Monday’s need-to-know money news

Credit report with score on a desk

Credit report with score on a desk

Today’s top story: Understanding your credit card’s free FICO score. Also in the news: The difference between a soft inquiry and a hard inquiry, surviving Social Security with a minor cost of living adjustment, and how apps can both help and hurt your finances.

To Understand Your Credit Card’s Free FICO Score, Get Your Credit Report
How your credit card use factors into scores.

What’s the Difference Between a Soft Inquiry and a Hard Inquiry on My Credit Report?
Which ones affect your credit score?

Social Security survival strategies with COLA only at 0.2%
Surving a stagnant cost of living increase adjustment.

How Apps Can Help (and Hurt) Your Finances
Could your apps lead you to spend more?

Tuesday’s need-to-know money news

18ixgvpiu0s24jpgToday’s top story: Why you shouldn’t wait for a 401(k) to start saving for retirement. Also in the news: Cell phone options for when you’re traveling overseas, credit problems that can destroy your home-buying dreams, and five crucial retirement years for your money.

Don’t Wait for a 401(k) to Start Saving for Retirement
Don’t wait to start saving period.

Cell Phone Options When You’re Traveling Overseas
Keeping your bill as low as possible.

5 credit problems that can destroy your home dreams
Tackling issues before you buy a home.

5 crucial retirement years for your money
Years to pay attention to.

Q&A: The ins and outs of credit scores

Dear Liz: I’ve been using a free credit site to learn more about credit reports and credit scores. Recently I looked around and found reviews about how “horribly inaccurate” these free scores are. Where can I go to find my real FICO credit scores? I need the ones that matter, the ones that lenders use.

Answer: Some free scores aren’t used by any lenders. But many sites these days give out VantageScores, a FICO rival that’s being used in a growing number of credit decisions. So VantageScores are “real” scores, just not the most commonly used scores.

Here’s the thing, though: You generally can’t predict which scores a lender will use. Not only are there different name brands, but FICO offers versions customized for certain types of lending. The scores typically used by credit card issuers are different from the ones used by auto lenders, for example. These industry-specific FICO scores are on a 250-to-900 scale, rather than the 300-to-850 scale used by other FICO scores.

There are also different generations of each type of score, much like the different operating systems for your computer. Some lenders quickly upgrade to the latest version, just as some computer users upgraded to Windows 10 when it came out. Others use older versions of the scores, just as users may cling to Vista or XP. (For you Mac users, that would be something like hanging on to Mountain Lion or Snow Leopard instead of updating to El Capitan.)

Mortgage lenders, in particular, use relatively old versions of FICO. That’s because the agencies that buy most home loans, Fannie Mae and Freddie Mac, haven’t updated their requirements so that lenders can use newer versions.

Some credit card companies offer their customers free FICO scores, typically from one bureau. You can get a glimpse of the array of scores lenders might use by buying the most commonly used FICO, the FICO 8, for about $20 each from MyFico.com. Along with each FICO 8 you buy (you can buy three, one from each of the three major credit bureaus), you’ll get additional versions used for auto, credit card and mortgage lending.

If you’re going to be in the market for a major loan, such as a car loan or a mortgage, it makes sense to buy your FICOs so you can get a better idea of how lenders might view you. If you’re just interested in tracking your scores generally, though, the free versions can be perfectly adequate.

Tuesday’s need-to-know money news

Credit report with score on a desk

Credit report with score on a desk

Today’s top story: Americans are confused over credit card fees and rewards. Also in the news: Using refinancing to pay for home renovations, taking one day a month to be your personal finance day, and how to protect your credit score.

Americans Confused Over Credit Card Fees, Rewards
Cardholders are paying extra, losing out on rewards.

Should I Pay for Home Renovations by Refinancing?
Pros and cons.

Pick One Day a Month to Be Your Personal Finance Day
Getting everything done at once.

Avoid these 3 mistakes to protect your credit score
Taking a proactive approach.

Thursday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: The best credit card tips for May. Also in the news: Tips to weather the financial storm of a layoff, what the new FICO score means for you, and carryovers to remember when doing your 2016 tax planning.

NerdWallet’s Best Credit Card Tips for May 2016
Time for some spring credit cleaning.

Laid Off? 3 Tips to Weather the Fiscal Storm
Don’t panic.

How to save $1,000 each month, and what the new FICO score means for you
FICO changes are afoot.

5 carryovers to remember when doing 2016 tax planning
It’s never too early to start planning next year’s taxes.

Friday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Senior checking accounts. Also in the news: The best Earth Day sales and freebies, five reasons why a nearly perfect credit score isn’t enough, and how to file taxes for a deceased love one.

What Is a Senior Checking Account?
The pros and cons.

Best Earth Day Sales, Deals and Freebies
Thank the planet for the discounts.

5 reasons why a nearly perfect credit score’s not enough
The rules are complicated.

How to File Final Taxes for a Deceased Loved One
Death, taxes, and after-death taxes.

Wednesday’s need-to-know money news

PayRentPiggyBank.157131716_stdToday’s top story: How paying rent can affect your credit. Also in the news: How to protect yourself from cybercrime while banking with your phone, why you shouldn’t consider something “yours” until it’s completely paid off, and financial strategies for creative types without steady incomes.

How Paying Rent Can Affect Your Credit
Rent-reporting services can boost your credit.

4 ways to dodge cybercrime when banking, shopping on mobile phones
Convenience can come with a hefty price.

Avoid Saying You “Own” Something Until It’s Paid Off
It isn’t yours until the last payment is made.

The #1 Reason Artists Struggle With Money, and 3 Simple Strategies to Turn Things Around
Advice for creative types.

Q&A: Fixing a wounded credit score

Dear Liz: My wife and I co-signed on our daughter’s mortgage, then the home went into foreclosure. My wife and I have no debt and a net worth that exceeds $1 million. We purchased our cars with cash and the single credit card we have with a $35,000 limit is paid off in full each month. Since the foreclosure, our FICO score has been in the “fair” range. We have no plans to take out a loan for anything and plan to continue our “cash and carry” lifestyle. However, the low FICO is a little disconcerting. It appears the only cure is time (measured in years). We welcome any additional guidance.

Answer: You can’t fix your wounded FICO scores overnight, but you could speed up your credit score rehabilitation by adding one or two more credit accounts to your mix. At least one of those accounts should be an installment loan, since scoring formulas want evidence you can handle different types of credit. If you don’t want an auto or personal loan, then consider a “credit builder” loan that puts your payments into a certificate of deposit that you claim when all the payments have been made. Credit builder loans are offered by credit unions and some online lenders.

Is it worth the effort, even though you don’t plan to borrow? In most states (although not California), credit scores heavily influence what you pay for auto and homeowners’ insurance. People who don’t have the best scores can pay hundreds of dollars more each year for coverage. Credit scores also may be used to determine deposits for utilities and wireless service. If you need to rent an apartment, your credit scores matter as well.

If none of those are a concern, you can continue to take the slow road to rebuilding your credit, since the foreclosure will fall off your credit reports after seven years. If you want to speed things along, though, another credit account or two should help.

Thursday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: What adding 100 points to your credit score means for your finances. Also in the news: How to finance your dream home improvement projects, how your boss can help you reduce your student loan repayment timeline, and why you should be treating your income like you do your investments.

What Adding 100 Points to Your Credit Score Could Mean
Is it a game changer?

6 Ways to Finance Your Dream Home Improvement Project
Without turning your home into a money pit.

Here’s how fast you can pay off your student loan with help from your boss
Your repayment timeline could could get shorter.

Are You Diversifying Your Income? You’d Better Start.
Treating your income just like your investments.