S & P puts future U.S. credit rating in doubt over spending budget

Doubt about the ability of politicians to agree on deficit reduction has resulted in a downgrade of the U.S. credit rating outlook by Standard & Poor’s. Partisan quarreling over the budget has impacted the long view. However, the existing top tier U.S. credit rating granted by S & P remains intact. Stocks across the markets fell on the news. Source for this article – S & P enters budget debate by lowering U.S. credit rating outlook by MoneyBlogNewz.

Issues deciding on budget hurt United States credit

Fighting over the budget has brought on several to look poorly on the United States credit rating. This has concerned Washington. Monday Standard & Poor’s lowered the U.S. credit outlook based on the risk that politicians could fail to agree on a plan to lower the federal spending budget deficit to sustainable amounts. Standard & Poor’s is one of three major agencies investors rely on to evaluate public and private debt scenarios. The risk an investor has when purchasing debt, which makes a difference in rates of interest, is determined based on the S & P. The United States long-term credit rating outlook dropped on S & P. That means “negative” rather than “stable” is now the status. The country’s AAA rating hasn’t been changed on S & P. The drop really just means that, without change, the country can have a downgrade in the next couple of years.

S & P move highlights risks of U.S. debt

The federal spending budget deficit has gotten to about 10 percent of United States GDP at $1.5 trillion which is something the Obama administration and Congress has been pressured to agree upon now that the long-term U.S. credit rating outlook from S & P was dropped. If allowed to continue growing at the present rate, the federal budget deficit could raise the cost of borrowing and further devalue the dollar, which would exacerbate the issue by degrading the government’s ability to finance the deficit. A long-term deficit reduction plan is not likely to be announced anytime soon. Most expect it will not come until the end of 2012 elections. S & P might lower the AAA credit rating for the U.S. if there isn’t a decision made by then. Such a move would send rates on mortgages soaring and trigger a relapse of the credit crunch, which would send U.S. economic recovery off the rails.

Treasury tries to deflect effect of S & P announcement

The Treasury Department said S & P’s decision to lower the long-term United States credit rating outlook to negative “underestimates” United States leadership. At a press conference in Washington, a Treasury official said the cost of borrowing is not expected to rise on news of the S & P downgrade and reiterated the soundness and liquidity of United States debt. The official said also that the S & P needs to let politics work on its own without making decisions depending on it. Before this comment, there was a drop in stock on Monday. In early trading, over 1 percent was lost. Blue chip stocks shed more than 200 points as investors worried that the S & P downgrade could increase the cost of financing growth worldwide.

Citations

CNNMoney.com

money.cnn.com/2011/04/18/news/economy/us_credit_rating_outlook_lowered/?section=money_latest

Reuters

finance.yahoo.com/news/SP-cuts-US-outlook-to-rb-384336593.html?x=0&sec=topStories&pos=main&asset=&ccode=

Bloomberg

bloomberg.com/news/2011-04-18/treasury-s-miller-says-s-p-outlook-underestimates-u-s-1-.html

Fox Business

foxbusiness.com/markets/2011/04/18/futures-extend-foreign-losses/

Stashing money at home backfires in Japan tsunami zone

In the aftermath of the Japan earthquake and tsunami, metal safes are being recovered from the debris. Individuals sifting through the rubble are finding safes and money that are being turned into authorities. The devastation and its aftermath; points to the danger of keeping large amounts of money around, even if it is in a safe. Article resource – Stashing cash at home backfires in Japan tsunami zone by MoneyBlogNewz.

Metal safes intact among the devastation

All of the cleanup workers after the Japan earthquake and tsunami are finding hundreds of safes with millions in yen in money. The safes recovered from the devastation are being stored by police. According to the Associated Press, the Ofunato police station has used the parking garage to store the safes. The department’s cars can’t even fit anymore. There may have been over 25,000 deaths from the tsunami. It is anticipated that several safes and parcels of cash are likely to go unclaimed. The Japanese law states that valuables can be stored for 90 days. This is the shortest they can wait. Everyone who finds it gets to keep the unclaimed money if nobody claims it. If nobody claims the money, the government takes it.

Too many safes full of cash

The money is something that could really benefit the Japanese government. Paying for earthquake and tsunami damages won’t be cheap. The estimate is at $309 billion already. The cash hidden that was lost was not integrated in that estimate that was only counting buildings, homes and infrastructures that were wiped out. There were several in Japan that didn’t feel comfortable with ATMs and other ideas. These individuals, mostly elderly, would stash cash in your house. According to Japan’s central bank, more than a third of 10,000-yen bills that are printed don’t circulate — about 30 trillion yen — about $354 billion at the current exchange rate. Old habits and convenience have led older Japanese, a growing segment in a rapidly aging population, to stash cash in safes, boxes and furniture. The idea of a savings account is inconvenient since there have been very low rates of interest.

Finding out what the safes hold

On Japan’s devastated northwest coast, more than 13,000 tsunami deaths have been confirmed as of April 11 and another 14,377 people are nevertheless missing. The safes and money have not all been found. More than likely, this will continue. Opening a safe is the easiest way to claim it if you own it. Matching a wad of cash with its rightful owner can be more complicated, if not impossible. Only 10 to 15 percent of anything found in the wreckage were returned in one of the hardest hit towns by the tsunami, Kesennuma. Storing the safes may be hard to do. As they run out of space, authorities can have to start opening them.

Articles cited

Associated Press

news.yahoo.com/s/ap/20110411/ap_on_bi_ge/as_japan_earthquake_lost_money

The Telegraph

telegraph.co.uk/news/worldnews/asia/japan/8443301/Japan-earthquake-police-handed-tens-of-millions-of-yen-from-devastated-area.html

Seattle P.I.

seattlepi.com/news/article/Debris-challenges-pile-up-in-Japan-1-month-later-1331227.php

Transocean execs contribute safety bonus after firestorm of criticism

Transocean, the proprietor of the oil rig that exploded and sank in the Gulf of Mexico doled out big “safety bonuses” over the weekend. Investigators have determined that Transocean was one of several companies liable for the Gulf oil spill. But the company said its safety performance last year was the best ever. After a firestorm of critique, Transocean declared the safety bonuses would be donated to the families of the 11 worked killed in the blast.

Safety bonuses in 2010 safety at Transocean

Transocean decided that there was a problem with safety in 2009 when four employees were killed on the job. This meant all executive bonuses were withheld “to underscore the company’s commitment to safety.” On April 2, Transocean gave out executive safety bonuses saying that safety was amazing last year. There were 200 million gallons of oil put, for 86 days, into the Gulf of Mexico while 11 individuals were killed at the Transocean Deepwater Horizon oil rig due to an explosion. Transocean justified the bonuses still: “Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record.” They used their total rate of incidents and severity to say, “we recorded the best year in safety performance in our company’s history.” To calculate safety bonuses, Transocean factors the rate of accidents per 200,000 employee hrs with a number that rates the severity of the accidents. Regardle! ss of the 2010 Gulf oil leak disaster, Transocean’s rate of accidents in dropped 4 percent from the season before.

Transocean negligence discussed

A few days after Transocean declared the safety bonuses, Interior Secretary Ken Salazar was in Mexico City with members of the presidential commission that investigated the British Petroleum oil leak to discuss offshore drilling regulation with Mexican authorities. The 2010 Gulf oil leak might have been avoided. This was declared by the oil leak commission in January. The disaster happened due to negligence and errors by Transocean, Halliburton and British Petroleum. Due to these three businesses, including Transocean, “the greatest season of pain” in deepwater drilling occurred in 2010. William K. Reilly, co-chairman of commission, called the Transocean bonuses “embarrassing.” To offset the PR destruction, Transocean issued an apology Monday for “insensitive” wording in the securities filing about the bonuses. Transocean said the top execs are donating bonuses on Tuesday.

Getting bonuses back won’t occur

According to the securities filing, safety accounted for 25 percent of Transocean’s 2010 executive bonuses. The top five execs received $898,282, about 45 percent of their targeted performance bonuses for the season. The safety portion of those bonuses totaled more than $250,000, which could be donated to the Deepwater Horizon Memorial Fund. Transocean has used the fund to distribute more than $1.6 million to the 11 families of the workers killed in the disaster. About $93,500 of that money comes from Transocean CEO Steven L. Newman. Last year, Newman made $6.6 million in all of the money he had coming in. The $650,000 in money Newman and his team can be keeping on top of the stocks and choices as “long term incentives” given away.

Articles cited

Wall Street Journal

online.wsj.com/article/SB10001424052748703806304576236661289767034.html

New York Times

nytimes.com/2011/04/05/business/05transocean.html?src=busln

Forbes

blogs.forbes.com/jeffmcmahon/2011/04/06/transocean-execs-keep-most-of-their-bonuses/

CNN

cnn.com/2011/US/04/05/gulf.spill.bonuses/index.html?npt=NP1

Rumblings of energy crisis begin as gasoline costs move higher

Distant grumbling about energy crisis has begun as gas prices approach record highs which were set several years back. Households and various industries are feeling the effects of the gas price hikes, which have been ongoing for weeks. The rise in price isn’t really going to likely subside, either.

Price of gasoline quickly rises 20 cents

The nationwide average cost of a gallon of gasoline has risen by almost 20 cents in the past few weeks. Between March 18 and April 8, gasoline went from $3.57 to $3.76 nationwide according to Reuters. In the last year the increase went up by about a dollar. In July of 2008, gas hit a record high at about $4.11. The costs have risen higher than that now. CBS reported that on April 8, California had a nationwide average of $4.14.

Flights will suffer from this increase a lot

The air travel industry is set to withstand a battering as the cost of jet fuel is increasing, according to CNN. The increase in the price of petroleum has caused jet fuel to rise to about $112 a barrel. The record was in 2008, when the cost of oil hit $150 per barrel and airlines took an enormous hit to their bottom lines. Shares of major airlines have begun to fall on stock markets due to the increasing cost of oil. On April 8, the stock price of Delta fell by 4 percent, Jet Blue fell by 5 percent and UnitedContinental stock fell by almost 7 percent. Experts fear the price of gasoline is not going to drop anytime soon due to unrest in the middle east. Airline tickets will only continue to go up as the cost of gasoline continues to go up in tandem.

Consumers are reducing their spending habits

Consumers want to do something about the increase in price. The Daily Finance reports that 70 percent of the nation’s gas stations have reported drops in sales. So although prices are rising, sales are decreasing. One way individuals are cutting back in gasoline is though the purchase of more economic vehicles. According to USA Today, hybrid vehicles sales this year alone have increased by 37 percent. The increase in price is leading to lower demand, as fewer individuals are willing to pay the increased cost of fuel.

Information from

Reuters

reuters.com/article/2011/04/11/us-energy-gasoline-retail-idUSTRE73929V20110411

CBS News

cbsnews.com/stories/2011/04/10/eveningnews/main20052599.shtml

CNN

money.cnn.com/2011/04/08/news/economy/American_Airlines_fuel_crisis/index.htm

Daily Finance

dailyfinance.com/story/drivers-hit-the-brakes-as-gas-prices-rise/19908875/

USA Today

usatoday.com/money/autos/2011-04-06-prius-tops-one-million-in-sales.htm

Child identity theft sufferers hurt most often by their family

Identity thieves have zeroed in on the most vulnerable. New research shows that identity thieves are focusing increasingly on children because parents do not pay attention and the theft can go undetected for years.

Identity theft hurtful towards children

There have been thousands already sufferers of identity theft while thousands more have the risk there nevertheless. A Carnegie Mellon University CyLab cybersecurity research center report explained this clearly. The report examined the identity protection scans of 42,232 kids conducted in 2009-10 by the Debix AllClear ID Protection Network after parents were notified their children’s IDs may have been compromised. The Debix AllClear ID data showed 4,311 of the children, just a little more than 10 percent, had their Social Security numbers in use by identity thieves. That’s a child identity theft rate 51 times higher than the 0.2 percent of U.S. adults targeted by identity thieves, based on 663 attacks against 347,362 adults listed in Debix AllClear ID. The youngest it ever got was a five month old. The identity was stolen nevertheless. A 17-year old girl from Arizona found she was $725,000 in debt with 42 open accounts including mortgages, car loans and cha! rge cards. There were eight individuals that had her Social Security number. A 14-year-old boy from Kentucky had a credit score going back 10 years listing a mortgage foreclosure.

It is friendly fraud with children

After child identity theft began in the early 1980s, it has come even farther. The Social Security Administration got orders from the Internal Revenue Service. It said that children should be given Social Security numbers to go with them. Everyone with access to the Social Security numbers would typically abuse them. Kids easily became sufferers of this. According to Javelin Strategy and Research, “friendly fraud” made up 30 percent of child identity theft cases in 2010. Because credit checks do not verify age, identity thieves can freely take out loans, get charge cards and create accounts. One young man in Florida got help after finding out his father had stolen his identity and hurt his credit years before from the Identity Theft Resource Center.

Child identity theft solutions

According to the Identity Theft Resource Center, every child should be taught out identity theft. They should know sharing information on the Internet isn’t always safe. All personal information, including Social Security numbers and birth certificates, should be kept in a secure place. Be worried about a child having had credit opened if mail comes in the child’s name. If you are a parent, gets a-hold of the major credit agencies. Get a credit report for the child. If no credit history exists, the child is likely in the clear. If you have a credit history for the child, file a security alert. Do this at TransUnion, Experian and Equifax. Use the credit report to file a police report also. A police report listing the fraudulent accounts obligates the credit reporting agencies to remove them from the credit rating within 30 days.

Information from

Forbes

blogs.forbes.com/moneybuilder/2011/03/31/protecting-your-child-from-identity-theft/

Atlanta Journal Constitution

ajc.com/news/child-identity-theft-increases-572552.html

Wallet Pop

walletpop.com/2011/04/05/report-as-child-id-theft-grows-rapidly-consider-these-precauti/

More people paying charge cards before mortgages

United States consumer patterns in payment of debts have experienced a sea change since the recession, states the Huffington Post. It used to be that ignoring a mortgage was unthinkable. Yet when the subprime home loan crisis put several homeowners underwater, addressing charge card debt seemed the more feasible choice, states the Huffington Post.

TransUnion has tracked the disturbing trend

It may be really bad if the housing market considers mortgage delinquency acceptable. This is what is starting to occur. About 7.24 percent of homeowners in the U.S. were, in the fourth quarter of 2010, paying their charge card payments but are late on mortgages, according to TransUnion. TransUnion reported that it was 7.4 percent in the quarter before that, although consultant Sean Reardon explained this is probably not good.

"(It is now) 72 percent higher than it was at the beginning of the Great Recession,” he told the Huffington Post.

Letting charge cards sit to pay mortgage payments does not occur very often. Only about 3.03 percent of U.S. consumers do this. This is the lowest in history for this category.

Turning the tide

Not coincidentally, TransUnion found that more United States consumers started to pay more attention to their charge cards than their mortgages just a couple months after the financial collapse started in 2007. The country, when becoming more dependent on credit than anything else, has had difficulty with unemployment and the poor housing market.

The growth in number of underwater mortgages is staggering. By 2010's final quarter, many Americans already had upside down mortgages. CoreLogic reports this involved 23 percent of Americans. That amounts to 11.1 million residential properties in negative equity; up from 10.8 million (22.5 percent) in the 3rd quarter of 2010. Another 2.4 million homeowners have less than 5 percent equity, making the total percentage of negative and near-negative equity mortgages 27.9 percent nationwide. But it hasn’t just been subprime borrowers choosing to pay their credit cards instead of their mortgages, notes Reardon.

“Initially it was,” he said, “but it spread across all risk segments. It’s now an issue at the national level.”

Articles cited

Corelogic

corelogic.com/About-Us/News/New-CoreLogic-Data-Shows-23-Percent-of-Borrowers-Underwater-with-$750-Billion-Dollars-of-Negative-Equity.aspx

Huffington Post

huffingtonpost.com/2011/04/06/americans-credit-cards-mortgages_n_842756.html

Refinance your mortgage and whittle down credit card debt

youtu.be/_8dg3Vkm1I8

Center for Responsible Lending has new report on payday loans

True to form, the Center for Responsible Lending has released a new report bashing pay day loans. The CRL is among the chief lobbyists against the payday lending industry, though it allies itself with other consumer credit causes. Payday lending, along with other credit products, will soon fall under the heading of the Consumer Financial Protection Bureau when it begins operating in a few months.

Loan companies in treble

Payday lending is often reviled as predatory, as opponents accuse personal loan companies of trapping people into vicious cycles of debt. If the practice were to disappear, it would make the Center for Responsible Lending quite happy. This is an advocacy group for consumers. Daily Finance states a new report on payday lending was released by the organization that said individuals tend to get into debt for more than just one pay period when taking out payday loans. The report is titled “Payday Loans Inc: Short on Credit, Long on Debt” and is available on the CRL’s website.

Lawsuits

Most payday lenders have to deal with lots of criticism. There tends to be a lot of regulation for them too. Some loan providers deserve it; the number of violations committed by personal loan companies as well as the number of lawsuits including class actions show that not all short term installment loans lenders are on the level. Even though interest rates cannot be controlled by the Consumer Financial Protection Bureau, many hopes the CFPB will put on a cap this year after coming into impact. The Consumer Financial Protection Bureau should not do something like this, according to the CRL.

Risk of credit

There is a lot of scholarly literature on credit products such as pay day loans. Apparently, it is common, after a consumer starts borrowing, to get into a lot of debt. For instance, the CRL report asserts that several people are indebted to a payday lender for one to two years. That’s better than 30 years, the length of the typical mortgage. That is also better than 10 years, the length of time that people are given to repay student loans. However, those debts do not have the stigma that payday advance have been bestowed with. Even though a person could be indebted to a charge card business for years and years, most people do not look badly at credit cards either.

Citations

Daily Finance

dailyfinance.com/story/credit/payday-loans-exposed-short-term-lenders-borrowers/19898661/

Responsible Lending

responsiblelending.org/payday-lending/research-analysis/payday-loan-inc.pdf

Help grads get jobs after graduation, mothers and fathers

It is a fact of life that college career centers rarely play an essential role in helping graduate get a career. Thus, university students have to be motivated, and parents have to be willing to help. The role of parents can’t be overstated here, argues Fox Business. With active involvement, the road toward student internships could be easier to travel. Post resource – Parents can help college grads secure internships by MoneyBlogNewz.

A good idea to do an internship

Most parents are hoping the college education their kids get will eventually pay off. Most university students do not know how to find a job after graduation while most colleges aren't actively connecting graduates with jobs. It can be hard for parents because of this.

It might help a student out to try out a job for a while in a student internship. It also could get a student closer to a job. Mothers and fathers can help graduates get internship opportunities.

Don't just rely on Facebook

Nothing is more significant that being face-to-face with an employers, although it can be helpful to use online social networking. Teaching kids how to network in person may really help them after college. Making a personal connection with someone cuts straight through the contact lists and sound bites. The "go-getters" are the ones hiring managers and industry organizations want to see. According to Woody Allen, "Eighty percent of success is just showing up." This is very true.

Online social media is something to consider. Fox business reminds you to not just forget about this. Social recruiting apps on Facebook like Branch Out and Career Amp are tools any social media-savvy student can use. Consider going to Internships.com for help. You may also want to online network with LinkedIn.

See who you know

Make sure you know people that you can call in favors for in significant positions. Mothers and fathers should not be afraid to call people they know if it means helping their graduates acquire an internship.

'Big Five’ for graduates to consider

In order to become a successful intern, the student career blog I Am Next suggests applicants apply the following:

1. Make sure your supervisor likes you. This is very important.
2. Make sure you work very hard.
3. Knowing what you're after is just as significant.
4. Get help from supervisor lessons. These can guide you.
5. Get a letter of recommendation before you leave.

Citations

Fox Business

foxbusiness.com/personal-finance/2011/04/04/parents-help-college-students-land-internship/

I Am Next

powertochange.com/students/careers/internship/

Student internships are a learning opportunity

youtube.com/watch?v=TpqJSflKaoQ

Citi changes check clearing methods to limit overdraft charges

Citi says it will refrain from gouging consumers excessively with overdraft fees when it starts clearing checks in reverse order. Financial reform rules allow consumers the choice of opting in or out of overdraft loan programs for debit cards, but the Dodd-Frank bill was written to exclude the same option for checking accounts. {On Monday Citi said it will stop the practice of milking overdraft charges from checking accounts by processing smaller checks first|By clearing checks written for smaller amounts first, Citi is keeping itself from stealing as much money as it has in the past with bogus fees|The lying, thieving bankers at Citi have chosen to restrain themselves from repeatedly charging overdraft fees by clearing smaller checks first|By clearing smaller checks first, Citi is essential taking away from itself the chance to charge its customers over and over for bounced checks. Resource for this article – Citi to give customers a break by clearing smallest checks first by MoneyBlogNewz|Citi is checking itself from charging repeat overdraft charges simply by letting smaller checks clear before a larger one sends the account into negative territory. Source of article –

More money taken by banks

In 2009, banks penalized consumers with overdraft protection on debit cards to the tune of about $20 billion. Because of overdraft on checking accounts, another $12 billion was charged by banks. bank lobbyists managed to get voluntary overdraft loan programs for checking accounts exempted from financial reform, however the FDIC is considering an opt-in requirement at smaller state chartered banks for overdraft coverage on paper checks and electronic payments. Before checking account coverage, Consumers Union suggests the consumer's permission should be what banks get to the FDIC. Consumers Union is a Consumer States non-profit publisher. The FDIC making these changes might hurt customers. You can expect other fees to be added on to Citi and Bank of America banks. When regulators respond, banks will discover other ways to make money for nothing.

Citations

Associated Press

finance.yahoo.com/news/Citi-to-start-clearing-apf-1510892963.html?x=0&sec=topStories&pos=main&asset=&ccode=

Consumer Reports

pressroom.consumerreports.org/pressroom/2010/11/consumer-reports-poll-only-22-percent-of-bank-customers-have-opted-in-for-debit-card-overdraft-protection.html

New York Times

nytimes.com/2010/03/10/your-money/credit-and-debit-cards/10overdraft.html?_r=1

People want same day loans, FDIC claims

Customers have made certain that same day personal loans are in "tremendous demand," claims FDIC chair Sheila Bair. They’re in interest in consumers, and for banks and credit unions, even if such organizations have been unsuccessful in offering the goods to these customers. Banks have tried to get in on the same day loans origination action – but not without complications, claims a GAO report.

Places other than banks to get cash advance alternatives

There are very different fees and terms required for payday cash advance alternatives that come from credit unions and banks. Because of this, they vary quite a bit from small lending outlet same day personal loans. Banks may not like what the GAO has done to try and explain the Dodd-Frank Act and FDIC changes have helped the willingness of banks to give out payday loans:

“Recent statutory and regulatory changes and FDIC initiatives may encourage more institutions to offer small-dollar loan alternatives to payday loans or expand their availability, but many consumers may still chose to use payday loans for their wide availability and relative lack of eligibility,” says the GAO report.

A two-year FDIC pilot program illustrated that without the involvement of charitable organizations or government subsidies, banks and credit unions have been unable to popularize cash advance alternatives. The consumer base for personal loans was excluded in the requirements for underwriting as well.

Use payday advance without concern of losing a job

The notion that taking out same day loans is harmful to one’s financial reputation is disproved in the GAO report. Federal agencies like the Department of Homeland Security, TSA and even the Federal Bureau of Investigations put applicants through an intense employment screening process that contains a thorough financial history. Credit reports are run and other financial evaluation tools are used.

The hiring process was not affected by short term installment loan use when deciding on high security clearance positions, the GAO explained. The point of this is to make sure there are no risky behavior patterns going on. Government employees have to show stability. If banks and credit unions could ever free themselves from the policy maze and judge same day loan applicants over a more broad range of financial responsibility, perhaps the institutions could sell personal loans directly to consumers.

Citations

Community Financial Services Association of America

cfsaa.com/about-the-payday-industry/myth-vs.-reality.aspx

Government Accountability Office

gao.gov/highlights/d11147high.pdf

Don’t live beyond your means, even with payday loans

youtube.com/watch?v=KjZBOCAgR64

Building credit requires the use of credit

Building a credit history is tough when a person can be denied access to credit because they do not have enough of it. If your credit rating is exceptional but you’ve been denied for a mortgage, for instance, it is most likely because you do not have enough active credit irons in the fire. Article resource – Understanding the down side of avoiding credit by MoneyBlogNewz.

Being too responsible can hurt too

Individuals who are super-responsible can never enjoy their own parties, and the same is true for customers who are monetarily super-responsible with their credit. Paying down student loans right out of the gate, avoiding excessive use of credit and generally living debt-free will save money in the long term, however some creditors do not view the credit-phobic kindly. There are some people that use credit, but have many choices to choose from. It can look bad to have credit inquiries too often though.

If you’re a serial credit card applicant or do not have a credit history, that is not always a good thing, claims Rod Griffin. Griffin is the Experian public education director. You will need to your creditors that you are able to manage several credit sources at one time, even mortgage lenders like it when this occurs.

Active credit necessary with paid off loans

Paying off loans early isn't a bad thing, in accordance with Griffin. Negative marks will stay on a FICO report for about seven years while good things stay for about 10 years. Some customers will pay off loans quickly. This makes some creditors less likely to lend. Some creditors will say no to a credit application just because there aren't three accounts open and active for about 24 months.

Do not use too many credit cards

It's a myth that college students who are just beginning to build credit should take on multiple charge cards. Used responsibly and in moderation, having one charge card or two is a fine path toward building credit.

Griffin states that this might change though. Credit bureau insiders see the new Charge card Act established under the Obama administration as a possible hindrance to young people's ability to build a credit history. The access that college students have is taken away. That means the opportunity students have to build credit is limited.

Using just cash can hurt credit

While you will not rack up revolving debt by living a cash-only lifestyle, you also won't build your credit. Make sure you’ve a credit account you pay on every month. If there is an emergency, look to installment loans or no credit check loans to help. While such goods do not traditionally report to the credit agencies – and hence don’t provide an opportunity to record optimistic marks on a credit score – they’ll enable you to keep away from building up excessive revolving debt on charge cards.

Information from

MSN

money.msn.com/credit-rating/raise-your-credit-score-to-740-weston.aspx

Yahoo

finance.yahoo.com/banking-budgeting/article/112152/dangers-of-avoiding-credit?mod=series-m-article-c

Understanding the Credit card Act

youtube.com/watch?v=UbIDOZz6CPw

Treasury kicks off small business lending with $53.4 million

Three states have qualified to get large money from the Treasury Department. Connecticut, Vermont, and Missouri are slated to receive an infusion of money. The Treasury Department has authorized $53.4 million worth of lending money for those states. All three states have created programs that are intended to stimulate $10 worth of small business lending for every $1 invested.

What you should know about the Small Business Jobs Act

About 50 percent of private-sector United States jobs are in small businesses while in the last 15 years, about 64 percent of new jobs came from these businesses. Small business growth has been encouraged by Congress in the U.S.. The Small Business Jobs Act of 2010 was created to do this. The Treasury gave some states $1.5 billion in loan guarantees with the Act. This was only for states that planned on using programs such as loan guarantees to invest in smaller businesses in the state.

Connecticut’s $13.3 million plan

Companies are able to get insurance loans in Connecticut because of the Treasury department funds. The Connecticut Development Authority, a government-supported financial group, will be using the $13.3 million investment to insure investment portfolios. Nineteen financial institutions could be given access to the CDA funds to be able to provide loans to smaller businesses.

Vermont’s plan for $13.2 million for smaller businesses

The Treasury only needs to give Vermont $13.2 million for its plan. It plans on getting $132 million in small business lending from that. There could be business loans given to four programs. They will act like bad credit unsecured loans, not payday loans, for the companies. And $3.3 million will go to the Small Business Loan Program, which provides loans that support purchase of fixed assets (such as equipment) for companies. The Technology Loan Participation Program will get $3 million; that program aims to increase IT and Bioscience businesses in the state. About $1 million will go to portfolio insurance to lend. Another $5.9 million will go to building in Vermont with the Commercial Loan Participation Program.

Using $26.9 million in Missouri

Missouri qualified for the largest loan guarantee of the three states, at close to $27 million. There will be two funds for the money to go into. Businesses with less than 500 employees get help from the Grow Missouri Loan Participation Fund. About $10 million will go to that fund. The Loan Participation Fund provides loans of up to $3 million to help state businesses grow. The final $16.9 million will create a new venture capital fund that will focus on high-tech startup businesses.

Articles cited

CNN

money.cnn.com/2011/03/22/smallbusiness/state_small_business_credit_initiative/index.htm

Small Business Administration

sba.gov/advocacy/7495/8420