Two new statistics have come out from Vantage Score, the new credit scoring model that advertises as being fairer and more realistic in scoring. Let’s look at what’s going on…

Stat #1 Credit usage is down. The average balance-to-limit ratio is 51%.

Down is good, so to all who are working to pay down your balances: way to go! You’re almost at a tier level for a higher score. But we want to see that balance 2% lower.

When you get your balance at 49% of the limit, then you should see a credit score improvement. So be encouraged and keep on paying off that balance. Below 50% is a marker on your way to your main goal.

Your main goal for credit card usage is to keep your balance at 0% or up to about 29%. If it’s at 10%, even better.

With a low balance-to-limit ratio, you gain credit score points. You do not have to use your credit card every month, once you have had it for at least six to twelve months, so if the balance is at $0 for awhile, that is fine.

To prevent the creditor from closing down your card and lowering your “credit available” number, do use your card at least once a year. Each creditor has its own rule about how long they’ll let you go without using the card before they shut it down, so you need to call and ask your individual card service department if you’d like to make sure.

When they shut down a card for non-usage, then oftentimes a person’s score goes down, because their overall “credit usage-to-credit available” ratio lowers. However, in situations where a person has an over-abundance of credit cards, then it is no problem. If that ratio goes from 19% to 15%, for example, I wouldn’t expect to see any loss of points.

Stat #2 Delinquent payments is up. This is bad news any way you want to look at it.

A late payment always hurts your credit score, and the newer the delinquency is, the more points you lose.

A credit card late payment is one of the most difficult negative items to get removed from a credit report, so never think it’s no big deal and you’ll dispute it later. If the late payment is factual, then you might be living with the consequences for a long time.

If your cash flow is down for the month so that you don’t have the funds in your checking account to pay the credit card, then take cash out of savings to pay it (if you have a savings account). Or do your best to sell something, or make some quick money via a side gig so that you can at least make the minimum payment before it goes late.

The way to use your credit card to best advantage is:

1) to maintain a $0 to low balance at all times,

2) to pay the full amount due with each billing statement (and never carry a balance month-to-month), and

3) to always pay on time.

If you’re working at paying down debt, good for you! You are on the right path. Keep going. When you no longer carry a balance, you’ll stop wasting money on high interest charges that go to mega-rich creditors — and that will feel so good!

Mortgage interest rates have already moved significantly lower over the past several weeks. Where they move from here will be determined by many factors – not the least of which is the next jobs report to be released next week.

After the weaker report for the month of July another tepid or even moderate job report for August would just about clinch a rate decrease by the Federal Reserve when they meet in mid- September.

Wait? The Fed has not already lowered interest rates? Then how come mortgage rates are going down already?

This is just a reminder that the Federal Reserve directly controls short-term rates. The Federal Funds Rate is the rate banks charge each other for short-term lending. How short-term? Literally, overnight. Banks are constantly getting deposits and making loans, and they are required to keep a certain reserve requirement each day.

Therefore, if they are short of this requirement, they may have to add reserves overnight. When the Fed changes the Federal Funds rate, certain short-term rates move automatically, for example the prime lending rate.

Long-term rates are indirectly affected by the movements of the Fed. However, the bond market trades every day just like the stock market.

Thus, while they are influenced by the Fed’s moves—long-term rates can move in anticipation of Fed activity.

For example, when the last jobs report was released, long-term rates such as mortgage rates moved down immediately.

Yet, short-term rates such as the three-month Treasury did not move nearly as much. Thus, if we have a weaker jobs report for August, mortgage rates may move down again.

But don’t expect rates to move down when the Fed lowers their Federal Funds rates because the markets would have already anticipated that move. That is, unless the Fed surprises the market and makes a bigger move than expected — such as 0.5 percent decrease instead of .25 percent.

Many thanks to Origination Pro for this post.

I couldn’t believe it! Experian notified me last month that my credit score dropped by 45 points. So I logged into my account to see what was going on. I had not been late or anything like that.

But I had made a large purchase on my JPMBC Visa card, and for that, they punished me. I’ll explain.

I had a planned $6,000 purchase. I had the cash, but I wanted to pay using my Visa card that gave me a lot of reward points, which translated into cash on future purchases. This was an unusual purchase for me, because I have a habit of limiting my balance below 15 percent of the limit. I also pay the entire balance each time the bill comes due.

But this special purchase took me to 91% of my $7,400 limit. Not maxed out, mind you, but over the 90% mark. You’d think that would be no big deal since I’ve paid on time every month for 20 years. But nope!

The almighty FICO thought that I should lose 45 points for the crime of making a one-time large purchase.

I rolled my eyes. I was annoyed. There was only one thing I could do.

When my bill came, I paid off the entire balance immediately. Like I said, I had the cash saved.

On Monday, I checked my credit score since it had been a month, and not only did I have my 45 points back, but they added another 3 points, too.

The 45 points was for having my low balance back (less than 15% of my limit) on my JPMCB card. The 3 extra points was because my SYNCB credit card went from 37% of the limit to 0% (paid off and not used). That’s my second credit card that I use only once every few months to keep it active. Mostly, it sets at $0.

I got my excellent credit score back, and I am happy.

Please note: I do not pay for credit monitoring. My credit reports are on freeze, so there is no need for me to pay for credit monitoring. In my opinion, paying $27/month for credit monitoring is a waste of money. I can see what’s going on with my credit for free, and no one can hack in because my accounts are frozen.

Next week I’ll tell you how I get a score of 814, so remember to keep a watch for that.

Before I became a published author, I attempted to follow the advice of getting articles published first to build a resume. This was in 2006 when mortgage rip-offs were rampant and lenders were doing bait-and-switch and piling on needless junk fees like crazy. I was a mortgage broker, so the greed was making me sick to my stomach.

I wrote an article exposing the scams and sent it to a financial magazine for possible publication. Next came waiting for a reply, which can take several months. While I was waiting, I thought I’d get started writing my book, which was truly my passion.

I finished the book, traveled from Seattle to a writers’ conference in New York City, and met my literary agent. My agent sold the manuscript to Wiley & Sons, Inc. My editor at Wiley was wonderful and helped me polish it into Mortgage Ripoffs and Money Savers. The book was released in 2007, sold in bookstores all over the country.

Radio Host Bob Brinker reviewed my book and gave it “12 stars out of 10.” Sales took off!

Then I received an envelope in the mail. It was from the finance magazine. It contained a short rejection letter: Thank you for your submission, but we don’t feel like the topic of mortgage rip-offs is relevant to our audience, because our readers have very good credit.” That made me laugh.

Too late, I thought. My book is already out and selling. Plus, it’s all over the news that people like your readers are getting financially hurt by the mortgage meltdown that is happening right in front of your eyes.

But the thing that made me smile the most is that even though my “practice piece” did not get published, my “real piece,” my book, did. It was ironic that I could write a book, get an agent and a publisher, and have the book out in stores all over the U.S. before my little magazine article could get a rejection.

What is your BIG dream? Go for it! Don’t worry about who ignores you, ghosts you, or disparages you along the way. What do they know, anyway? If you’re an expert on your topic, proceed with full confidence.

My first (now somewhat outdated) and current (new and relevant) mortgage books:

Two people won a free book for their photos in my first ever giveaway contest, “Animal with a book.”

“Lucky bear” with Mortgage Rip-Offs and Money Savers, my first book for home buyers. (The latest one is
Get the Mortgage You Want Like the Pros.)

Aspen with Repair Your Credit Like the Pros, book 1 of 2 in the credit repair series. (Book 2 is Repair Your Credit Like the Pros, DEEPER DIVE.)

The winners have been notified by email. They get to choose any one of my books for free.

If you have an idea for another book giveaway contest, let me know in the comments.

In the meantime, I encourage you to continue making progress on your credit and financial journey. So many readers have emailed me success stories, and I want you to be a success story, too!

I’d like to share with you another success story I received from one of my book readers.

She sent me the letter below with her name included so I saw it was genuine. Now her personal info is redacted for privacy, but look at this settlement!

The second sentence states it was settled in full. What that means is she paid the reduced amount they agreed upon, which was approximately 70% of the balance. 30% off is a successful negotiation, especially when the balance was fairly small at $500. (Some credit repair businesses don’t even negotiate for amounts that low. )

The paragraph below that states, “A request will be sent to the credit reporting agencies within 30 days to delete the tradeline associated with this account.” Perfect!

Using the strategy in Chapter 15, Repair Your Credit Like the Pros, she saved money and got a collection deleted from her credit report at the same time. BIG WIN!!

I will be giving away books — any one of my books that the winners choose.

One book for every five entrants.. If less than ten people enter, I’ll give away three books, so a 33% chance of winning.

To enter, take a photo of your pet (or any animal, even a stuffed animal will do) with one of my books and post it on your fave social media site. Then email me the link, or post the link in the comment section here.

Winners will be notified Monday, June 24th.

Here are the books you can choose from (English only; I don’t have easy access to the foreign translations.)

When Cathryn Drost-Hansen sent me this photograph of Aspen, first of all, I was bowled over by how cute he is, but it also made me wonder, how many smart pets are picking up tips from my books…?

There’s one way to find out — run a contest! So here is my first ever contest and book giveaway:

Post a photograph of your pet with any one of my books on any social media platform you like. Instagram, Facebook, TikTok, X, wherever. Then send me the link at askcarolynwarren @gmail dot com.

One in every 5 will win any one of my books — your choice of any that are printed in English.

Don’t have a pet? A stuffed animal will do nicely. Or borrow your neighbor’s pet, with permission of course.

Deadline is: MONDAY JUNE 24, 2024. Books will be given away at the end of the month.

To help inspire you, here is Aspen, who is now in the contest. I think he’s got his score over 700 now.

Books you can win (only English language books)