Failing to fully repay a loan is bad. Why that happened -- carelessness, greed, or naive foolishness -- is relatively unimportant.
In certain circles there has always been plenty of discussion of credit reports and scores. But since the Great Recession, interest in the topic has grown to the verge of mainstream consciousness. Ordinary folks now routinely consider the credit score impact of their actions, including such esoteric issues as the undesirability of closing unused credit card accounts. (It increases the ratio of used to available credit, which is bad.)
But through all this it seems as if the underlying point of credit scores has been lost. It is not a game with arbitrary rules meant to keep consumers on their toes. Nor is it a measure of virtue.
If you are in the business of lending money, what you want to know about a potential borrower boils down to a simple question:
Deals can slide south with lenders pulling back-to-back credit profiles before a sale closes.
This post comes from Marilyn Lewis of MSN Money.
Surprise! Just when you thought your mortgage loan was in the bag, your lender is likely to pull your credit report again, just before your home purchase closes. For most, it's an annoyance. But for some buyers, a second check jeopardizes the entire home purchase.
The source of the extra scrutiny is a rule change by Fannie Mae, the government-run mortgage company that buys your loan from your banker. (Read Fannie Mae's .pdf document on its Loan Quality Initiative.) Fannie is trying to make sure it doesn't get stuck with more bad loans.
Kenneth R. Harney explains in this Washington Post article:
When I signed up for a credit card, I made some rules for myself.
I'm always reluctant to cover credit cards here at Get Rich Slowly. There are other sites that do it better. Besides, I'm still not wholly convinced they're a good idea. Plus, my wife -- who is always right -- told me the other day, "I don't like it when you write about credit cards. Credit cards are boring."
Still, in today's world, effective use of credit cards is an important part of personal finance. If you don't use them correctly, you can end up deep in debt. (I've experienced this firsthand.) But if you do use them properly, they can actually help your financial situation.
Joining the dark side
When I started Get Rich Slowly, I was a staunch supporter of the anti-credit card camp. I'd been stupid with credit cards when I was younger, and they were a big reason I found myself with more than $35,000 in consumer debt.
Couple combine environmental consciousness and frugal living to finance their dream nuptials.
Andrea Parrish and Peter Geyer wanted a nice wedding, but they didn't think they could save even the $3,800 they needed for a modest affair for 150 guests.
So they decided to raise the money by recycling aluminum cans -- 400,000 of them.
They'll say their "I dos" July 31 in Spokane, Wash., with their goal met, thanks to a little help from their friends, 1,487 Facebook fans, 247 Twitter followers, a blog and a media blitz that told their story from New Zealand to Italy.
Some prix fixe meals offer better bargains than others. How to decide.
Foodies hunting for a cheap meal want to know: Are Restaurant Week promotions a good deal?
These offers, which feature lunches and dinners at a low, fixed price, have taken the country by storm in recent years. Most major cities offer at least one, with many offering them seasonally. Now towns, counties, individual city districts and even entire states have banded together to offer them. There are also themed Restaurant Weeks where kids eat free, or to celebrate a particular cuisine or wine.
It's not surprising to see Restaurant Weeks taking off in the down economy, says Bonnie Riggs, the restaurant industry analyst for market research firm NPD Group.
The average cable subscription costs $900 a year. But you can cut the cable entirely and still watch everything you want.
Almost a year ago I moved into a new apartment and did something revolutionary: I didn't set up cable or satellite TV.
I was frustrated by the lack of choice (only one cable provider), lengthy contracts, and inexplicably high prices. As someone who watched a lot of television, this seemed like a truly difficult problem, but I resolved to find a way to see my favorite shows without paying a cable or satellite bill.
Fortunately, it was much easier than I thought.
Coupon for McCafe fruit smoothie, $10 gift card with purchase, and free e-reader apps are yours for the taking.
This week, the world of Friday food deals and freebies has gone high-tech.
Starbucks has joined McDonald's in offering free Wi-Fi all the time -- though that may be a mixed blessing if your Starbucks is as crowded as mine is now.
- Video: Time to cut the cable?
Forget hiking into the back of beyond. Pitch your tent a little closer to home.
"Even if you don't have the time, money, or inclination to load up the camping equipment and head to the woods, your kids can still experience the joy of a campout," she wrote in a post called "Recipe for a backyard campout."
And here's another good reason to try "roughing it":
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A WisePiggy.com poll found that many Americans, especially older ones, do little or nothing to protect their credit scores and reports. See why you should check your credit history.
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