How Often Does Your Credit Score Change?

This is a question we often get during the mortgage process.  A credit check may have uncovered some incorrect information, and you get it updated.  So how fast will it change?

What is a Credit Score

Per the reporting agencies (TransUnion, Equifax, and Expperian), your score is a snapshot of your current credit report as well as how many pulls you have had on your report.  For example, from Yahoo:

“Right now it’s 11:40 my time,” said Rod Griffin, director of public relations for Experian, when I interviewed him for this story. “Let’s say a lender requested your credit report right now. If you apply for credit (again) in an hour your credit report could be different,” he says, referring to the inquiry that would have been generated when the first lender accessed my credit information.

“Credit reports can change as often as every day if there is new information provided to the credit bureaus,” says Barry Paperno, community director for Credit.com.
If you want to be technical about it, you don’t really have a credit report on file with the credit reporting agencies to begin with. Explains Griffin: “We have information from each of the lenders, and we go out to our databases and compile information from those databases when a credit report is requested. Your credit report represents a snapshot of your credit history at any given point in time.”

That means that the information is available in the credit reporting agencies’ (CRAs) databases at the time a credit report is requested is the information that will be reported. “You don’t have a credit report until you apply for credit and it’s requested,” Griffin says.

But it’s not like checking your online bank account and seeing the debit card purchase you made a few minutes ago in your running balance. “It’s not real time,” says Griffin.

So What Do You Recommend?

• Set up payment reminders so you never have a late payment again.  Do remember that a lot of credit card companies want the payment a few days before the due date to have time to process it.  It’s not fair since they say it’s due on a certain date, but it’s best be a few days early.
• Set up automatic payments using online banking where you can.
• Reduce the amount of debt you  owe.
• Check your credit report annually.  You can get your free report here.  Now, this won’t give you a score unless you pay for it.  But you can at least look for mistakes which do happen.
• Get your credit report 3-6 months before applying for a major loan.
• Be patient.  It can take 30-60 days for information to be updated on a credit report after you’ve made changes (like paying off a student loan, or had disputed information resolved)

8 Surprising Things That Impact Your Credit

And what would a post be without some trivia.  This is from Credit.com blog:

1. Renting a car
2. Applying for credit (even when you aren’t rejected)
3. Disputing an account
4. Having credit cards, but no loans
5. Just a single late payment
6. Closing an account
7. Divorce
8. Late library books

What other questions do you have about your credit report and score?

What Happens to Your Donated Items

Many of us are addicted to watching Storage Wars.  In the earlier seasons, they’d show Dave Hester’s operation for sorting through all the massive amounts of items from his lockers.  He mentioned how he had to do some community service at a place like Goodwill and Salvation Army, and learned how they sort through donations, and applied that assembly line process to his store.

So, we bet you were wondering what happens when you drop off a box somewhere.

Types of Stores

While it can go by many names, the purpose of a thrift store is to sell donated items in order to fund a charity or a cause.  It’s often called hospice shop, resale shop, charity shop, thrift shop or thrift store.  In Australia and New Zealand, it’s called an op shop for “opportunity shop.”  These shops are staffed by volunteers.

For a directory of Thrift Stores, check out the Thrift Shopper’s National Directory.

If you have questions, ask at the front counter what cause they are supporting.  If they have none, you’re in a second hand store (like Dave Hester had)

Some religious and spiritual organizations also accept charitable donations, but they are more limited in what they accept.  The items are then passed out to the needy.  You should check directly with the organization for their guidelines.

 

What to Donate

First, find out if your organization accepts what you want to donate.
Here’s a list from the Salvation Army:

Clothing, Toys & Furniture Donations Dos and Don’ts

• Do test all electrical and battery-operated equipment to make sure it is still working prior to donation
• Do include all manuals, if available
• Do include all pieces and/or parts
• Do donate items in clean, non-soiled condition
• Do call ahead of time if dropping items off at a center or store
• Do bring an itemized list of your donation and ask for a receipt
• Do NOT donate broken or soiled items
• Do NOT leave items outside a collection box or center
• Do NOT donate items that have been recalled or banned or which otherwise
• Do NOT donate items that do not meet current safety standards
• Do NOT donate items that have scratches, rips and/or tears

 

Once It’s Donated

First, the items have to be sorted into type: clothing, household, furniture, etc.  From there, they evaluate if the item needs to be cleaned, recycled or thrown away.

The clothing then gets sorted into sizes and marked.

Then the item gets priced.

If it’s a large organization, they may have one central clearinghouse for donated items, and then try to ensure a good stock in each store.

What’s your favorite organization where you donate?

This Week’s Market Commentary

This week brings us little to drive bond trading and mortgage rates. There is only one monthly economic report scheduled, which is considered to be of low importance to the markets anyhow. That would give the appearance that we are in for a quiet week for mortgage rates, but I don’t believe this will be the case. There probably will be less activity and movement than we saw last week. However, I suspect that we will still end up seeing a fair amount of movement in rates between Monday’s opening and Friday’s closing.

There is nothing of importance scheduled to be posted Monday or Tuesday. This means that the stock markets will probably dictate bond direction there first part of the week. If the major stock indexes rally again, they will pressure bonds leading to higher mortgage rates. However, stock weakness should allow bond prices to rise and mortgage rates to improve.

Besides the sole monthly economic report late in the week, we also have two Treasury auctions that have the potential to influence mortgage pricing. They will be held Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would likely result in upward revisions to mortgage rates.

Also worth noting is some news from overseas before the markets open Thursday. The Bank of England’s monetary policy announcement (equivalent to our FOMC) will be released at 7:15 AM ET while the European Central Bank will announce at 7:45 AM ET. The ECB will draw the most attention as global investors are extremely concerned about the Eurozone and what actions will be taken to shore up some of its’ member’s finances. We should be on alert for a reaction in the bond and mortgage markets if they yield any surprises.

November’s Goods and Services Trade Balance will be posted early Friday morning. It measures the size of the U.S. trade deficit and is expected to show a $41.8 billion deficit. This data usually does not directly affect mortgage rates, but it does influence the value of the U.S. dollar versus other currencies. A stronger dollar makes U.S. securities more attractive to international investors because they are worth more when sold and converted to the investor’s domestic currency. But unless we see a significant variance from forecasts, I don’t believe this data will lead to a change in mortgage rates Friday.

Overall, it would be easy to say this will be a calm week for the mortgage markets due to the lack of important or highly influential events scheduled. I would not be surprised to see stocks move lower for the week, helping to push funds back into bonds. We saw some improvement in bonds late Friday, so if your lender did not improve rates during afternoon trading, you have an improvement of approximately .125 – .250 of a discount point waiting at Monday’s opening. That could shrink or get larger depending on how the markets perform during early morning trading, but there is a decent possibility of starting the week off in the right direction. With the benchmark 10-year Treasury Note currently yielding 1.90%, I believe there is more likelihood of seeing bonds improve (pushing yields and mortgage rates lower) in the immediate future than seeing them move lower (raising yields and mortgage pricing). Of course, this is just speculation and only an opinion, so please maintain contact with your mortgage professional if still floating an interest rate.