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MoneyTips

Few things are more satisfying than driving your brand-new car – until you realize that it lost value immediately after you left the dealership. Thanks to depreciation, it's possible for a car to lose over 20% of its starting value within the first year. According to CARFAX data, cars can lose over 10% of their value after the first month.

During the early stages of car ownership, it's easy for a car loan to be underwater – meaning that you owe more on the loan than the current value of the car. With a down payment of 20% or less, you're very likely to have an underwater period.

If all goes well, it's okay to be underwater. You'll continue to make payments and the car's value should overtake the remaining loan balance as the balance decreases. Early payments are mostly dedicated to interest and not principal – so it takes time to go from negative to positive equity. As long as you hold onto the car long enough, you should be fine.

What happens when all ...

Motor Vehicle Gap Insurance 101

Online Car Loans 101

Buying Used Cars Online

MoneyTips

You're ready to take out a loan, only to realize that your credit score actually dropped since you last checked it. With a low credit score, you'll be paying higher interest rates than you expected – and you may not qualify for the loan at all.

What happened?

Remember that your credit score reflects your risk to a lender at any point in time. As new information is reported to credit bureaus, your credit report is updated. Your credit score is periodically recalculated to incorporate that new information. If the update implies any risk of non-payment, your score will suffer.

To find out why your score dropped, ask the following five questions and think like a lender. Would you be less likely to lend someone money if you didn't like the answer?

1. Did You Miss a Payment? – On-time payments are the most important factor in your credit score. Lenders assume that if you've missed a payment before, you're more likely to do it again....

Survey: Women More Likely Than Men To Miss A Credit Card Payment

6 Top Credit Myths

How Millennials Can Improve Their Credit Scores

MoneyTips

It's always best to pay off a loan as soon as you can, isn't it? Not necessarily. There are several reasons you may not want to pay off your loan early, including the effects on your credit score.

The obvious reason for early payoff is interest savings. By paying your loans off early (especially large ones), you can save substantial interest charges. Some loans discourage early loan repayment by charging penalty fees. Know the terms of your loan and include these fees in your calculations when deciding whether to repay a loan early.

When assessing early loan repayment, follow two trains of thought. How will this affect my credit score, and is early loan repayment the best use of my money?

Consider your credit score first. Five factors influence your score – on-time payments, amounts owed/credit utilization (the amount of your available credit that ...

Video: When To Accept Mortgage Prepayment Penalties

Understanding Mortgage Prepayment

How Credit Utilization Impacts Your Credit Score

MoneyTips

It may seem like you have been paying credit card interest since 3500 BC – but you might be surprised to learn that credit actually dates back to those ancient times.

Historians believe that the Sumerians of ancient Mesopotamia (in modern-day Iraq) extended credit to farmers in the rough equivalent of a consumer loan. The time lag between buying seed and harvesting grains to sell required up-front resources – just as it does today.

The first laws regarding credit were established in Babylon in 1800 BC. The Code of Hammurabi established formal contract rules for loans and caps on interest rates – perhaps an early form of consumer protection. To be enforceable, loans required recording and witnessing by a public official. Interest rate ceilings were high – 33.3% annually on grains and 20% on silver.

The concept of credit and interest continued through the ages, with occasional detours. For example, during Charlemagne's rule in 768-814 AD, the charging of ...

6 Top Credit Myths

Do Nothing And Get A Higher Credit Score

Do Nothing and Get a Higher Credit Score...Again!

In the aftermath of Capital One’s announcement on Monday that roughly 100 million credit card applications had been compromised in a data breach, exposing an estimated 77,000 bank account numbers and 140,000 Social Security numbers, many consumers likely have questions and concerns for their own wallets. With that in mind, the free-credit-score website WalletHub has some tips for how potential victims can keep their financial info safe.