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Can Buying Your First House Actually Hurt Your Credit?

Can Buying Your First House Actually Hurt Your Credit?

For generations, owning a home has been considered an integral part of the American Dream. Life without a home of your own, the two kids, golden retriever, and white picket fence just don’t make sense. Okay, that last part may be a bit of an overstatement, but the fact remains—well-meaning family members and financial experts alike have long recommended homeownership as a sensible path to financial stability. When done correctly, buying a house can be one of the smartest investments you’ll ever make. It will undoubtedly be one of the biggest. As a first-time home buyer, your finances will face the scrutiny of mortgage underwriters, so it’s essential to have all your economic ducks in a row before you even begin applying for a mortgage. And while a smooth financing process is reason enough to be smart with your money, financial stability can also help when your credit takes a hit for five or six months following your big purchase. Wait. What?! Yep. That’s right. Your credit score can—and probably will—drop for a few months after you become a homeowner. Great for you. Not so great for your credit. Why does buying a house—which, by all accounts, is a wise financial decision—have a negative impact on your credit? The answer isn’t as crazy as you might think. When you apply for real estate financing, mortgage companies pull your credit report to determine whether it makes sense for them to lend you money. In credit industry terms, this is known as a “hard inquiry.” Since these inquiries signal you could be incurring additional debt, they often result in a small,...
Do You Know What It Takes to Run a Successful Side Hustle?

Do You Know What It Takes to Run a Successful Side Hustle?

The process of finding financial security has gone through some dramatic changes over the last few decades. As recently as the 1980’s, conventional wisdom suggested following a career path that went something like this: Go to school. Get a good job. Work for one company for 20 years or more. Collect a pension. Retire in relative comfort. If that approach sounds completely foreign to you, you’re not alone. On his personal finance blog, 20SomethingFinance, G.E. Miller observed, “Most twenty-somethings have never and (unfortunately) probably will never sniff the sweet security provided by a pension plan.” So, if there is almost no hope of finding financial stability by following the same path as previous generations, how can you set yourself up for success? Two words: Side. Hustle. What Does “Side Hustle” Really Mean? With more and more people realizing that working a single job leaves them living paycheck to paycheck, side hustles are experiencing a considerable spike in popularity. Since we’ve already used the phrase twice in this article, you may be wondering exactly what constitutes a side hustle. Is it a second job? An online business?  In his new book (conveniently titled Side Hustle), Chris Guillebeau provides some much-needed clarity. “A side hustle is not a part-time job. A side hustle is not the gig economy. It is an asset that works for you.” This definition reveals a crucial distinction between trading hours for dollars and building something that pays dividends for years to come. Side Job vs. Side Hustle Thanks to a surging economy and advances in technology, finding a side job is easier than ever. From Uber...