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Today’s Cheat Sheet Q & A:
What’s the current national average credit score?:
Bottom Line: Today’s question comes from a listener who subscribes to a service that allows her to see her credit score on a regular basis however she said that the national average credit score cited always seems to be the same. She wants to know what the real national average credit score is.
She asks a good question because it does seems like with certain companies that mention credit scores the national averages seem static and as you might imagine – they aren’t.
Let’s take a look at the progression (or regression as the case may be) of credit scores over the past several years as the economy highly factored into credit scores:
- Average credit score before the great recession (Oct. 07’): 679
- Average credit score at the end of 08’: 662
- Average credit score today (end of January 13’): 638
Commonly you see a score of 660 put out there by companies as a national average for advertising or comparison purposes. That is dated information.
Clearly even with dinged credit you may have a superior score to most. It’s also helpful for you to evaluate whether you may be considered credit worthy. Many with a score of 650 think they can’t obtain financing. They would be surprised. Many loans are available to people with credit as low as 620 (including FHA home loans) because otherwise most Americans simply wouldn’t have access and they wouldn’t have business.
These low credit scores also point to why many complain about banks not wanting to loan money. In many cases it’s not that banks don’t want to loan money (that’s how they make money after all), it’s that credit scores have deteriorated to the point where many simply aren’t credit worthy. Keep in mind that the average is 638 – so many have scores well below that figure.
If you have a question or topic you like me to address email me: brianmudd@clearchannel.com
Top 5 problems entrepreneurs are running into right now – what to consider:
Bottom Line: If you are looking at starting a company you’re certain to be faced with adversity and challenges that you did account for and of course there will be obstacles that you hadn’t anticipated. The more aware you are of the potential issues you may face the better equipped you’ll be to become successful in your new enterprise. As a founder of a successful company and another that failed, I’ll certainly attest to this. John Fearon put together a great article (in the link below) that address the top 5 issues that startups are citing today. They are:
- Publicity (getting the word out about their new business)
- Government Regulation
- Lack of marketing (this at some point ties into publicity but this is about having, or not having, the resources to be strategic with a campaign)
- Hiring and firing decisions
1. Funding…
Much of this is self explanatory so I won’t dwell on the obvious. Let me tap into a couple though. First let’s tackle Government regulation. We’re all aware that big brother has a heavy hand as it pertains to large companies but many of us over look what the impact may be to our start up. I’ll provide you with an example that I encountered when starting my smoothie company in the 90’s. The building for store was in historic downtown
- Signage (this was the local historic committee that mandated a smaller sign than the previous company had – it had been grand fathered in)
- Bathroom (the American with Disabilities act was cited and the configuration of the bathroom had to be altered before it met current code)
- Ramp getting into the store (this again was the
- Wiring (the wiring all had to be redone in the building to meet the current fire code)
All of those caught us by surprise because the previous business had been operating in that building with it in that condition. What are all of the considerations that you haven’t thought of? The more that you can address before you get going the better.
http://www.shellypalmer.com/2013/02/startup-advice/
People are quitting their jobs in the largest numbers since June of 08’:
Bottom Line: I’ve covered stories that imply that as many as 70% of all people in the workforce would change jobs if they thought they could. Many folks haven’t been willing in recent years because of the lack of job growth opportunity, economic uncertainty, and lack of mobility related to housing.
The housing recovery is helping to remove one of the obstacles and many more are considering taking the plunge than in times gone by. Reviewing the December labor market in depth revealed the following:
- About 1.6 million people were laid off
- About 2.2 million people quit their job by choice
What’s significant about those numbers is that it’s the first time since June of 2008 that more people left their existing employer by choice then were laid off. There is something that’s a bit ominous about that factoid.
Let’s think back to June of 2008. Was it a good idea to change jobs by choice back then? Changing jobs in June of 08’ by choice would have been about the worst time to do so in modern American history. Two months later the bottom fell out of an already receding economy and the odds of you retaining that job would have been far worse for being the new person at the company.
People didn’t know we were already in a recession in June of 08’ – that info came with hindsight. So let’s look at December 2012. People didn’t know at the time that the economy was actually receding. We now know that the
I still think it’s unlikely we’ll hit recession early this year but it’s a real risk at this point. It’s not to say that you should stay put at all costs but I do think you need to be extra certain of a change before making it right now.
http://www.cnbc.com/id/100457099
Valentines Day has gone to the dogs – literally:
Bottom Line: So have you taken care of your significant other for V-Day today? Ok how about your other significant other? No I’m not suggesting that… I’m talking about your pet. A record number of people are gifting their pets this Valentines Day.
According to the National Retail Federation 20% of Americans have purchased V-Day gifts for their pets this year – a new record. The amount we’re spending on pets is also a new record - $815 million. I love my cat but I can’t quite see a Valentines Day gift for Tigger… At least this year.
http://www.usatoday.com/story/money/2013/02/13/pets-valentines-day-gift-dog-cat/1917251/
Should you co-sign a loan to help family or friends?:
Bottom Line: Bankrate has produced a list of ten reasons your should never co-sign someone on a loan (see the link below). There are so many good points made in the story. Among them:
- The potential to ruin relationships with friends or family
- Banks likely to sue you if the person you co-sign defaults
- Credit issues
- Tax implications to you
Still I don’t completely agree with the premise that you should never co-sign anyone. I don’t think you should ever co-sign non-family but… It may be valuable to help your children.
Your kids won’t have access to credit until they are 21 without your help these days (or 18 if the have full-time employment). Smartly co-signing loans with your children can help them build credit at a young age and learn lessons about money management.
http://ca.finance.yahoo.com/news/top-10-reasons-shouldnt-co-080239644.html
Marissa Mayer channels Steve Jobs – what Yahoo’s next move will do to affect you:
Bottom Line: When Steve Jobs came back to Apple his first decision was to eliminate most of the products lines of business for Apple. There were hundreds of different things Apple had its hands in and none of them were winning. He put in a new rule of ten. Apple wouldn’t have more than ten products at any time (he cut to 8 right away). Marissa Mayer is doing something somewhat similar at Yahoo.
Yesterday Marissa said that Yahoo would reduce the number of mobile applications it supports from 60 to 12. The time, attention and effort that had been spread across all of those apps would be focused on enhancing and growing the 12. For some this will mean that apps you may use will no longer be supported. It likely is a smart strategy for the long run by Yahoo. If you do something – win with it before you try new things.
http://www.fastcompany.com/3005801/fast-feed/marissa-mayer-yahoo-needs-cut-apps-60-12
