Angel has a problem common
to many young professionals. She is in the
market to buy her first home, but her low
credit score has been a big hindrance in obtaining
conventional financing. Not only that but
Angel has relatively little personal savings,
and she has a problem with budgeting for her
expenses. "I tend to spend whatever I have
at the moment," she says.
Angel believes that she will continue to earn a good living
and she has planned to pay for her wedding
with cash. She believes she can look forward
to substantial earnings gains over her career.
But right now she is pinched in her finances,
and a few issues after college have damaged
her credit score.
While she is not sure
how she got in this position, what she does
know is that just starting out in her new
life, she has $12,000 of high-interest credit
card debt spread out over four credit cards.
This debt is about 75 percent of her credit
limit. She is currently paying high rates
because her credit score has not qualified
her for preferred rates. In fact, three of
the cards have rates of over 25 percent. This
is her only current debt, as she does not
have a car loan.
This report was prepared by Chartered
Financial Analyst William Z. Suplee,
CFP, CASL, ChFC.