1. Three months in at least two different accounts (I've had three different providers become insolvent and it's irritating to temporarily lose access to a one year cash safety margin, which was the case for one of them. But I have others and those keep it to only irritating. If I'd had all of my cash in one place and needed emergency money it could have been more than irritating. Though I also have several credit cards and two arranged overdraft facilities as backup for that.
2. Refinance the loan to three years. Partly to get a lower interest rate. The longer term, even if at the same rate, is to keep on producing a long list of "on time" entries in your credit report. That's worth more to you than the interest cost and no debt and utility bills are not as effective. You aren't paying interest, you're buying an improved credit score.
3. Next time you buy a nice moderately expensive home item, do that with debt as well and put he cash into a savings account of some sort. Same "on time" credit report entries reasoning.
Then when you come to get more significant credit where rates are far more important to you you'll look like a nice reliable payer.
It's irritating that no debt does less for your credit score than regularly serviced debt but those are the rules.
The rules for me are a bit different because I already have a nice cash float and some debts being serviced (though 0% debt for 15 months for 3% fee, for example, so I'll make a profit on it). Corporate bond and equity mutual funds for me. We're in times we'll only see three or four times a lifetime and profits are calling..
You might go with the mutuals once you have those other things in place. Now's a nice time for drip feeding to use purchase price averaging to reduce the volatility in the market. I've seen one of my tax exempt accounts changing in value by as much as 8.5% up and 7.6% down in one day in the last three weeks (with around 15 mutuals in it). That's volatility! Definitely not for the faint-hearted.
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branchandroot
no subject
Date: 2008-11-10 05:41 pm (UTC)1. Three months in at least two different accounts (I've had three different providers become insolvent and it's irritating to temporarily lose access to a one year cash safety margin, which was the case for one of them. But I have others and those keep it to only irritating. If I'd had all of my cash in one place and needed emergency money it could have been more than irritating. Though I also have several credit cards and two arranged overdraft facilities as backup for that.
2. Refinance the loan to three years. Partly to get a lower interest rate. The longer term, even if at the same rate, is to keep on producing a long list of "on time" entries in your credit report. That's worth more to you than the interest cost and no debt and utility bills are not as effective. You aren't paying interest, you're buying an improved credit score.
3. Next time you buy a nice moderately expensive home item, do that with debt as well and put he cash into a savings account of some sort. Same "on time" credit report entries reasoning.
Then when you come to get more significant credit where rates are far more important to you you'll look like a nice reliable payer.
It's irritating that no debt does less for your credit score than regularly serviced debt but those are the rules.
The rules for me are a bit different because I already have a nice cash float and some debts being serviced (though 0% debt for 15 months for 3% fee, for example, so I'll make a profit on it). Corporate bond and equity mutual funds for me. We're in times we'll only see three or four times a lifetime and profits are calling..
You might go with the mutuals once you have those other things in place. Now's a nice time for drip feeding to use purchase price averaging to reduce the volatility in the market. I've seen one of my tax exempt accounts changing in value by as much as 8.5% up and 7.6% down in one day in the last three weeks (with around 15 mutuals in it). That's volatility! Definitely not for the faint-hearted.