In this Issue: Senate Plans to Extend & Expand Tax Credit Just How Important is Your Credit Score? Mortgages: How to Make Sure You're Getting the Best Deal 5 Ways to Decorate for the Holidays (Please leave us a comment at the bottom of the newsletter.)

Senate Plans to Extend & Expand Tax Credit

The Senate now appears likely to pass a bipartisan compromise extending and expanding the $8,000 tax credit for homebuyers. The extension is believed to be a boost the housing industry needs to help pull it out of its two-year old downturn.

Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan called on Congress to approve three important measures to improve housing and the housing market for Americans: Extension of the First-Time Homebuyer Tax Credit for a limited period with strong anti-fraud measures, extension of higher loan limits for home mortgages, and secure funding for the Housing Trust Fund.

First, it must break a partisan stalemate over what other amendments might be offered to a pending bill that would extend unemployment benefits for 14 weeks in all states and 6 additional weeks in states with jobless rates above 8.5 percent.

The deal would extend the $8,000 credit for first-time homebuyers for sales contracts entered into by April 30, 2010, and closed within 60 days. It would also add a $6,500 credit for some owners of existing homes as long as they have been in their homes for five consecutive years in the past eight.

The income cap would be raised to $125,000 for individuals and $225,000 for married couples, up from $75,000 and $150,000, respectively. An earlier version of the compromise would have increased the cap to $250,000 for married couples.

The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefiting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor.

We'll keep you posted on this story as it develops and unfolds, keep checking our blog daily for news as it happens.
.

.

Just How Important is Your Credit Score?

Getting and keeping a good credit score is important in renting an apartment, buying a home, and most other finance-based ventures.

With creditors of all kinds more cautious than ever, you need an A+ application to land the best terms — and that means an A+ credit score, the number lenders use to judge your risk of default.

The most commonly used credit scoring system, called FICO, rates people from a very risky 300 to a pristine 850. And right now we're in the middle of a credit score crunch: "You need a 750 or better today to have the same treatment you got with a 700 two years ago," says John Ulzheimer, president of consumer education at Credit.com.

Think you're still in the clear? Don't be so sure. Lenders have been making changes that could cause your score to slip from excellent to average. Improve and protect your number with these strategies:

Learn your score. You have three FICO scores, based on your credit reports at the three credit bureaus: Experian, Equifax, and TransUnion. The numbers tend to be in the same ballpark, so pony up $16 to get one representative score at myfico.com. You can get an estimate free at Creditkarma.com. But the FICO score gives you a better sense of what lenders see.

Scout for mistakes. Your scores are only as good as the information they're based on. And a third of people who've pulled their reports have found errors. That's good reason to read your report.

When you buy your FICO score, you'll get a copy of the report it was based on. Get gratis histories from the other bureaus via annualcreditreport.com (you're entitled to one free from each bureau every 12 months).

Spot an error? Request a correction, following the instructions on the bureau's website. Let's say the size of a credit line was misstated or an account was mistakenly marked delinquent. Getting the error fixed could raise your score as much as 200 points.

Never, ever be late. The biggest chunk of your credit score comes from your payment history. Just one late payment can shave 100 points off a 750-plus credit score. Lenders can't tattle on you to the bureaus until you're 30 days past due, adds credit expert Gerri Detweiler. But don't risk it. For all your bills, enter recurring due-date reminders on your computer calendar.

Missed a payment? Get back on track within the next 30 days, and you should "get back the lion's share" of points lost. More than 90 days late? The damage can stick for years. If it was a one-off lapse, call your issuer and plea for a good-will adjustment to your credit report. (It's a long shot.)

Remember the magic 20%. The second-biggest factor in your score is how much you owe vs. how much credit has been extended to you. The part of this that's easiest to finesse is your credit card utilization rate, or your total card balances compared with your total credit limits, as well as each card's balance relative to its limit.

Example: If you've charged $5,000 on cards and have $50,000 in credit, your rate is 10%. For the best score today, 10% is ideal, but you can probably creep up to 20% and keep a high rating.

Unfortunately, with banks lowering credit limits and canceling unused cards, it's harder to maintain such a low percentage. In the previous example, if your available credit is cut to $20,000, your rate shoots to 25%. That could sink your score by as much as 50 points. The lesson: Know your limits, watch for changes, and stay under 20% on each card and in total (0% if you'll be applying for a loan soon).

Keep oldest cards in play. As noted, credit issuers these days are eagerly canceling cards that are not in use. Besides reducing your limit and increasing your utilization ratio, having an account closed can hurt you in another way, especially if it's among your older ones.

See, 15% of your score rides on the length of your credit history. The longer you ably manage revolving debt, the better you look. So don't cancel your oldest cards. And don't let them get canceled on you: Move a recurring charge to each so they stay active.

Already ditched or been ditched? A new card can help with your utilization rate, but there's little you can do to help the "history" component of your score, except to keep other old accounts in use.

Accept fate on the rest. There are other factors involved in your score, but they're not so easy to manipulate. For example, 10% is based on how well you manage a mix of credit types, such as mortgages, car loans, and credit cards. But you don't want to go out and, say, finance a car just for a score boost; besides, you can easily get 750-plus with just a few well-tended credit cards.

Along the same lines, 10% is based on "new credit," but the effects of a new application can be positive or negative, depending on your history.

Have questions or comments about this article? Leave us a comment at the end of this newsletter.

.

.

Mortgages: How to Make Sure You're Getting the Best Deal

In part 3 of this series (part 1 in your September  newsletter, part 2 in your October newsletter), Money Talks editor, Stacy Johnson, explains, "How to call each mortgage lender to make sure you're getting the best deal."

If you need assistance with mortgage shopping, contact us. We have a lot of experience helping home buyers find the best mortgage.
.

.

5 Ways to Decorate for the Holidays

With Thanksgiving right around the corner, and Christmas soon to follow, decorating your home is one of the first things you can do to get ready for the holidays. However, not all decorations are created equal, and you want to make sure everything you do makes a statement while creating a warm and inviting atmosphere for your house guests. Here are five ways you can decorate your house for the holidays to look like the magazines without breaking the bank.

1. Make a dramatic centerpiece. Whether it is for your living room or dining room, a large centerpiece filled with fall colors, pine, and warm colored candles can instantly be the focal point of the room. For more ideas on how to make one rather than pay a florist, check out this article .

2. Make a fall wreath for your front door. Before your guests even step foot into your home, wow them with a beautiful wreath on your front door. This can be made easily with a few craft store items, and if you use dried materials – you can even use it year after year. Here are instructions on how to make a fall wreath .

3. Place warm colored candles around the house. This is really easy: grab 3 tall candles of different lengths and tie them together into a bow with a piece of straw. Then place it on a candle holder. Make sure the candles are fall colors like orange, red, and yellow. This can be placed in the bathroom, in bedrooms, or anywhere longer candles fit in well. Here are more tips on Decorating with Candles .

4. Buy a couple of throw pillows to place on the couch. Have a neutral colored couch? Awesome. Get some fall colored pillows and place them on the couch. You could even add a fall colored throw, after all this season is all about colors. With the centerpiece, candles, and pillows, you’ll instantly notice the room coming together.

5. Have a staircase rail and banister? Wrap white colored lights with multiple thick ribbons and wrap that around the staircase going up. The lights will illuminate the autumn colored ribbons, creating a warm glow. There are lots of ways to decorate for Christmas, and these tips will help spur your creative ideas.