Home Loan Application Contact Us Staff Profiles Customer Login
Top 10 Credit Don'ts During the Loan Process

Many are taking advantage of interest rates at historic lows, either by re-structuring debt with a refinance or purchasing a new home. However, the recent economic crisis has created even tougher guidelines and credit requirements and there are some things that consumers must be aware of when applying for a loan.

Leading nationwide credit expert and President of Credit Resource Corporation, Linda Ferrari, developed the top 10 credit don'ts during the loan process, to help you get your arms around those things that can unknowingly wreak havoc on your loan transaction.

1. Don't do anything that will cause a red flag to be raised by the scoring system
2. Don't apply for new credit of any kind
3. Don't pay off collections or charge offs
4. Don't max out or over charge on your credit card accounts
5. Don't consolidate your debt onto 1 or 2 credit cards
6. Don't close credit card accounts
7. Don't pay late 
8. Don't allow any accounts to run past due-even one day!
9. Don't dispute anything on your credit report
10. Don't lose contact with your mortgage and real estate professionals

   What Does the Federal Reserve Do Anyway?

With the economy in the news every day, more attention is being focused on the Federal Reserve than ever before. 

The Federal Reserve System was created on December 23, 1913 by President Woodrow Wilson to act as the central bank of the United States. It was created to provide the nation with a safer, more flexible, and more stable monetary, banking and financial system.

The Federal Reserve System is made up of twelve Federal Reserve Banks, overseen by the Board of Governors. The Board of Governors is located in Washington DC and is comprised of just seven members, who are appointed by the President and confirmed by the Senate. 

The main responsibilities of the Fed include:

  • Researching US national and regional economies
  • Providing financial services to depository institutions, the US government, and foreign official institutions
  • Supervising and regulating banking institutions to ensure the safety of the nation's financial system and protect the credit rights of consumers
  • Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
  • Communicating information about the economy via publications, speeches, seminars and websites; including the statement given by Federal Chairman Ben Bernanke, following the eight formal meetings that take place about every six weeks throughout the year. At these meetings, the Fed has the opportunity to make changes to the Federal Funds Rate, and make their decision by reviewing economic and financialconditions. They can also make adjustments to the Fed Funds Rate outside of these meetings.

Overall, the Fed's main responsibility is to keep the economy growing at a steady pace by keeping inflation stable and rates moderate. When inflation is low and stable, businesses and households can spend, knowing that their purchasing power can remain strong. Upcoming Fed meetings for this quarter are scheduled to take place on August 10 and 11 and September 21 and 22.

  Are Safe Deposit Boxes Actually Safe?

We all have important documents and valuables in our homes that we want to protect from theft and disaster. For many people, safe deposit boxes at banks provide a safe place to store those valuables outside of the home. After all, file cabinets and even fire-resistant cases in your house are still susceptible to intense fires, water damage, and even theft.

But, did you know that safe deposit boxes may be susceptible as well? In fact, during the attack on the World Trade Center and Hurricane Katrina hundreds of bank vaults were damaged or destroyed. Worse yet, valuables stored in a safe deposit box aren't insured by the bank if damage or theft occurs.

And if you use a safe deposit box to sock away cash for an emergency, you may be surprised to know that a safe deposit box isn't completely protected. Law enforcement officers can get a court order to raid your safe deposit box, and if the IRS ever freezes your assets, that freeze includes your cash and valuables in a safe deposit box.

All this doesn't mean that you should hide valuables and cash in your closet or drawer...but it does mean you should take precautions and specific steps to make sure your valuables are protected if you put them in a safe deposit box.

If you have a safe deposit box or are considering getting one, the following steps can help you make sure your documents and valuables are protected: 

Call your homeowner's insurance company to make sure the contents are covered, especially when placing jewelry or collectibles of value in the safe deposit box.

Put important documents such as marriage licenses, car titles, insurance policies and family records in airtight plastic bags or sealed containers to help protect them from water damage.

Make copies of your important documents and store them at home or with your attorney, so you can access your information if something does happen to the originals. Remember, important legal documents such as wills and power of attorney documents should always stay with your attorney. You can place copies in your safe deposit box or keep them at home, if you want to have access to the information. But leave the originals at the attorney's office.

Make an inventory list of everything in your safe deposit box and keep the list in a safe place at home or in another location. You may even want to take pictures or a videotape of the contents just in case you need to show more proof if something happens. Finally, make sure you inform your family members and your attorney about your safe deposit box! Otherwise, the contents may revert to the state when you pass away.