Credit Repair Commandos

The Treasury Department could issue $700 billion in T-bills within weeks of a debt-ceiling deal, draining liquidity from markets
Story by [email protected] (Filip De Mott) • Yesterday 4:19 PM

The Treasury will have to replenish its cash after the debt ceiling is lifted, Goldman Sachs said.
It may sell up to $700 billion in T-bills to rebuild its coffers withing six to eight weeks of a debt deal.
That could drain liquidity out of markets in a short period of time.

The Treasury Department will issue $600 billion-$700 billion in T-bills weeks after lawmakers agree to lift the debt ceiling, Goldman Sachs estimated.

President Joe Biden and Republicans in Congress have yet to reach a deal, but Treasury Secretary Janet Yellen reiterated her warning that the government will run out of money as soon as June 1.

House Speaker Kevin McCarthy indicated Monday ahead of his meeting with Biden that a deal could be made before the June deadline.

Overall, Goldman expects the Treasury will supply the market with more than $1 trillion of T-bills on a net basis this year.

That will pull liquidity out of financial markets. In a separate note, analysts at Bank of America recently said that would have an equivalent impact on the economy as a Federal Reserve rate hike of 25 basis points.

That comes as the banking sector is still grappling with the fallout of Silicon Valley Bank's collapse, which led to deposits fleeing regional banks. Meanwhile, more than a year of Fed rate hikes has also drawn money from bank accounts and into higher-yielding money market funds.

Goldman estimated that bank reserves would drop by $400 billion-$500 billion due to the Treasury rebuilding its cash balance, continued deposit outflows, and the Fed's ongoing quantitative tightening program.

What’s a Good First-Time Home Buyer Credit Score?
By: Valencia Higuera Reviewed By: Aleksandra Kadzielawski
April 24, 2023 -

Buying a home is a major milestone—but it can also be an overwhelming process as a first-time home buyer. Credit plays a key role in getting approved for a loan, and your score also impacts your mortgage rate and terms. However, first-time home buyer credit score requirements can vary by loan program.

Here’s a look at what you need to know about first-time home buyer credit scores.

First time home buyer credit score requirements
Credit score requirements for a mortgage loan aren’t one-size-fits-all. The score you need depends on several factors, and each type of loan has a specific minimum. In addition, some lenders set their own minimums. Generally speaking, you’ll need a minimum credit score between 500 and 620.

But even though some lenders and loan programs allow lower scores, improving your credit score can help you secure a lower interest rate, thus increasing your purchasing power.

It’s important to understand the different factors making up your score. Payment history is the biggest component, making up 35% of your score. Therefore, paying your bills on time every month can boost your rating.

The amount you owe (credit utilization ratio) is another significant component, making up 30% of your score. Credit utilization is the percentage of your revolving credit in use. To calculate your percentage, add up your revolving credit balances and divide this number by your total available credit. To improve your ratio, pay off credit card balances in full every month, or keep balances below 30% of your credit limit.

Other factors making up your credit score include the length of credit history (15%), types of credit accounts (10%), and new credit applications (10%). Therefore, it takes years of responsible credit use to build good credit, and diversifying your credit can improve your rating too.

However, don’t apply for credit unnecessarily. Each hard inquiry can reduce your credit score by a few points.

What is the easiest home loan type to qualify for?
Since first-time home buyer credit score requirements vary by program, some loans are easier to qualify for with a less-than-perfect score. Here are the credit requirements for four common mortgage programs.

FHA loan
An FHA loan is the most accessible mortgage to qualify for with a low score. You can get approved with a rating as low as 500 to 580.

These loans (insured by the Federal Housing Administration) are popular among first-time home buyers because of their low down payment. If you have a credit score of 580 or higher, you could potentially buy with as little as 3.5% down. If your credit score is between 500 and 579, you’ll typically need a 10% down payment.

An FHA loan has no income limit, so you can apply whether you’re a first-time home buyer or a repeat buyer. However, you can only use an FHA loan to buy a primary residence. The only exception is when purchasing a multi-family property and living in one of the units.

Most FHA loans require mortgage insurance regardless of your down payment amount. If you put down at least 10%, you’ll only pay mortgage insurance for 11 years.

Cost to finance a $45,000 car loanThe table shows the approximate interest rates for $45,000 loans for new cars, broken down by FICO score range.
Table with 4 columns and 6 rows. Currently displaying rows 1 to 6.

FICO score APR Monthly payment Total interest paid
720–850 5.8% $865.00 $6,890.00
690–719 7% $890.00 $8,403.00
660–689 9.4% $942.00 $11,514.00
620–659 12% $1,000.00 $15,005.00
590–619 16.1% $1,098.00 $20,857.00
500–589 17.8% $1,137.00 $23,245.00

Note: As of Nov. 2, 2022
Table: Gabriel Cortes / CNBC
Source: FICO.com

Stacy Cowley is a finance reporter with a focus on consumer issues and data security. She previously reported on a variety of business topics, including technology and economics,

“We must forcefully address repeat lawbreakers to alter company behavior and ensure companies realize it is cheaper, and better for their bottom line, to obey the law than to break it,” Mr. Chopra said in a speech last month.

Ed Mills, a policy analyst at Raymond James, a financial services firm, said the suit was a warning shot to the financial industry — and a reversal from the agency’s meekness during the Trump administration.

“It’s almost like a bad movie title: ‘The C.F.P.B. Is Back’ — and This Time, It’s Personal,’” Mr. Mills said. “Chopra was very clear in that speech that he did not believe that paying fines or entering consent decrees changes behavior. One of the only ways he was going to change behavior is by going after individuals for personal liability.”