Five (5) Things You Can Do To Improve Your Credit Score

First you have to know how your credit score is compiled, as knowing the rules makes playing the game a lot easier.

FICO scores range from 300 to 850.  Five major components make up your score.

• 35%     Paying on time
• 30%     Amount and type of debt
• 15%     The length of time you’ve had credit
• 10%     The variety of accounts
• 10%     The number/types of accounts recently opened (6mos)

           

1. Bring all of your open accounts current and pay on time.

Making sure you don’t have anything late (30 days or more) will improve your score.  Your payment history makes up 35% of your credit score.

2. Pay off or pay down your revolving debt.

When your revolving debt (credit card) balances are less than 50% of your available credit lines, your score increases.

3. Don’t apply for or open any new accounts.

Opening new accounts lowers your credit score, especially credit cards.

4. Don’t close out credit cards.

Keep your accounts open even when you’re not using them.  Closing down accounts lowers your score.  It doesn’t matter whether you or the creditor close them out, it still negatively impacts your credit score.

    

5. Choose to stop receiving pre-approved credit cards.

Most people don’t know that you can opt out of receiving pre-approvals in the mail.  But more importantly, in doing this you will receive a slight improvement in your score.  There are several websites you can visit; I’ve seen positive results with www.optoutprescreen.com.

The Business of Marriage

Money and marriage go hand in hand; so much so, the vows should end with, “till death or finances do us part.”  The truth is many marriages end in divorce, I won’t qoute the over used statistic that boasts 50% of all marriages end in divorce.  As that may or may not be true, it is a fact, that far too many marriages end in divorce and a large number of those unravel due to money. 

Knowing that odds are stacked against you before you get married or even while your marriage is still intact, what conversations should you have?  Here are few topics to start with and why:

Money Management- Will you have joint checking accounts, separate or both?  It is important to know where your money is going to be saved and who will be in control of bill paying.  The person with the best money management skills should be in charge of paying the bills.  Just because you make the most money doesn’t make you the best at handling it.  Pick the right person for the job!

Family Size – How many children do we want, can we afford them?  What kind of education do we want for our children, how much will it cost and how will we save for it?

Career/Location – obviously, this is extremely important, what do you want to do for a living and where do you want to live (neighborhood/state/region, etc.).  All couples should discuss these topics at length, and agree before you start your family and incur debt together.  Disagreeing on this subject down the road is a quick way to put a major strain on any relationship. 

It’s never too late to have a financial tune-up in your relationship.  It is ok to change your course if you find that you’re traveling in the wrong direction.  I know this may sound sterile and impersonal, but this simple conversation could set you on the way to a successful marriage and turn your dream union into a reality.