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Geraldine Said:

How can you have a great financial credit score but a lousy home insurance credit score?

We Answered:

The length of time you have a credit account ADDS points to your score for every year. Additionally, for every two consumer initiated credit checks in six months, your score gets DECREASED by 20 points (mortgage is the exception - all mortgage inquiries within a 30 day period are treated as ONE inquiry).

Because of that, if you shop out your Mastercard every six months, to four different vendors to get the cheapest rate, and switch it over, you get ZERO points added, and 40 points taken away. Also, all those store cards where you "get 10% off if you open an account now" ding you 10 points a pop, if you add those dings to the shopping out the mc dings. All those 90 days same as cash deals, those are actually CREDIT ACCOUNTS.

So even if you carry a zero balance, have 10 store cards with $1,000 available each, two major credit cards with $5,000 each, you aren't getting any POSITIVE points added, but you have $15,000 available credit to subtract from your potential income.

Now, if you go to a company like Travelers, they WILL look at the raw data, and make exceptions - overridding credit score for "common sense". But that's the only company I know that makes exceptions like that.

If I were you .. . I'd cancel all the store credit cards. Stop shopping around the Visa/Mastercard, stick with one and keep it. Pay off the balance each month. And lastly, look for a small, regional insurance company that works through independent agents - try another agent! - for a quote without credit scoring, or an underwriter review.

Also, go pull a copy of your credit report (free at www.annualcreditreport.com) and cancel all those zero balance, open accounts! It could make a HUGE difference.

Charles Said:

Should I take out a home-equity line of credit to pay down my mortgage to eliminate PMI?

We Answered:

To eliminate PMI you have to get an appraisal done to verify the your equity. An equity line of credit is a variable rate based on prime rate. I believe it is around 7-8% right now. I personally feel PMI is ok becuse HELOC's are adjustable and you would end up paying more interest over time than insurance in most cases. You should contact your bank to see how and when eliminate you can stop paying this insurance (sometimes you cannot eliminate PMI for at least two years). If you calculate your interest payments on the HELOC to be less than PMI and you can pay the balance off quicker than having the insurance for two years then it's a winner.

Tonya Said:

How can I hope to get a mortgage, insurance or even rent a car with no credit history?

We Answered:

Credit cards are actually good for you.
The secret is never to carry a balance. By doing this you never pay interest.
And you develop credit.
Some people get a credit card and feel they can buy anything in sight and not pay for it for many years to come.
Interest charges will soon eat you up alive - therefore - the nightmare begins.

Get a card, pay it in full each month, get top credit.
Get one with no annual fee - and forget the interest rates - you'll never pay them if you pay in full.
Use your card for things you need like food or gas only.
If you need a major purchase, save up for it, then charge it, then pay your card in full that month.

DON'T fall for the insanity of paying only the minimum or anything less than full payment for what you spent - it will devastate and ruin your life.

If you have trouble getting a major card, try store cards, and gas cards - much easier to get.
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