The 30-year fixed rate mortgages are currently being financed at 4.94 percent. This is the lowest rate seen since 18-December-2009. The numbers were released by the Mortgage Bankers Association and are cause for concern. They clearly show consumers are still struggling or unwilling to spend money which is not surprising since the unemployment rate remains at 10 percent nationwide.

The number of applications for new home mortgages and refinanced mortgages declined by 1.2 percent for the week ending 5-February-2010. The interest rates on 30-year fixed mortgages have not fallen below 5 percent since December, and it had been hoped the low interest rates would spur the housing market.

The one glimmer of hope is that this may be a temporary decline and the number of applications will begin to trend upward again. The lowest that mortgage rates have fallen over the last twelve months is to 4.61 percent in March 2009. The prediction is that mortgage rates will increase on 30-year fixed mortgages to 5.5 percent by the middle of this year.

To stimulate the economy, the Federal Reserve has been buying mortgage-backed securities and that program is ending in March. Ending the program probably means that interest rates will begin to rise because the securities purchases worked to lower borrowing costs. The mortgage industry has been in a 3-year slump as housing prices continue to fall.

Despite signs of a recovery, it is clear that the U.S. economy has a long way to go before it will be on even ground again. In the fourth quarter of 2009, one out of every five U.S. homes was underwater. This means the mortgage is more than the market value of the house. There is still ongoing debate between the banks and the government policymakers as to how the banks should remove the inflated assets from the balance sheets.

The number of foreclosures continues to rise too. Consumers are cautioned to be alert to possible scams. There is a dearth of mortgage relief companies offering consumers assistance with getting their mortgages modified. The companies require a fee up front for their services and then fail to deliver help.

The Federal Trade Commission has proposed new rules that would ban these mortgage relief companies from charging up-front fees. They would not be allowed to charge a fee until services were provided as promised.

The total number of mortgage applications for the first week of February was made up of 69.7 percent refinancings with the balance being new mortgage applications. The 15-year mortgage rates are low also at 4.33 percent.

With the start of the New Year and the approach of tax filing season, it is the perfect time to evaluate your financial condition and making sure there are no signs of identity theft, begin planning to improve your credit history, and correct errors. For millions of Americans this means looking back at what was an extremely difficult year and half. The economic recession led to many black marks on credit reports because of foreclosures, late payments on credit cards, and loan defaults.

Unfortunately there are also millions of people right now who are facing collection agency efforts to collect past due funds. Businesses are making use of collection agencies sooner than they did in past years as the number of late payments and defaults rise. Though the law prohibits the abusive actions they used to be known for utilizing, collection agencies remain persistent and unrelenting in their demands for payment.

There are many reasons beyond checking the status of defaults on debt for verifying your credit history. People who have changed addresses sometimes fail to get statements and notices from debtors. Right now credit card companies are busy changing their interest rate and fee policies ahead of the implementation of the Credit CARD Act that places limits on these activities. One late payment is all it takes to see your interest rate double or triple and to be charged an exorbitant late payment fee. The fees for over-limits are skyrocketing too.

For all these reasons, now is the time to review your credit report. Each consumer is allowed to request a free credit history from one of the major credit bureaus each year. With the credit history you can check for the number of late payments, closed accounts, unauthorized use of your name and social security number to obtain credit, and outstanding balances compared to available credit. Any questions you have should be directed towards the company which means making a telephone call or writing a letter.

The credit history is a snapshot you can use to look for errors and identity theft. It is not your credit score though. Many consumers don’t understand this and are surprised they are unable to get their credit score until they pay a fee. The law only says you can get a free credit history or credit report.

There is only one place to go to collect your free credit report. Consumers should go to AnnualCreditReport.com and request the report. In some cases, you will be asked to download a form from AnnualCreditReport.com for completion and mailing. The site will ask you a couple of questions that you should be able to answer to confirm your identity. If your answers do not match what the site expects as the correct answer then you must mail in a form with proof of identity to get your free credit report. The fact you cannot answer the questions as expected does not necessarily mean there is a problem. Companies (like mortgage companies) are constantly merging and being bought out, and you may not be aware the name has officially changed for example. So don’t panic if the website asks you to download and mail in a form.

You can also call (877)322-8228 and request your free credit report.

One of the advantages of requesting your free credit report through AnnualCreditReport.com is that you will not be asked to buy any other services or products.

The New Year is the perfect time to get your free credit history and start the year fully informed about your credit status.

Can you say how one credit score is different from another? You may know the number, but now you are about to learn what that number means.

720 And Up

A credit score of 720 and up is good news. You’ve taken great care of your credit. You will be able to get your hands on the best lending rates and you will be able to borrow large amounts. You may even be permitted to borrow in excess of 80% of the total value of your home.

More than that, you may not even be required to purchase private mortgage insurance.

You will also be able to get fantastic deals on credit cards. Shop around. With a credit score in this range you should be able to secure an interest rate that is well below the norm.

Between 675 And 719

When you are in this range, you are no longer the most favorable borrower but you’re still in pretty good shape. You will not be getting your hands on the best rates anymore but you will be able to find some good deals. Finding a loan should not be a problem. You are going to be a step below those who find themselves in the top category but you are still in a position to get what you want and to do so while receiving good deals.

Between 620 And 674

Now you are moving down the credit score food chain. No longer in the upper categories, you now find yourself amidst the below average credit score holders. This is where the number of options available to you will begin to dwindle to some extent.

Odds are, you will be paying a premium on any loans that you acquire as well. You will have to work harder to get loans and credit options that are not as good. You may be required to furnish more documentation to prove your viability as a borrower.

This is not a terrible position to be in. From this vantage point, you can see better credit scores and start working you way back into the good graces of credit. Demonstrating your commitment to improving your credit score will help you to secure better credit opportunities in the future.

620 And Under

This is the credit score range that can make life difficult. You are not exactly an appealing borrower at this point so you just need to do the best you can with the options you are offered. With a credit score that is this low, you are going to pay more even if you are approved for loans or other forms of credit.

Understanding what your credit score means is essential. You want to know the advantages of your credit score or the obstacles that may come along with it. Understanding the effect that your credit score will have on your life may inspire you to improve it too. At the very least, you will know where you stand.

What You Will See On Your Credit Report

You will see an assortment of information on your credit report. It will begin with some of your basic personal information. This will include your last three addresses. You will also be looking at a full list of any businesses that have run credit checks on you as well as a comprehensive list of all your credit accounts. Your credit report is a general overview of your credit history. Now you need to know exactly what to check section by section.

Basic Personal Information

You just want to make sure that the names and addresses listed on your account are correct and up-to-date. Mistakes in this information could indicate that a simple error has been made or that someone is using your credit accounts for themselves. Just make sure all the information is accurate and current.

Credit Account Information

The information for each of your credit accounts will be listed here. You will need to review the balance for each account, when the account was opened, and the credit limit. If you had any late payments then the details will be listed. If you see any late payments that were, in actuality, not late then you will need to follow up on them.

If you see any suspicious activity in any of your accounts then go back and see if the activity really is fraudulent. If it is then you will need to take action immediately. You never know when someone could be taking advantage of your credit accounts for their own financial gain. Checking your credit report is one way to get wise to the situation.

Credit Inquiries

This section, clearly, lists all the inquiries made regarding your credit. It gives you a chance to see who received your name and credit information. This section will show you a record of all the times that you applied for new credit or when your credit was checked by others such as potential employers or insurance companies.

A Basic Overview Of What To Check

In short, you will just be going section by section and scrutinizing all the details to make sure that they are correct. It is not a difficult process usually. It just takes some time. Doing so can help you to rectify any genuine clerical errors that were made on your credit report or any fraudulent activity that is revealed on this report. Your credit report is just a tool for you to make sure that all your credit information is listed accurately and so that various businesses and agencies can determine if you are a suitable candidate for credit or other opportunities.

Your credit report is in a constant state of flux because new credit information is always finding its way back to credit bureaus. One small mistake or faulty bit of information can have dramatic consequences. This is why you always need to know what your credit rating is and that it has been calculated with accurate information.

What recovery?

Statistically speaking there is a recovery in progress. Government officials reported that the U.S. economy has grown by 5.7 percent on an annualized basis during the fourth quarter of 2009. That rate more than doubled the third quarter 2009 rate which was at 2.2 percent.

For consumers though the question concerns when the growth in the Gross Domestic Product (GDP) will equate to new job creation. With the U.S. unemployment rate at a staggering 10 percent, millions of Americans are looking for work. In fact, the 10 percent rate does not even include those who are under-employed and those who have quit looking for work all together. Add those people into the equation and unemployment actually approaches 18 percent or higher.

So when will the expanding economy actually benefit consumers? Unfortunately economists believe the high GDP growth rate in the fourth quarter was a perfect storm of one-time factors. These factors include restocking of inventories at the start of a new year and government stimulus spending.

Both of these factors are temporary and when activity ends…so will GDP expansion for the most part. What is not known is how much these two factors contributed to the 5.7 percent.

What this all means for consumers is that new job creation is expected to remain slow. In fact, many economists are predicting the economy will be in an upswing through the middle of the year and then fall back. As long as businesses believe expansion is temporary, they are not going to add employees to their payrolls. It is really as simple as that in terms of jobs.

If consumers don’t find jobs and credit stays tight the economy is not going to rebound. That is also a simple fact. Consumers must spend in order for the economy to improve. Not all economists believe the economy will stall though. Some believe it will continue to grow through 2010 as long as the government does not do anything to throw a monkey wrench into the works.

Currently, interest rates are expected to remain low. And the government has introduced a new program to give businesses a $5,000 tax credit for each new employee added. Small businesses are key to job growth.

Unfortunately, in order to generate the hundreds of thousands of new jobs needed each month, to recover from a loss of over 7 million, the economy needs to grow at a fairly fast pace. But predictions are that GDP expansion will grow at 3 percent or less and that is not enough.

So in 2010 consumers face more of the same – the same being continued high unemployment and tight credit – for at least another 6 months and maybe longer. That is not news the unemployed want to hear, but it is the unvarnished truth.

The statistics the Census Bureau collected are grim. Unemployment rates for families with children have doubled in the last two years. In these same families there were 6 percent of the husbands unemployed and 4 percent of the wives. Among the unmarried parents, the unemployment figures are much worse. There were 16 percent single fathers unemployed and 8 percent single mothers.

Buried in these numbers is the fact that in families with children there were fewer homes where both parents worked and it was because more men were unemployed. In 2009 there were only 59 percent of married couple households where both mother and father worked.

The Census Bureau also looked at figures based on race. Among African-American married couples, there was 12 percent reporting that only the wife was employed. In fact, many stay-at-home moms have had to enter the job market to support the family as male unemployment rose.

The Census Bureau also looked at how many children live in a two parent home. Among Asians, the rate was 85 percent. Among the non-Hispanic whites, the rate was 78 percent. Among the blacks, the rate was 38 percent. Among the Hispanic households the rate was 69 percent.

The recession has led to many households combining resources. Children graduating from college have had to return home upon graduation after being unable to obtain employment. Families are sharing homes and apartments to cut expenses in half. The ways people are surviving through the recession are often innovative too. There are families living in tents and campers in trailer parks after losing homes to foreclosure.

As the economy recovers it is hoped that jobs will become available. But that is not going to happen quickly. The Federal Reserve has issued a report that indicates unemployment will remain high into 2011 and possibly 2012 with high being in the 7 percent to 9 percent range. Unemployment is still at 10 percent, but even that number does not include those who have given up looking for a job after collecting unemployment for months.

The government is planning on funding additional stimulus programs that are intended to create new jobs. For example, funds are being released that are intended to create “green” jobs such as for home weatherproofing. Only 20 percent of stimulus funds were actually committed in 2009 and there will be a much larger percent issued in 2010 creating a bell curve.

Of course, for consumer struggling to endure unemployment the promise of government jobs is ringing somewhat hollow. The recession is now 2 years old and many households are living on unemployment benefits that have been extended several times. What happens when the extensions end? Their message to Washington is really quite simple: we need jobs.

There has also been a lot of negative publicity aimed at credit card companies pre-empting the law by raising interest rates and fees. The reason for the high rate increases now is because the new law limits when and how the credit card companies can change customer interest rates and fees.

Through all of this it is easy to lose sight of the fact that consumers have a responsibility to manage their credit cards. The new law takes effect in February 2010 but customers can begin right now to manage their credit card debt. One thing that has confused many people is having their credit lines reduced even when they have an excellent payment history. This has just been one of the many consequences of the rule changes being absorbed by the credit card companies. So consumers need to understand that even in these types of situations, it is still incumbent on them to manage their debt responsibly.

Consumers can minimize the chances of having their interest rates increased or their credit limits decreased by lowering the balances on their accounts and making timely payments. And the wider the difference between credit limits and credit used, the better for the credit score.

If you want to avoid having a credit card cancelled, you need to use it periodically to keep the account active. Credit cards not used by customers have no value to the credit card business. You also have to watch out for inactivity fees that are currently being implemented in advance of the Credit Card Accountability, Responsibility and Disclosure Act.

When you get a credit card statement, it is important to read it carefully. The new law requires credit card companies to give customers and opt-out option for cards when rates are changed. Since many companies are making changes now in advance of the new CARD Act, it is important to keep a close eye on changes to your account. The types of changes that will be common include offers for over limit programs with expensive fees. The reality is the over limit programs are really not necessary if you manage your credit card usage in a responsible manner.

It is advisable for consumers to spend some time now to review their credit reports and scores. You should look at the open accounts on your credit report and decide if each account is necessary. When an account is closed, it will lower your ratio of available credit to used credit though. This is just one example of how manage a credit score.

The new Credit CARD Act is having some unintended consequences already as the credit card companies prepare to preserve their revenues and profits. Over the last ten years, consumers had become somewhat immune to credit card offers. Now it is time to actively manage the accounts, offers and terms.

Though the credit card scam targeted a particular group of people, there are lessons for everyone in the story. In this particular situation, union workers were sent offers for credit cards that had low interest rates. To obtain the card a fee had to be paid. The marketing material indicated that bad credit is not a problem. What was hidden in the fine print is where the scam is found.

The first deceptive practice is burying the information that the membership fee does not guarantee the credit card will be approved. The second deception was that approved credit cards could only be used to buy items out of a particular catalogue. The offer was presented as a regular credit card, but it was not.

The Ohio Attorney General Richard Cordray issued a public announcement warning union workers they are being targeted with this particular credit card offer requiring an advance fee. But he also provided valuable information for all consumers concerning how to avoid becoming a victim of a credit card scam.

First he advises people to reconsider accepting any offer that sounds too good to be true. Credit card companies are in business to make money and not to help people. AG Cordray also notes that guarantees a loan will be approved are probably not true. A legitimate financial institution is not going to approve a loan without doing credit checks first. The offers that come in the mail claiming that bad credit is not a problem should be looked at with suspicion.

There are other signs a company many not be legitimate. For example, if you are asked to send a membership fee to a post office box using overnight mail or wire services the chances are the offer is not legitimate. If you have never heard of the company then it’s time to do some research. Sending money to a company guaranteeing a loan or credit card that you are unfamiliar with is a clear path to being scammed.

You can research any company through the Better Business Bureau and the Attorney General’s Office. A legitimate company will have a business license and consumers can verify legitimacy fairly easily. It’s important to review complaints that have been filed against companies also. In the case of the union workers who are being targeted, many have filed complaints with the Attorney General’s office in Ohio so that others are not lured in by the offer.

Finally, you should never provide your personal bank account or other financial information to anyone unless you know for a fact the company is legitimate. Despite all the warnings constantly published, millions of consumers continue to give out their personal financial information to people and businesses they don’t know. To sum all this information up: it’s always better to err on the side of caution.

Non mortgage consumer credit has been falling at a steady rate. As of September 2009 revolving consumer credit was still falling and had hit a 13.3 percent decline when calculated at an annualized rate. Though it is good that consumers are reducing their debt load, it also indicates less spending and spending is what spurs the economy.

But the fact is that millions of consumers are now wondering if those black marks on their credit history will prevent them from borrowing money in the future. The answer is: maybe. But that should not stop consumers from working on restoring their credit. The economy will not be in a recession forever, and at some point people will want to start buying houses again and taking out loans. The consumer credit market is bound to loosen up in 2010 and beyond and now is the time to begin credit repair.

Unfortunately the credit rating companies really don’t care why consumers fell behind in their payments. They can seem a bit ruthless to consumers, but they are also trying to keep credit ratings unbiased. The fact is that credit repair can be accomplished, but it can take years. That means the sooner you start…the better.

There are a number of ways to restore credit over time.

Ask to have a statement added to delinquent accounts providing additional explanation that might be helpful to anyone looking at the report
Payoff any small balances as soon as possible and begin clearing up your credit report
Get a secured credit card if you have had credit cards cancelled in the past due to late payments or bankruptcy
Get credit through a retailer when purchasing something you can afford and re-establish a good account payment history
Accept department store or other credit cards but don’t use them except once a year to keep them active to create to create a positive “extended credit versus credit used” score (but don’t get too much credit either )

You will notice that the only way to re-establish credit is to create credit lines. It would seem that consumers with poor credit histories would not want to open credit lines. The difference is that consumers who once borrowed money they could not repay now need to create credit lines but not actually borrow the money (except for small charges to prove repayment reliability).

There is nothing quick about restoring credit and millions of Americans are now faced with doing just that. The good news is that it can be done and one day banks and financial institutions will want their business again.

You have heard all the typical ways of approving your credit scores at least a hundred times but these are not the only steps you can take to increase your credit score. Take a look at these new ways to improve your credit score. They could make all the difference.

Ensure That Credit Bureaus Are Aware Of Your Credit Limits

Most people assume that credit bureaus have all the information but this is not always true. Some credit card companies neglect to submit your credit limit along with the rest of your relevant credit information.

This could cause problems for you even if you do not have any credit problems to speak of. Without your credit limit as a reference point, potential lenders and others who check your credit score could be misled.

A high balance on a credit card is a relative thing. For example, $1,000 may be a high balance for a credit card with a credit limit of $1,200 but not for one with a limit of $10,000. If you take the time to make sure that each of your credit card companies reports your credit limits then your score will accurately reflect your situation. This can improve your credit score instantly.

Make Sure That All Your Positive Past And Current Credit Is Represented On Your Credit Report

You have taken the time to maintain your good credit but your credit report may not reflect this. Sometimes not all of your past and current credit information makes it onto your credit report. If these missing accounts of your credit history are positive and are omitted then your credit score may be lower than it should be.

The way to fix this is to request a copy of your credit report and to review it. If you find that information is missing then you will need to contact the appropriate lenders to ask them to submit this information to the credit bureaus. You also have the option of contacting the credit bureaus directly with documentation proving that your good past credit accounts exist. This move allows you to benefit from all of your good credit history. Without the benefit of all your good credit, any credit mistakes you have made will adversely impact your credit score more than they should.

Don’t Add Or Close Accounts Without Considering The Effects

You do not want to make these changes without thinking them through first because they could lower your credit score instantly. Applying for numerous new credit accounts can lower your credit score all on its own. This is why you never want to apply for new credit accounts unless they are completely necessary and you have weighed the pros and cons of this action.

Likewise, you don’t want to close credit accounts. This will lower your credit score by shortening your overall credit history and lowering your available credit. These tips are more about protecting your score but a credit score saved is a credit score earned.

Everyone can stand to know how to improve their credit. It will come back to haunt you if you do not maintain or regain a good credit score. Use these new ways to improve your credit score.