Mortgage rates have experienced unpredictable ups and downs in recent years, much like a roller coaster ride. Meanwhile, housing prices have shot up rapidly, more like a rocket launcher, increasing significantly in a short span of time.

Elevated mortgage rates and fast-rising home prices have caused many would-be home buyers to delay their dream of owning a home. So far, waiting for conditions to improve has been frustrating. Waiting for better mortgage rates and lower home prices may be futile. However, recently, rates and prices have shown signs of stabilizing somewhat. Mortgage rates and home prices stabilizing at least gives home buyers a sense of what they’re dealing with and firm financial goals to shoot for.

Mortgage rates have leveled off

Throughout late spring and summer of 2024,  30-year mortgage rates fell by 1.14%. At 6.08%, they seemed on the verge of dropping below the 6% mark for the first time in two years. This fall in rates gave people a reason to hope that buying a home was becoming more affordable.

Then mortgage rates reversed course. From the start of October 2024, rates rose by 0.71% over six straight weeks. Suddenly, they were heading back to above 7% instead of falling below 6%.

However, November 2024 brought an unusually calm stretch for mortgage rates. During the month, 30-year rates alternated rising and falling weeks and changed by less than 0.10%. This doesn’t represent the return to lower rates that home buyers might hope for, but at least they remained reasonably stable.

Are home prices stabilizing?

Mortgage rates aren’t the only challenge home buyers have faced in recent years. Home prices have risen steadily over the past decade, and the pace has accelerated in recent years.

From mid-2020 to mid-2024, the average US home price rose by 48%. This, combined with the sharp rise in mortgage rates, made affording a home much more difficult than it had been just a few years earlier. Worse, with prices rising so rapidly, it seemed impossible for many buyers to save or earn enough to afford a home before prices increased again.

However, home prices have fallen in the two most recent months. The total decline is less than a quarter of one percent—hardly enough to offset the increases of recent years. However, even a pause in the rapid rise of home prices is cautiously good news.

Waiting for rate and price reductions may be in vain

In a dream scenario, would-be home buyers would love to set the calendar back a few years to when mortgage rates and home prices were a lot lower than now. However, waiting for a return of those conditions looks pretty unrealistic.

Mortgage rates fell when it looked like inflation was making steady downward progress towards the Federal Reserve’s goal of 2% a year. Recently, though, that progress has stalled. The year-over-year inflation rate increased slightly in October 2024.

Worse, there is growing concern that new tariffs will fuel inflation even further in 2025. Mortgage rates are very sensitive to inflation. It remains to be seen whether tariffs will push inflation and mortgage rates much higher, but at the very least, they seem likely to make it harder for them to fall.

Knowing what to work towards

Home buyers may not get much of a break from rising home prices or mortgage rates, but they appear to have stabilized recently. Mortgages and home prices stabilizing is helpful when trying to achieve any financial goal.

The relative stability in home prices and mortgage rates gives people a firmer idea of what it will take to afford a house. It may take a little longer at today’s levels than people had hoped. However, more stable prices and mortgage rates at least lets them know what to shoot for.

Improving your own position

Buying a home may take a little longer, but There are things you can actively do to put yourself in a better position to afford a home:

• Save toward a bigger down payment. A bigger downpayment means you need to borrow less, which can qualify you for a better mortgage rate.
• Work on your credit score. Raising your credit score is another way to qualify for a better mortgage rate. Over the length of a mortgage loan, anything you can shave off the mortgage rate can add up to a substantial amount of money.
• Know your target market. Monitor real estate prices in the areas where you’d consider buying. This will help you identify neighborhoods that represent better values and allow you to spot a true bargain when it comes along.

Get ready to be opportunistic

Building savings, improving your credit, and staying informed about the market will better position you to take advantage of opportunities when they arise. Being prepared is key because home prices and mortgage rates can change unexpectedly. It’s impossible to predict exactly where these rates and prices will go, but planning with today’s reality in mind allows you to adapt as conditions evolve. The relative stability observed in recent months offers a clearer path forward, making it easier to navigate the uncertainty.

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Thanksgiving is a time to reflect on what we are grateful for. For many, being thankful for family, good health, a great job, and a stable home is easy. However, for those struggling financially, whether dealing with tight budgets, overwhelming bills, or the weight of unexpected expenses or job loss, finding gratitude can feel especially difficult. When basic needs are a constant concern or the pressure of the upcoming holiday season adds to financial strain, it can seem impossible to feel thankful for anything.

As we approach the holiday season with Christmas fast on its heels, it can feel overwhelming, especially if you are already worried about holiday spending, bills, and debt. But you can take steps toward better financial health and enjoy a meaningful Thanksgiving despite financial stress.

Embrace the spirit of gratitude whatever your circumstances

It may seem difficult to be thankful when you are facing financial hardship. The key is shifting your focus from scarcity to possibility. Gratitude does not mean pretending things are perfect. It means acknowledging the positives, however small, and using those moments to fuel your next steps.

Even in the most challenging times, there are things you can appreciate: the support of loved ones, your resilience, the small things that bring comfort, or perhaps the ability to start making changes. Rather than feeling overwhelmed by the big picture, focus on what you can control, such as taking small actions toward better financial health.

Plan for the months ahead

As Thanksgiving and Christmas approach, many people experience stress about the added financial burdens of holiday shopping, travel, or family gatherings. However, thoughtful planning can ease much of this anxiety. If money is tight, it is important to set clear boundaries for your spending and plan ahead.

• Set a holiday budget. Create a realistic budget for Thanksgiving and Christmas, and stick to it. It is okay to set limits on how much you spend on gifts, meals, or decorations. You can still make the season special without overextending yourself.
• Avoid using credit carelessly. It may be tempting to use credit cards for holiday spending, but doing so can create a cycle of debt that is difficult to escape. If you must use credit, try to pay it off immediately or within the shortest time possible to avoid interest charges.
• Consider alternative gifts. If you cannot afford extravagant gifts, get creative. Consider making homemade presents, offering your time or skills, or organizing a family event that does not require expensive purchases. Thoughtful, low-cost gifts can mean just as much as something more expensive.

Focus on better financial health long-term

Use the holidays to mark when you begin working toward long-term financial improvement. Think of it as a gift to yourself. Taking small, steady steps now can make a significant difference in the coming months and years.

• Start tracking your spending. This may sound simple, but understanding where your money goes can be eye-opening. Begin by tracking your income and expenses. When it is in black and white, it may be easier to see where you can cut back on subscriptions you rarely use, dining out instead of cooking, or impulse buys you do not need.
• Address high-interest debt. If you have credit card debt or high-interest loans, consider planning to pay these off as quickly as possible. Paying off high-interest debt frees up money that can be used for savings or other financial goals.
• Consider additional income sources. If possible, look for ways to increase your income. This could be through a side gig, freelance work, or even temporary holiday jobs. Even small extra amounts can make a big difference in managing your finances.
• Build a financial safety net. Start small and build an emergency fund. Put the money in an account you do not look at often. Having a financial cushion can help reduce stress in the future and give you a sense of security.

Get help if needed

If your financial situation feels overwhelming, you can seek help. Financial counseling from a professional or through community organizations can make suggestions for improving your credit, reducing debt, and creating a more manageable budget. Many resources offer free or low-cost financial education, which can be a great way to start taking control of your financial future.

Find meaning beyond money

Thanksgiving is about is about relationships, community, and shared experiences. Financial health is important, but do not lose sight of the value of what truly matters. Spending quality time with family, expressing gratitude for the small joys, and being kind to yourself through this process are all part of living a fulfilling life, no matter your financial circumstances.

As Christmas draws near, it is easy to feel pressure to keep up or create a picture-perfect holiday. But the most meaningful moments often come from personal connection, thoughtful gestures, and shared memories rather than expensive gifts or extravagant celebrations. Embrace these moments with your loved ones and remind yourself that the season isn’t about how much you can spend but how much you can give through kindness and presence.

This Thanksgiving, take a moment to reflect on what you are grateful for, no matter your financial situation. It can be hard to appreciate your circumstances when financial stress looms, but small steps toward financial wellness, combined with a shift in perspective, can create lasting change. Whether managing debt, saving for the future, or simply making ends meet, Thanksgiving is an opportunity to focus on gratitude, make mindful decisions, and build a better financial future.

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Disclaimer: The article and information provided here are for informational purposes only and are not intended as a substitute for professional advice.

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Sometimes, life throws a financial curveball. One poor decision or mistake with money management can have long-lasting implications. It might seem as though it’s hard or even impossible to get back on track. Thankfully, there are several steps anyone can take to recover from a credit screw-up.

Ways a credit screw-up can happen

There are a variety of factors that can negatively impact your credit. Everyone’s circumstances differ. Some of these issues might ding your credit quickly, but many take effect over an extended period of time. It’s an important reminder that good financial habits that might seem small can add up to healthy credit. Issues that can result in a credit screw-up include:

• Late payments. If you are unable to keep up with bills, this can lower your overall credit. If a bill or two go to collections, the impact can be even more significant.
• High credit usage. If you are using all or most of the credit available to you, this can hurt your credit. That’s because lenders and other groups authorized to pull your credit report want to see that you live within your means. Maxing out credit cards is among the activities that can contribute to a credit screw-up.
• Many credit inquiries. When you seek out new credit cards or loans in a short period of time, it can raise questions. Landlords and renters want to see predictable credit activity over time, not a dramatic uptick in your requests for additional credit.
• Out of balance credit types. If you have only one or two types of credit, this factor could work against you. Lenders often like to see a blend of credit on your record. This could include an auto loan, a credit card, a student loan and a mortgage. Limited credit types could be a barrier to the strongest possible credit report and accompanying credit score.
• Bankruptcy filing. Thousands of people file for bankruptcy each year, and this type of activity can remain on your report for some time. It can pull down your overall report until enough time has elapsed to remove the bankruptcy from your annual credit report.

Steps to take if you have a credit screw-up

You are not alone if you’ve experienced any of these things that can result in a credit screw-up. The journey to healthy credit is personal. Everyone faces unique opportunities and challenges as they manage their finances. The good news is you can begin taking steps to recover from a credit screw-up quickly. Here are several strategies you can use to begin the recovery process:

1. Get your 3 free credit reports from AnnualCreditReport.com.
2. Get the free Credit Sesame app. Credit Sesame is a financial app for consumers who want to be confident their finances are under control. The platform uses AI to help consumers achieve credit health and financial fitness by managing and growing their credit and cash together. An all-in-one app to monitor credit score daily, receive insightful credit improvement and finance recommendations, and find the right credit cards and loans.
3. Assess your credit landscape. Once you’ve retrieved your annual credit reports, study them to understand what they says about your credit health. Each of the three reports varies because the credit reporting agencies – Experian, Equifax and TransUnion – pull data from different sources. Review the types of credit listed under your name and ask yourself several questions. Is everything accurate? Can you locate the list of factors negatively affecting your credit? What trends in your spending stand out? Are there details that seem unfamiliar or even inaccurate? If everything appears to be correct, you’re ready to move on to the next step. If you spot an error or suspect fraud, you should file a formal dispute. This can get your credit reports cleaned up so it’s as accurate as possible.
4. Plan the steps to build back your credit. Now, it’s time to formulate a plan to improve your credit score. This is key to resolving a credit screw-up. Your plan should include clear goals and a timeframe for taking those actions. For example, if you have maxed out two credit cards and need to get your credit usage back in line, your actions may include, “Pay down both credit cards in the next 6 months” or “Pay $50 extra each month for the next six months March.” Post these steps in a personal planner or in another location where you see them frequently. The goal isn’t to discourage progress. Instead, it’s to inspire you on the journey. You’ve evaluated your finances, made the decision to fix a credit screw-up and have a clear plan to make progress. Your credit report won’t reflect changes right away. It might even take months or, in the case of a particularly severe credit screw-up, years. But the sooner you get started, even with modest steps, the faster you improve your credit health.
5. Evaluate and adjust. With the Credit Sesame app, you can keep tabs on your credit health, including your credit score. As each month passes, you can check your information to see how you’re doing. Have you succeeded in chipping away at that credit card bill? Are you noticing your credit card balance is smaller with each bank statement? Celebrate these moments. If you have several other steps to take, find ways to start implementing those, as well. If you have a setback and need to adjust, it’s no problem. Recognize that rebuilding credit takes time. You know what needs to be done – and how to monitor your progress.
6. Maintain and grow a healthy credit mindset. Good financial management takes time. That can be challenging to find amid career, family and other activities. The Credit Sesame app can save you time and effort while showing how you’re doing.

Follow these steps if you have a credit screw-up and you should find yourself well on your way to more robust credit health.

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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

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Consumer credit often takes a beating during the holiday season. You can flip that script with a credit improvement step on each of the 12 days of Christmas.

It’s the perfect time to do it. Instead of dreading larger credit card balances and minimum payments following the holidays, how about using downtime from work to make your holiday debt more manageable?

Follow our 12 credit improvement steps one day at a time over the holidays.

1. Check your credit reports

Figuring out where you are starting from is key to being able to monitor progress. You can check your credit reports from Equifax, Experian and Transunion for free at AnnualCreditReport.com.

Your credit report shows the status of your credit accounts. This includes your balances and your payment history.

High balances and late payments generally hurt your credit score. Identify any problems you need to address. Also keep an eye out for any mistakes on your credit report. Getting these fixed could give your credit score an instant boost.

2. Sign up for credit monitoring

Sign up for free credit monitoring, including daily credit score updates. Think of this as an ongoing extension of checking your credit report. Credit monitoring lets you know when there has been any significant credit activity in your name.

This can be useful in helping you track your progress as you take additional steps to improve your credit. In addition, credit monitoring can alert you to any unusual activity that could be a sign of fraud.

3. Prioritize your credit card debt

If you have balances on more than one credit card, it pays to prioritize which balance to pay down fastest. Check each credit card statement to see what the current interest rate is. Then list all your cards in order of interest rate, from highest to lowest.

Make the minimum required payment on each card. Then, if you have extra money for payments, target the highest-interest card first. This has the biggest impact on reducing future interest charges, and that makes paying down your debt less expensive.

4. Negotiate a better rate on your high interest cards

Contact the credit card issuers of your highest-interest cards to see if you qualify for a lower rate.

Your chances of succeeding are best if you have a good payment history on that card and if your credit record is generally strong. It doesn’t cost anything to ask.

5. Shop for a cheaper credit card

If you can’t get a rate reduction on your high-interest credit cards, shop around to see if you could do better with a new credit card. Sign up as a Credit Sesame Member and see if you qualify for any cards under the Sesame Guarantee Program.

Remember that opening a new account could hurt your credit score a little so you should be reasonably certain of a successful application before applying. A new card could save you money on interest and reduce your credit utilization. This should help you improve your credit over time.

6. Consider credit card debt consolidation

While shopping for cheaper alternatives, you may see an opportunity to save money by transferring one or more existing balances to a less expensive card.

You might maximize those savings by using a zero-percent balance transfer card. This strategy works best if you:

• Have a plan for paying off the balance before the temporary zero-interest period expires
• Check to see if the interest you save exceeds any fees for transferring balances

7. Refinance long-term credit card debt into a loan

If your existing credit card balances are so high it might take more than a year to pay them off, consider refinancing some credit card debt into a personal loan.

Personal loans generally have lower interest rates than credit cards. They also give you a set schedule for paying off your debt.

If you use a personal loan to pay off credit card debt, make sure you don’t start building those balances up again. Any debt refinancing or consolidation should be part of a broader debt reduction program.

8. Make a monthly payment schedule

Create a schedule of payment due dates for your credit cards. Knowing when you must pay makes planning easier.

Even if you have automated payments for your credit cards, you must plan for those payments by making sure there’s enough money in your bank account to cover them. Also, planning payments helps you spot when you have excess funds and so an opportunity to pay more than the minimum payment. This reduces your outstanding debt faster.

9. Get balances down below 25% of your credit limit

One factor used to determine your credit score is the percentage of your credit limits that is currently in use.

Aim to get the amount of credit you use below 25% of your credit limit. There’s no magic to that number, but keeping a fairly low balance should help your credit score and help you make sure your balances aren’t creeping higher over time.

Once you get your credit usage below 25% you can shoot for paying off your balances completely. That is both the cheapest way to use credit and best for your credit score.

10. Apply for higher credit limits

One way to get your credit utilization rate down is to ask your credit card issuers to raise your credit limit.

The chances of a card issuer raising your limit are best if you have a good credit score and haven’t missed any payments on the card. According to data from the Federal Reserve Bank of New York, nearly two-thirds of applications for credit limit increases are approved.

Remember that a credit limit increase does nothing to reduce your interest charges. However, it can improve your credit score as long as you don’t proceed to build your balances up to the new limit.

11. Create a budget for the year

The best thing you can do for your credit score, in the long run, is to create a budget that doesn’t depend on continued borrowing.

There may be times, such as the holiday season, when it’s necessary to borrow money temporarily. However, having a budget for the full year helps you see how much you can afford to borrow and still pay off your balances within the year ahead.

12. Start setting aside money for the next holiday season

Even borrowing money temporarily costs something. The best way to pay for holiday shopping is with money you’ve saved up in advance.

As you get better at budgeting, plan on setting aside an amount each month to use towards next season’s holiday spending. This may even mean you can earn interest during the year instead of paying it.

That’s it for the 12 days of credit improvement

Credit improvement is not the most festive activity over the holiday period, but if you follow these tips, you might find that twelve days of credit improvement turns into twelve months of feeling merrier about your finances.

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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

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Using credit is a core part of handling your money in today’s economy. Credit can help you make ends meet week to week and build wealth in the long run. 

Even under the best of circumstances, recent graduates face challenges when it comes to getting and using credit. A combination of economic conditions is making it especially tough this year. 

It’s important for recent graduates to understand that building credit is not just about establishing credit. To build credit you need to use it the right way. Early mistakes with credit can plague you for years to come.

This guide takes you through the obstacles that today’s economy create, and show you a pathway towards credit building and using it successfully.

What to expect from today’s economy

Here are some of the economic conditions that make credit building in 2022 an especially tough time for recent grads:

• High inflation is stretching paychecks to their limits – and beyond. Inflation in 2022 is the highest it’s been in more than 40 years. This makes it hard for consumers to make ends meet. A recent Credit Sesame survey found that roughly a third of Americans are spending at least 90% of their paychecks from week to week – which leaves little cushion for emergencies, savings or major purchases.
• The possibility of recession could limit employment opportunities. The U.S. economy shrank slightly in the first quarter of 2022, according to the Bureau of Economic Analysis. There is concern that this weakness could develop into a full-blown recession. If so, recent grads would be likely to have a harder time finding a good job.
• Rising interest rates make borrowing more expensive. People who are new to using credit are often charged the highest interest rates. With rates generally rising because of inflation, look for borrowing to cost more in the months ahead.
• The moratorium on student loan payments is due to expire at the end of August. Recent grads may have more of a grace period before they have to start making payments, but this is a reminder that these payments are a financial responsibility many young adults start out with before their careers have even started.
• Rising consumer defaults could make credit tougher to come by. A composite index of defaults on consumer debt payments has risen for six straight months. When more people are failing to make their payments, lenders become more cautious about who they lend to. That can be especially tough on young people who haven’t had a chance to establish a good credit record.

7 reasons why credit building is important

Credit comes in many forms. It includes credit cards, car loans and mortgages – all things you may find necessary or desirable in the near future.

The more you can prove your ability to use credit responsibly, the more access to it you’re likely to get. Here are seven reasons it’s worth the effort:

• Credit gives you alternatives to using cash. Using credit can be safer than carrying cash around, and in some situations is the only option. 

• Credit allows flexibility about when to pay. Sometimes, you need to pay for something over time or act on an opportunity without having to get the cash together up front.

• Credit helps you make major purchases like a car or a home. Very few people are in a position to pay for big-ticket items without borrowing. That makes getting a loan essential for some things.

• Good credit makes borrowing cheaper. Lenders make higher-risk borrowers pay higher interest rates. The better your credit, the more competitive your rates are likely to be.

• Some landlords check credit when evaluating tenant applications. Especially in markets where rental vacancies are scarce, having good credit could make the difference between getting a good apartment or not.

• Some employers use credit checks in their hiring decisions. Your credit history says something about how you handle your responsibilities, and whether you have problems that could be a distraction. Hiring managers find that kind of information useful.
• Your credit score can affect your insurance rates. In many states, insurance companies are allowed to use your credit history as a factor in deciding how much your premiums will cost. That means good credit can save you money. 

Getting started: Credit building tips for recent grads

Young adults face a similar challenge when trying to get credit as they do when looking for a job.

With getting a job, the problem is that employers often want experience – but how do you get experience until someone will hire you?

When it comes to getting credit, lenders like to look at a person’s history of consistently making their debt payments. But how do you build that history unless someone will give you credit?

Here are some tips for getting started:

• Try a secured credit card. If you can’t qualify for a conventional credit card, putting a deposit down can allow you to get a secured credit card. While this isn’t an ideal, it can let you start creating a payment history. That can lead to more credit opportunities being available.

• Get an auto loan. Since auto loans use the vehicle as collateral, they tend to be relatively easy to get. If you need a set of wheels anyway, this may be a good way to jump-start your credit history.

• Use your student loan payments as an opportunity to build credit. For sure, those payments are a burden. But look on the bright side. They mean you’ve already qualified for one type of credit. Now use those payments to show you can be trusted with other types of credit.

• Always budget before you borrow. Getting credit is step one. Using it responsibly is what really matters in the long run. Having a plan for repayment before you borrow will help you avoid getting in over your head. 

• Make a schedule of your income and due dates. Keeping up with your payments is as much about organization as it is about having the money available. Planning out your pay dates and when your bills will become due is a way of both organizing your payments and making sure money is available at the right times.  
• Make sure money is available to cover automated payments. Automated payments can help you avoid missing deadlines, but you still have to keep track of your bank balance and payment schedule. That way you can ensure there is enough money in your account to cover those payments.

Used correctly, credit can make your life more convenient and open up opportunities for you. Just remember, your goal shouldn’t be simply credit building, but also to use it in ways that have long-term benefits.

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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

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