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New credit score rules: Will you benefit?


New credit score rules: Will you benefit?

Published 8/29/14

New credit score rules: Will you benefit? By Peter Andrew

If your credit score's less than perfect, this could be the most cheerful thing you're going to read all day. That's because FICO, the company whose scoring systems are used in 90 percent of all lending decisions, and two of the three major credit bureaus are making changes that might give your score a boost -- without you having to lift a finger.

In other words, one morning soon, you could wake up with a significantly better credit score, simply because of the way these scores are tallied.

FICO Score 9: the best sequel ever?

In August, FICO announced that it was launching a new version of its credit scoring system. And FICO Score 9 includes some big changes that could save you money the next time you borrow.

The first affects those who have medical collections on their reports. Up until now, these have had the same negative impact on scores as all other debts. But they're set to be counted differently. And the company estimates that the median impact on its 300 to 850 scale for those who have medical collections as the only major negative references on their reports should be a score boost of 25 points.

Others who might benefit include those with "thin files."

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Is there a financial literacy crisis among US teens?

Published 8/12/14

Is there a financial literacy crisis among US teens? By Justin Boyle

In what might seem like a dispatch from the Tell-Me-Something-I-Don't-Know Department, the National Center for Education Statistics (NCES) released data last month that indicate American teenagers have a below-average grasp of personal finance for their age.

The NCES study, known as the Program for International Student Assessment, or PISA, asked 28 million 15-year-olds various questions that tested their financial literacy and problem-solving skills. The results revealed that many kids from the U.S. don't know much about income tax or basic compound interest, let alone financial planning or investment principles.

Is this a crisis? Here's a look at the numbers.

The stats don't lie

First, the bad news: Just 9 percent of U.S. students tested at level 5 or above for financial literacy. That's the level that includes long-term investment planning, big-picture financial concepts and unstated implications in financial documents, which, frankly, many adults don't even understand.

What's more troubling is that 18 percent of U.S. students surveyed tested below level 2 on the study's rating scale.

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How to save money during a move

Published 8/5/14  (Modified 8/12/14)

How to save money during a move By Georgie Miller

My husband and I recently moved after living in the same place for over five years. Whew! I'd forgotten how much work it is. While moving expenses can add up fast, your move doesn't have to become a cash emergency. Think ahead and try these strategies on for size.

1. Only move what you have to

There's no sense in moving more stuff than is necessary. Depending on how far in advance you start making your plans, you have several options for getting rid of stuff you no longer want or need.

  • Start by selling. If you have valuable items that are in good condition, selling is the first step. Selling items online, hosting a yard sale and consigning items at thrift stores are all options.

  • Then try donation. Anything that doesn't sell but is still in nice condition can be donated to a charitable organization. You get a tax break and will have fewer boxes to pack. Plus, many organizations will come and pick items up from your house!

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Are you suited to real estate investing?

Published 7/29/14

Are you suited to real estate investing? By Peter Andrew

The last time I wrote about investing in real estate, I told you I was building up the courage to buy a nearby house to rent out to vacationers. Well, guess what? I didn't. I didn't buy it because I didn't build up the courage.

Every time I tried to picture happy families returning year after year to joyfully hand me a significant proportion of their disposable incomes, the only mental images I could actually conjure were of unpaid bills, foreclosure notices and someone changing the locks on my vacation home.

This glass-half-smashed-into-a-million-pieces mentality may well be the reason I'm not rich. You have to speculate to accumulate, and all investments involve some sort of risk. Turns out, I'm risk-averse, so the tiny puddle of money that might have been the down payment on my vacation rental remains in an online savings account.

Recognize your weaknesses

Actually, it may be less a question of risk-aversion than realism. In the late 1990s, my parents came to visit me in London where I was then living. We went to Columbia Road market one Sunday morning, which combined flowers and plants with exotic foods and antiques.

My mom and dad strolled with me down the center of the road as my partner raced around the stalls, buying armfuls of cut flowers, a triumph of 19th-century taxidermy in the form of a turtle (see the photo on the right), miscellaneous bric-a-brac, and quantities of obscure Asian foodstuffs. Within 30 minutes, the bill was well over $350.

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Opening a new bank account? Ask these 5 questions

Published 7/18/14

Opening a new bank account? Ask these 5 questions By Holly Johnson

A few months ago, I did something that I hadn't done in almost 15 years: I opened a new checking account.

It was a slightly scary thing to do, mainly because I had gotten so comfortable with my old account and how it worked. On the other hand, it was definitely time for a change. Because we moved, our old bank was no longer in a convenient location for us. Even worse, our "new" local branch had severely limited hours to the point where it seemed like they were never open. I hated the thought of filling out a bunch of paperwork and closing our old account, but I knew it was for the best.

When it came to opening a new account, I felt like quite the novice. However, after doing an adequate amount of research and exploring my options, I quickly found my footing. But that was only after I compiled a list of questions I needed to answer before committing to opening a new account with a specific bank. Here are the five questions I thought were most important to answer, and why.

1. Will my new bank be convenient?

Modern banking is all about convenience, and my personal banking needs are a reflection of that. When it came to choosing a new bank to do business with, I needed to know that my new banking relationship would be a convenient one.

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3 cheap summer exercise solutions

Published 7/9/14

3 cheap summer exercise solutions By Justin Boyle

Does it surprise anyone to learn that demand for personal trainers goes up in the summer? A friend of mine who moonlights as a trainer tells me that the only time of year when he's busier is January, at the height of New Year's resolution season.

Personal training, gym memberships, unlimited yoga passes and the like are all fine ways to get in shape for the sleeveless days of summer, but what if you're looking to work out without adding a new line to your budget? Check out these three ways to get fit without breaking the bank.

1. The new old-fashioned way

It might be odd to hear that an idea from your junior high gym class has turned into a major exercise trend, but that's exactly what's happened in the last few years. Calisthenic exercises like push-ups, pull-ups, dips and sit-ups are a big part of interval training, which can burn fat and build muscle at a surprising pace.

Another great thing about calisthenic exercise is the number of inventive exercises, training tips and routines you can find for free on the Web. If you want to add some extra resistance, plastic jugs that hold one U.S. gallon can be filled with water (about 8 pounds), play sand (about 13 pounds) or both (about 16 pounds) for DIY dumbbells on the cheap.

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