult to envision a robust expansion if the French economy, which accounts for 20 percent of Eurozone GDP, continues to struggle.
  • The rate of real GDP growth in China has stabilized at around 7.5 percent in recent quarters, and the smattering of data that we have thus far in Q3 has also been encouraging.

British Economy Continues to Clip Along

Data released this week showed that many foreign economies continue to expand at a modest rate. For starters, real GDP in the United Kingdom rose 0.8 percent (3.2 percent at an annualized rate) in Q2-2014 relative to the previous quarter (top chart). The outturn was in line with the consensus forecast, and it finally brought the level of GDP above the previous peak reached more than six years ago.

A breakdown of the GDP data into its underlying demand components is not yet available, but it seems likely that consumer spending, which has powered the upturn over the past few quarters, continued to be an important driver of economic growth in the second quarter. Indeed, monthly data released this week showed that real retail spending rose 1.6 percent in Q2 relative to the previous quarter. Although we expect the pace of real GDP growth in the United Kingdom to slow somewhat in the coming quarters – the current robust rates of consumer spending are not sustainable – we certainly expect the expansion to remain intact.

Is Growth in the Eurozone Starting to Strengthen?

Monthly indicators suggest that economic growth in the Eurozone continued to expand in the second quarter, albeit at a sluggish pace. However, data released this week offer some hope that Q3 might be stronger than Q2. The manufacturing PMI in the overall Euro area rose more than expected in July while the service sector PMI shot up to a three-year high (see graph on front page). That said, economic growth across the Euro area remains uneven. Specifically, France continues to lag behind Germany. While the manufacturing PMI in Germany rebounded sharply in July, the comparable index in France fell for the fourth consecutive month. Moreover, the composite PMI, which averages the PMIs from the manufacturing service sectors and gives a broader reading on the overall health of the economy, remained below the demarcation line separating expansion from contraction in July. Business sentiment in France remains weak (middle chart). Although economic activity in the overall Euro area should continue to grow in coming quarters, it is difficult to envision a robust expansion if the French economy, which accounts for 20 percent of Eurozone GDP, continues to struggle.

Growth in China Remains Stable at High Rate

The rate of real GDP growth in China has stabilized around 7.5 percent in recent quarters, and the smattering of data that we have thus far in Q3 has also been encouraging. The widely followed HSBC manufacturing PMI for China, which largely measures business conditions among privately owned firms, rose for the third consecutive month in July to reach its highest level since January. The official PMI, which is more biased toward state-owned enterprises and which is slated for release next week, is expected to register its fourth consecutive increase in July. If so, it would be another indication that the much-feared hard landing in China has not come to pass.

Global Outlook
Japanese Industrial Production bull; Wed

Industrial production (IP) in Japan plunged 2.8 percent in April relative to March as the consumption tax hike that occurred on April 1 caused retail spending to swoon during the month. If IP dropped 1.2 percent in June as the consensus forecast anticipates, it will have plummeted at an annualized rate of nearly 12 percent in Q2 relative to Q1. Indeed, we estimate that Japanese real GDP nosedived nearly 4 percent (annualized rate) in Q2 due largely to the effects of the tax hike that pulled spending forward into Q1.

That said, we expect that the depressing effects of the tax hike will prove largely temporary, and other data that are slated for release next week will be important in determining whether this expectation is valid or not. In that regard, June data on retail spending, the labor market, small business confidence, and construction orders should give us a sense of the momentum the Japanese economy has as it enters the third quarter.

Previous: 0.7 percent (month-over-month) Consensus: -1.2%

Canadian GDPbull; Thursday

Canada is the only country in the world (of which we are aware) that releases official GDP data on a monthly basis. In the first four months of 2014, real GDP in Canada has risen 0.2 percent per month on average. The consensus forecast anticipates that output rose 0.3 percent in May relative to the previous month, which would represent a slight firming in the pace of economic growth in Canada. Although a breakdown of monthly GDP into its underlying demand components is not available, quarterly GDP data show that the slowdown in Canada over the past two quarters is due largely to weakness in investment spending and exports. Growth in consumer spending has largely remained solid.

A manufacturing PMI, which admittedly does not have a long history, is on the docket on Friday. The PMI may shed some light of the state of the Canadian factory sector in July.

Previous: 0.1% (month-over-month) Consensus: 0.3%

Eurozone CPI Inflation bull; Thursday

The policy objective of the European Central Bank (ECB) is to maintain CPI inflation below, but close to, 2 percent over the medium term. The ECB Governing Council seems to believe the current rate of inflation (0.5 percent in June) is not close to 2 percent as it has eased policy recently. We look for the CPI inflation rate in the Eurozone to rebound a bit in July, but we forecast that it will remain below 2 percent between now and at least the end of next year.

Also on the docket next week in the Eurozone will be confidence data for July (Wednesday) and unemployment data for June (Thursday). The index of economic confidence has trended higher since autumn 2012, although it has leveled out recently. The unemployment rate in the Eurozone has receded somewhat in the past few months, but it remains elevated at an eye-popping rate of 11.6 percent.

Previous: 0.5% (year-over-year) Wells Fargo: 0.8% Consensus: 0.5%

Point of View
Interest Rate Watch

Fed Steady as She Goes

The FOMC meets again next week, but the gathering is likely to be uneventful. With no press conference following the meeting and an almost certain timeframe for ending QE, there will likely be little new information gleaned on members latest thinking. The area of most interest will likely be any changes to the Committees assessment of the economy. The second quarter GDP figures will be released before the end of the meeting, and we expect to see only a partial rebound from the first quarters contraction. Therefore, the overall tone on the economy is likely to remain cautious.

Rising Inflation Unlikely to Change Feds Tune Anytime Soon

Inflation has continued to move higher since the FOMCs last meeting. This week another increase in the CPI kept the yearover- year pace at 2.1 percent, which should be a comfortable rate for the Fed. That said, over the past three months, CPI inflation has been running at a 3.5 percent annualized rate. We still doubt that the recent acceleration will be enough to change the Feds tune, particularly Chair Yellens view. First, a sizable factor in the pickup of inflation has stemmed from food prices and, more recently, energy prices. Therefore, members will likely chalk up the recent rise as transitory. Second, real weekly earnings have slipped 0.1 percent over the past year, which may raise concerns over the strength of consumer spending.

That said, core inflation has also turned notably higher in recent months, rising at a 2.5 percent three-month annualized rate, and should run north of 2.0 percent over the next year. In addition, the erosion in real wages is due to the higher rate of inflation, not a decline in nominal earnings. Moreover, wages are a lagging indicator and other measures of the labor market have shown noticeable improvement in recent months. Even as policy looks to be set on auto-pilot for the remainder of the year, we believe the FOMC will start shifting its rhetoric toward tightening later this year.

Credit Market Insights

The Growth of Nonrevolving Credit

Typically in the wake of an economic downturn, the growth of consumer credit exhibits a healthy rebound as the economy improves and people feel more secure about their financial situation. Five years into the recovery, however, credit growth has been uneven across different loan types. Despite the severity of the most recent downturn, revolving credit, primarily made up of discretionary spending on credit cards, remains 15 percent below its previous peak. Tighter lending standards and weak wage growth during the recovery appear to explain a large portion of this unusual pattern.

Nonrevolving credit, which includes fixed lines of credit like student and auto loans, has exhibited significantly more robust growth in recent years. Record-low rates for auto loans have unleashed pent-up demand and spurred the June auto sales figure to 16.9 million on an annualized basis, the highest reading since 2005. Similarly, outstanding student loan debt reached $1.11 trillion in Q1 2014, 82 percent higher than it was in Q3 2008.

While the impact of this growth in nonrevolving credit remains unclear, this rapid increase may weigh on other forms of consumer debt, such as mortgages or revolving credit, further limiting their future growth. (For further reading on this subject, see our special report entitled Will Credit Help the US Consumer in H2- 2014? available on our website).

Topic of the Week

Russian Economic amp; Financial Leverage

The recent downing of Malaysia Airlines Flight #17 has reignited the tension between the West and Russia over Ukraine, creating potential economic risks to both sides. In a worst-case scenario, Russia has the potential to implement an energy embargo, cutting off energy exports critical to the European economy.

Numerous European countries rely heavily on Russia for their energy needs. Germany imports a third of its natural gas and 37 percent of its oil from Russia, and other western European countries exhibit a similar, albeit lesser, percentage. Eastern Europe maintains an even larger share of energy exposure to Russia. For example, all of the crude oil imports in Hungary and the Slovak Republic are sourced from Russia.

The economic costs of such an embargo would weigh heavily on both sides. With minimal domestic production, an embargo would likely plunge continental Europes already weak economy into recession. Such a move, however, would not come without significant costs to Russia. Energy exports to Europe and the rest of the world account for approximately 20 percent of Russian GDP.

Some analysts have suggested that Russia could intentionally induce a default on its debt, thus punishing western creditors and pressuring western governments. Given Russias $727 billion worth of external debt, this strategy appears plausible. After digging into the data, however, Russian authorities only have direct control over $78 billion of that debt. Private Russian firms owe the rest of these obligations, although it is an open question as to whether the Russian government could force a private Russian firm to default on its debt. While it remains to be seen how this crisis will play out, understanding the economic repercussions of these geopolitical events remains important going forward.

Millennials are buying more homes than you think

A record plunge in the South pushed down new home construction in the US last month. Housing starts in June fell 9.3% to an 893,000 annualized rate. Commerce Department figures indicate that is the lowest in nine months. Building permits fell as well.

“Single family home construction is still way below normal levels but there’s been a boom in apartment construction.” says Jed Kolko, the chief economist at the real estate website Trulia. But in the case of the latest report, both metrics plunged last month.

The figures bear out Federal Reserve Chair Janet Yellen’s view that progress in the housing market has been “disappointing” this year, as she told Congress this week during her semi-annual testimony.

Prices are up as well, hurting people’s chances of purchasing an affordable home. The median selling price of a new home sold in May increased 6.9% from a year ago.

Despite that, Kolko says he is seeing a rise in homeownership among millennials. According to data Trulia has been tracking, the share of 18-34 year-olds who became homeowners rose 0.9% in 2013. That’s in contrast to the latest Census Bureau data that shows ownership is still falling for young adults, down 0.1% year over year.

But Trulia’s data saw an uptick in home ownership last year for millennials. Demographic shifts account for the change. The rate of young adults who head their own household rose in 2013, back to the highest level since 2010. Kolko says more and more young people are starting to move out of their parents’ homes as they go on to rent and buy.

He is more concerned that middle-aged folks are not getting into the market. He says he sees a drop in homeownership among 35-44 year olds as “they really bore the brunt of the foreclosure crisis; they were the folks buying homes at the beginning and middle of the bubble, and they’re also the [group] of people who lost homes during the crisis.” Kolko concludes that to get the housing recovery really back on track- you need the missing homeowners – the middle-aged buyers.

Milanee Kapadia is a freelance contributor to Yahoo Finance. Follow her on Twitter @MilaneeKapadia.

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Visa earnings climb in Q3

Visa said its fiscal third quarter earnings rose 11 per cent, helped by what it called strong global payments volume and processed transactions.

The company said as expected, revenue growth was affected by a strong US dollar and tepid growth from cross-border transactions. Visa expects some of the headwinds will likely continue in the short-term but predicts new technologies and new relationships with financial institutions and merchants will help double-digit revenue growth over the long-term.

Helping Visa, spending on credit and debit cards has been strong as consumers migrate from cash and checks to electronic payments. Visa and competitor MasterCard dont issue cards or set interest rates, but they charge fees to financial institutions for transactions that travel over their networks.

For the period ended June 30, Visa reported a profit of $US1.36 billion ($1.44bn), or $2.17 per Class A share, up from $1.23bn, or $1.89 per Class A share, a year earlier. Revenue increased 5 per cent to $3.16bn.

Analysts polled by Thomson Reuters expected per-share profit of $2.10 and revenue of $3.15bn.

Like other credit card firms, geopolitical events can pose a threat to consumer spending with Visa finance chief Byron Pollitt in April saying that the company had seen a drop-off in cross-border volume due to the situation in Russia and Ukraine. Last week, however, the company said new US sanctions against Russia wouldnt impact operations.

The company said cross-border volume growth on a constant dollar basis was 7 per cent for the quarter.

Visa said it now expects full-year earnings per share growth of 17.5 per cent to 18.5 per cent, compared with April guidance for mid-to-high teens. growth.

Earlier Thursday, Visa announced Visa Digital Solutions, an initiative geared toward secure payments using mobile phones and other devices.

Bad Credit Auto Loans Now Possible With No Money Down Through Complete …

Car shoppers can now get instant approval loans even with bad credit through the popular lending network.

Seattle, WA (PRWEB) July 18, 2014

Americas most trusted lending network is now making it possible for car shoppers to get instant approval on bad credit auto loans. Complete Auto Loans as expanded its approved lenders to help more shoppers with bad credit history get approval for their auto loan needs.

https://completeautoloans.com/application-form/ – Get approved for a car loan in as little as 60 seconds.

Approval is simple. The only requirement, regardless of credit score, is that applicants make at least $350 per week. Applicants can get instantly approved by simply filling out the online application. Once filled out, Complete Auto Loans will match them to a local area lender who is able to get them the auto loan they need.

As an extra service, Complete Auto Loans also provides a complimentary online credit score tool which has helped drivers save thousands of dollars. Upon completing the easy online car loan application, applicants are given the opportunity to save thousands of dollars on their loan. For more information, visit Complete Auto Loans’ website.

About Complete Auto Loans

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For the original version on PRWeb visit: http://www.prweb.com/releases/bad-credit-auto-loan/no-credit-check/prweb12028463.htm

Muthoot financing for Maruti cars

Muthoot Vehicle and Asset Finance Ltd (MVFL) has tied up with Maruti Suzuki India Ltd to provide vehicle finance for Maruti cars.

The finance scheme — Muthoot Maruti Gold to Car Scheme (MMG) — will give customers the freedom to get 100 per cent on road financing for their vehicles across Kerala.

The vehicle would be funded by MVFL Ltd and the down-payment financed by Muthoot Finance on gold collateral.

This initiative has been launched keeping in mind a large segment of the consumer base who cannot arrange for an immediate down-payment for vehicle purchase, Tarun Garg, Vice-President (Sales), Maruti Suzuki, said.

To start with, the scheme will be introduced in Kerala, and subsequently to other markets, he said.

Speaking on the occasion, George Alexander Muthoot, Managing Director, Muthoot Group, described the scheme as a trendsetting product for customers.

He said it will benefit salaried customers, business profile customers, agriculturists with the capability to repay the loan, and NRIs with suitable guarantors.