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Liz Weston

Q&A: Credit rating after mortgage payoff

July 11, 2022 By Liz Weston

Dear Liz: We are recently retired and will own our home free and clear in about six months. Will not having regular mortgage payments dent our credit ratings? If so, what can be done as a good substitute?

Answer: Your credit scores may dip after you pay off your mortgage, particularly if you don’t have another installment loan such as a vehicle or personal loan. To get and keep the highest credit scores, you typically need both installment loans and revolving accounts, such as credit cards.

The good news: You don’t need the highest credit scores to get the best rates and terms from lenders. Using credit cards lightly but regularly can help you maintain good scores without taking on debt.

Filed Under: Credit Scoring, Mortgages, Q&A Tagged With: credit rating, mortgage, q&a

Q&A: Credit freezes

July 11, 2022 By Liz Weston

Dear Liz: You recently suggested a credit freeze. I agree that’s a good idea, and probably the only good way, to try to protect your credit.

But I’ve tried to periodically unfreeze my credit reports and that rarely goes well. The banks won’t tell you which credit bureau or bureaus they use to check your credit, so you have to temporarily thaw your reports at all three. This weekend, only one bureau worked well. At another, I was able to sign on but got a message the site was temporarily unable to access my information. The third didn’t recognize any of my possible usernames, so I tried my Social Security number and date of birth, which it also didn’t recognize. I’m SURE I don’t have those wrong, so I’d say part or all of their database is offline. More than likely I’ll be able to sort this out on a weekday when the bureaus staff their phones, but so far, I’ve worked on unfreezing my credit for two days and only one of the three services responded correctly.

Answer: Freezing and thawing your credit reports is certainly easier and faster than it used to be — plus, these services are now free by federal law. But as you’ve learned, you need to keep careful track of the credentials associated with your accounts at each credit bureau, including any login IDs, passwords and personal identification numbers.

You can write this information down and keep it in a secure location, but also consider using a password manager. These secure software programs allow you to create unique credentials for each site you visit. Given the prevalence of database breaches, it’s essential that you don’t reuse usernames and passwords. The programs also can help you change your passwords regularly, which is also important in keeping your information secure.

Filed Under: Credit & Debt, Q&A Tagged With: credit freeze, q&a

Thursday’s need-to-know money news

July 7, 2022 By Liz Weston

Today’s top story: 3 lessons I wish I’d learned sooner about booking travel. Also in the news: A scrap of hope for distressed home buyers, is buying a car a two-person job, and the best Amazon Prime benefits you don’t know about.

3 Lessons I Wish I’d Learned Sooner About Booking Travel
Here are three hard-won travel lessons.

A Scrap of Hope for Distressed Home Buyers
The first half of 2022 was a catastrophe for home buyers.

Is Buying a Car a 2-Person Job?
Bringing a friend to buy a car isn’t a bad idea — unless they don’t provide the right support.

The Best Amazon Prime Benefits You Don’t Know About
If you’re going to sell your soul to Amazon, you might as well get everything you can out of the deal.

Filed Under: Liz's Blog Tagged With: Amazon Prime benefits, car shopping, distressed home buyers, travel booking

Wednesday’s need-to-know money news

July 6, 2022 By Liz Weston

Today’s top story: Are 0% interest student loans better than forgiveness? Also in the news: The worst hidden travel fees and how to avoid them, 5 reasons why you haven’t switched banks, and the best app for splitting the check.

Are 0% Interest Student Loans Better Than $10K Cancellation?
Cancellation is the most popular proposal to address student loan debt, but it isn’t the only one out there.

The Worst Hidden Travel Fees and How to Avoid Them
Sticker prices can be misleading. Always make travel purchase decisions based on the final cost.

5 Reasons Why You Haven’t Switched Banks
Enough time, money and motivation can help overcome hurdles when changing banks.

The Best Apps for Splitting the Check
Never again break out the calculator to figure out how much you owe for mozzarella sticks.

Filed Under: Liz's Blog Tagged With: apps, banking, cancel student loans, hidden travel fees, splitting the check, Student Loans

Tuesday’s need-to-know money news

July 5, 2022 By Liz Weston

Today’s top story: How to get therapy when cost and access are a barrier. Also in the news: Mortgage rates stay on the escalator in July, the NerdWallet small business financing index, and how to find out what your health insurance will pay beforehand.

Getting Therapy When Cost and Access Are a Barrier
Many things can prevent you from getting therapy or other mental health treatment. Thankfully, there are ways to access care within your budget.

Mortgage Rates May Stay on the Up Escalator in July
Mortgage rates are likely to rise in July, extending a seven-month streak.

NerdWallet Small-Business Financing Index: Businesses Are Steady Amid Worries
New index measures delinquency rates, new loan volumes and optimism among small-business owners.

How to Find Out What Your Health Insurance Will Pay Beforehand
A new federal law about price transparency just went into effect—but good luck making use of it.

Filed Under: Liz's Blog Tagged With: health insurance, mortgage rates, small business financing, therapy

Q&A: Waiting to collect Social Security

July 5, 2022 By Liz Weston

Dear Liz: I understand your suggestion about waiting until you are 70 to apply for Social Security because you’ll get a larger amount. However, I applied at 62 and no matter how much more I would have received at 70, I would never recoup an amount equal to what I received. My husband chose to wait and died before he reached 70.

Answer: If your husband’s benefit was larger than your own, then his decision to delay was a real gift to you.

When one member of a couple dies, the survivor gets only the larger of the two Social Security benefits the couple used to receive. Losing one benefit can cause a sharp drop in the survivor’s income. That’s among the reasons why financial planners urge the higher earner to wait as long as possible: to maximize the benefit the survivor will have to live on for years or even decades.

If your husband had remained alive, then your early start could have been a mistake. Most people live past the “break even” point where the larger checks you could get from delaying more than outweighed the smaller checks you passed up in the meantime.

Filed Under: Q&A, Social Security Tagged With: q&a, Social Security

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