Your Guide to Credit and Personal Finance

29.9.2008 - Home Credit China is pleased to announce the opening of its business presence and operations in the city of Tianjin. Home Credit, a fully-owned subsidiary of PPF Group N.V., invested Euro 21mn to set up Home Credit Enterprise Management (Tianjin) Company in June, which will provide consumer finance focused intermediary services such as enterprise management & economic information consulting and guarantee. In the meantime, it will build a Northern China back office in Tianjin and apply for a consumer finance company.

U.S. government may buy mortgages
By Marcie Geffner - LendingTree.com

Top officials in the federal government have been working on a new plan to strengthen the country’s financial system.

The bailout plan would allow the U.S. government to buy mortgage-backed securities and other assets from banks and financial institutions. The U.S. Treasury would then be able to sell those assets or keep them as investments. The goal of the plan is to protect the nation’s economy.

Treasury Secretary Henry M. Paulson, Federal Reserve Chairman Ben Bernanke and members of Congress have been working on the plan this week. The plan needs approval from Congress and the President’s signature to go forward.

The plan would be cheaper than other alternatives and would “fundamentally and comprehensively” address the root causes of the stress in the financial system, Paulson explained in a statement.

“When the financial system works as it should, money and capital flow to and from households and businesses to pay for home loans, school loans and investments that create jobs,” he said.

What the plan means for borrowers
The plan isn’t designed to bolster home prices or help homeowners who can’t afford their mortgage payments. Rather, it’s intended to unfreeze the financial sector, which could indirectly strengthen the housing markets over time. If that happened, homeowners would benefit.

The plan also could affect interest rates that borrowers pay on mortgages and other consumer loans, but right now it’s difficult to predict what the effect on interest rates will be. The government’s purchases of mortgages and other financial assets might make interest rates lower. But the government will need to borrow a lot of money to put the plan into effect, and that could push interest rates higher.

Given that uncertainty, borrowers should focus on their own personal financial situation.

As always, it’s important to:

• Educate yourself about loans and loan products.
• Figure out how much you can afford to borrow.
• Consider your own short- and long-term goals.
• Shop around for a loan that meets your needs.
• Read your loan documents before you sign them.

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You can build a good credit score by paying bills on time, managing your budget well and monitoring the types of credit you use. Your credit score is one of the key elements to your financial future. Credit scores range from 300 and 850, with 850 being the most desirable and 300 being the worst. This number indicates your cred…