Can New Changes In The FICO Score Affect Retirees?

Posted by: Aiden white on

A credit score plays an important role in our financial lives! After all, it defines our creditworthiness! Creditors use this score to evaluate the risk of lending money.

Having a good credit score means you can pay off your accumulated debts on time! So, the higher your credit score, the higher your chances of approval for a credit line!

In our country, one of the prominent credit scoring models is the FICO score which was first introduced in 1989 by the then Fair, Isaac, and Company.

In the FICO scoring model, a credit score ranging from about 670 to 739 is considered as a good one!

But recently, Fair Isaac Corporation introduced a new scoring model, known as FICO 10. According to Joanne Gaskin, vice president of scores and analytics at FICO, about 40 million people might notice their credit scores increase by 20 points or more.

But another 40 million people might notice their scores slash by 20 points or more. And about 110 million people might see their credit scores increase or decrease by less than 20 points!

And you know what? These people include retirees too! Yes, you heard it right! Here we are gonna discuss the new FICO score 1O suite. And how it can affect the retirees of our country!

Why is FICO coming up with new credit score changes?

In 2017, all credit bureaus of our country implemented changes to eliminate civil judgment records. And by 2018, all the tax liens were eliminated too from the credit reports by the bureaus. Eventually, many people noticed a boost in their credit scores. This resulted in many people opting for loans that they couldn’t afford to pay off!

However, the new FICO score 10 suite focuses on rising debt levels by the changes mentioned above.

So, we can hope that you will be able to reduce your default payments and improve your financial behavior to maintain a decent credit score!

What are the new changes that FICO is going to implement?

Well, FICO is trying to provide the lenders or creditors a more accurate analysis of your credit risk based on the trended data. For that, it has come up with the new FICO 10 Suite model.

It consists of the FICO 10 score and the FICO 10 T score. Like the previous versions, FICO 10 score will consider these 5 factors , i.e,

  1. Payment history
  2. Amounts owed
  3. Length of credit history
  4. Credit mix
  5. New credit lines

But the FICO 10T is first of its kind! It will contain the information of how you have managed your credit accounts in the past 2 years, like,

  • Your outstanding balances
  • Minimum payments required
  • Amounts you paid on your recent credit card

It means, if you don’t have a history of paying off your outstanding balance amount in full every month, your credit score may drop.

Generally, creditors report an account delinquent when you miss payments for at least 30 days. And once delinquency is reported, it stays on your credit report for approximately 7 years! Eventually, your credit score drops!

But in FICO score 10 suite, late payments are taken much more seriously than the previous versions. So, being late on your payments can lead to a substantial drop in your credit score! That’s why always remember to make payments on time!

In FICO score 10 suite, opting for personal loans might reduce your credit score. Taking out a personal loan to consolidate debts is a common affair. It helps you to pay off your high-interest debts with a single loan. And that too at a reduced interest rate than that of your existing loans.

Well, that’s fine!

But let’s say, you are paying off your consolidation loan. And at the same time, you are using the credit cards for making new purchases. In short, you are building up new outstanding balances along with paying off a consolidation loan. In that case, your credit score will take a hit in this FICO score 10 suite!

So, if you have taken out a personal loan to consolidate your debts, make sure that you don’t fall prey to the credit card debt again! It will be beneficial for your finances and credit score too!

Why is a credit score important in your retirement?

Often, people ask me “does retirement affect FICO score?”. Well, retirement doesn’t affect your FICO score. But yes, how you are managing your credit lines after retirement affects your FICO score!

Many people think a credit score is not that important for retirees! But it’s completely wrong! A credit score is equally important for retirees too! Having a good credit score can help you to get:

  • A lower interest rate of the mortgage
  • A chance to refinance your mortgage if interest rates drop
  • Comparatively lower interest rates for credit cards , auto loans, etc
  • Lower insurance premiums

The bottom line is, credit score remains an important factor in your retirement too! So, you need to improve your financial behavior by paying off your outstanding balances in full and always on time, taking out a personal loan wisely, etc.

Doing so, you can maintain a decent FICO score and relax during your golden years!

How to save money with more than one credit card!

How to save money with more than one credit card!

Posted by: consolidatecreditcard_admin on

Credit cards are always faced with numerous questions, shot by consumers every now and then.

These questions surround many trust factors and the usability of credit cards.
Like, how to save money on credit cards, how to use credit cards the best way, how to use multiple credit cards, and all such lookalikes!
This topic will be concentrating on one unique and interesting question, that is circulating the market in the present days.
I actually liked the question when I first saw it in a finance forum. I felt good realizing that consumers are actually becoming smarter than before, and have now started to take credit cards seriously and positively, more than ever.
The question is, how can you save money by using more than one credit cards(?). Wonderful, ain’t it?
The one line answer to this can be said, that you might save money profusely with multiple credit cards, if they are used the right and sensible way.
Let’s start to evaluate this topic point to point then.

One credit card is one savings account! Here’s how:

Many consumers in this country along with other dignified financial advisors believe, that a credit card can be appraised as a savings account.
This is however undoubtedly a debatable concept, that still needs a lot of refinement and brushing up.
But, I won’t be entering the debate or argument right now, rather just give you little basics, for why can a credit card function as a full throttle savings account.
Imagine, you open up a bank account, that demands a monetary savings only upto a certain limit. Like, you can’t save in that account more than $2000. This is just an example, don’t get fury or anxious right about now!
I know it is totally hypothetical but you have to follow me up, for the time being.
So, this account where you can save only till $2000, is already filled in by the bank, but comes with a condition, that your effort should always be to keep $2K in that account forever.
If you can’t, then you will have to pay a penalty!
Hence, you are getting a fixed limit savings account from the bank, which the bank has already filled with its own cash.
Therefore, whenever you are using money from this pre-filled $2000 fund, that the bank has offered, you have to refill it again as soon as possible, else you will be paying a penalty fee, on the amount used.
Now, shifting to a savings account, you can pretty well say that you are using money from a fund that you have created.
The same thing happens with a credit card, as explained above in the shape of a fixed limit savings account.
Except that this fund is created by the bank itself. But, the moment you use a portion of the fund, you are liable to replenish the used amount to prevent incurring additional interest charges, unlike a traditional savings account.
One way or or the other, all the payments you are making to your credit card is reusable! The money is going nowhere.

How can you save money with more than one credit card?

Based on the point discussed above, you can say that having multiple credit cards is quite equivalent to having multiple savings account.
All the money stored in the cards is accessible to you without any charge, if you can make all the due payments in time.
But, that doesn’t suffice well for how you can save more money with more credit cards!?

Have you heard of the balance transfer method?

This is a great money saving tip!
It is where you take out a separate new card to transfer all your existing credit card balances into it.
This method is also referred to as a subpart of credit card debt consolidation, but we won’t be going deep.
In the balance transfer method, try to take out a card that has a 0% APR (interest rate), and a credit limit equivalent to your total existing credit card debt.
Once you have successfully transferred your old balances to the new card, your old cards become 100% usable.
Also, you have successfully waived off all the interest charges. Hence, you have saved significant amounts.

Credit cards were introduced into the consumer market to promote small scale growth by helping people financially, to achieve their goals and opportunities.
If everyone has to wait for money, before they can buy absolutely anything, then a nation’s economy will fall down heavy hearted!
This will significantly decrease a consumer’s buying power, and development will slow down upto a huge extent.

This doesn’t mean, however, that you should take out as many credit cards as you can, and incur big debt amounts.
A credit card can help you to save money, if you can maintain at least the minimum monthly payments and not make excessive high amount transactions.
Keep all the aspects explained in this post, with proper clarity, and then go on with credit cards for day to day purchases.
Have a happy and debt free life.


How to stop wasting money and start a new life

Posted by: consolidatecreditcard_admin on

It can be scary as well as a painful situation to go through when you realize that your bank balance has drained out and that all you have been doing is wasting your money on unnecessary purchases. Worse, it can put you on heavy debt and can ruin your financial plans.

Not only that, you can become so weak and vulnerable that you would have to constantly pester your friends and relatives to borrow money. As a result, it can harm your relationships with your loved ones.

So, it’s about time that you reflect upon your actions and confront yourself that you may have been very callous about your spending behavior. Also, it is not the end of your life and you can find ways to fix the errors.

On a spiritual level, it can be that God wants you to think about how to start over in life with nothing! Therefore, you can now embark on a journey to find out how to begin your life on a new note. After all, it is the drive to earn money which will give you the edge to earn more and will bring your financial life in proper shape.

How can you avoid wasting money?

a. Keep track of your expenses

The first step you can take to save money is to find out how much you are spending. Keep track of all your expenses, that is from petty expense like tea, coffee to the household items and cash tips. Once you have the information about your expenses in your hand, organize the numbers categorically. Using your credit card or bank statements can be very helpful to analyze what you have spent in the past.

b. Prepare a budget

Once you have a brief idea of what are your expenses in a month, you can think about recording your organized expenses into a workable budget. Your budget must highlight how your expenses measure up to your income, so that you will find it quite convenient to plan your spending and limit overspending. In addition to the monthly expenses, be sure to factor in expense that occurs regularly but not each month, such as car maintenance.

c. Set a goal

If you begin by setting a goal for yourself, then you can definitely save lots of money. You may first begin by thinking that what is that you wish to save for, it could be for a personal luxury asset you want to buy, planning a vacation, or saving for retirement. Then, find out how much money you will need and how long can it take for you to save it.

d. List your priorities

It depends on how you plan your savings which you can decide after calculating your income and expenses. Be sure to figure out your long-term goals; it’s necessary to realize that planning for retirement shouldn’t be postponed at a later stage. Learn how to turn your written goals into a planned action so that you can achieve your desires. For example, if you are in need of a car in the near future, then you can start putting money right away to buy a new one.

e. Choose the right option

If your goal is to meet with short-term goals, then consider using the savings account and the certificate of deposit. And, if your goal is long-term, then consider securities like stocks and mutual funds. Make sure whatever option you choose, it is FDIC insured.

f. Watch how your savings grow

Check your budget and watch the progress as it grows each month. This will not only help you stick to your personal savings, but also will help in identifying and fixing the errors quickly. These simple techniques to save can also inspire you to save more money every day and hit the goals faster.

How can you start your life again once your finances have started collapsing?

Starting all over again is not that difficult. Obviously, there are risks involved and there are many doubts regarding the losses one can experience out of a bad investment strategy.  In addition to that, people have many things to say when you are running low. They can influence your decision-making skills and can practically put you down.

But you need not worry because over here we will suggest you the ways in which you can win over and clear your obstacles.

1. Motivate yourself daily

First and the foremost thing you should do is refresh your mind and think about the ways in which you can gather the courage to start afresh. Read inspirational quotes which are available online or go for self-help books. Reading can definitely change your outlook and can directly impact your actions as well. The result is, you can turn out to be more productive than before, you can gather innovative ideas for your business ventures or personal investments.

2. Invest, invest, and invest

Yes, that’s how you can come out of your financial depression. If you don’t have cash then obtain it by selling your securities or personal assets. The money you derive from that can be utilized to invest in small business ventures or perhaps the stock market. Once you see that the capital money has multiplied, you can repeat the same process and make more money in the future.

3. Go for credit counseling

In case, you are in debt and wondering how to overcome it then you must go for credit counseling. When you opt for this, the experts will give their opinions on matters which can take you out of debt.

4. Consolidate your debts

Yes, having multiple debts can be really bad. It can seriously damage the future of your finances and can ruin your family life. So, you can opt for debt consolidation through which you can significantly reduce your multiple debt payments with one, and with time, shredding off your debt burden.

5. Work for an extra number of hours

Do not feel let down by a small defeat. You can still work and work harder to mend ways. Take it as an opportunity to increase your productivity and earn more cash. As a token of inspiration, always reward yourself to feel motivated. As you see more money, you will naturally feel that the hurdle is minimized.

6. Travel to gain positivity

Yes, traveling helps. It can wash away all the negativity and boost your energy. Going on a trekking experience or enjoying beachside fun with friends and family can bring harmony in your lives so that later on you can clearly focus on work-related activities.

7. Enroll in a meditation program

Lots of Americans are turning to the east to gather inner-peace. It is a good way to make your mind stronger. Not only that, it improves your health at the time of an adversity. You can also feel rejuvenated once your mind is settled.

The final words

You may be having lots of questions about how to avoid wasting money or how can you think of starting life over after losing everything?.

You might feel depressed when your finances are not in good shape and you are striving hard to get out of it.  So, gather courage and solve your problems. Look for healthy solutions. They have already been stated in the article. You can use it as a reference to improve your financial situation.


9 Ways to achieve financial independence sooner

Posted by: consolidatecreditcard_admin on

Do you feel if you could go back in your 30s, then you would manage your finance differently? Do you wish to go back in the past to get more time to prepare for retirement? You’re not alone. There are many people who are struggling in their retirement. Most of them are drowning in debt burden even after retirement. Some people have to stretch their work life to survive. They often regret the financial mistakes that they did.

Some people have achieved financial independence at an early age. They have proved that achieving financial independence sooner is possible.

How can people achieve financial independence?

Saving more is the key to achieve financial independence at an early page. Apart from it, you have to plan your finances carefully.

Here you go:

  1. The more you save, the sooner you can announce retirement

    The best way to secure your financial future is by saving money. You need to decide how much money to set aside to pay yourself every month. The amount can depend according to your income; no matter how much your monthly income is. Try to make a habit to save as much as possible of your gross monthly income. It will help to make some positive changes in your financial graph. Save more in a case of higher monthly income.

  2. Enroll in your 401(k) account

    According to the most financial experts, you must enroll in a 401(K) account to secure your retirement.

    If you’ve still not enrolled in your company’s retirement account plan 401(k), then you’re lagging backward. The 401(k) account is an unparalleled savings option. It will help you put in your pre-tax dollars and qualify for an employer match that could help you literally to save free money. Keep updated on the third-party investment advisory services to avoid confusion on this subject.

  3. Start investing money

    Be always confident when it comes to investing money. Invest money in the safe investment vehicles but make sure you have enough funds available at your disposal to fight any financial emergency.

  4. Questions that you should ask before investing

    Before choosing an investment opportunity, it is important for an investor to ask a number of questions like:

    • In what way the various investments match your objectives and which is the best one for you?
    • How easy will it be for you to sell off the investment?
    • How much will it cost you to buy, hold, and sell the item you are going to invest in?
    • What are the returns that you can expect on the amount you had invested and when can you get back the money?
    • From where can you get more information about investments?

  5. Invest in mutual funds

    Stick to investing in low-cost and no-load mutual funds that can help you gain huge returns on minimum investment. Clever investment can often be beneficial for those who are looking for ways to build wealth.

  6. Be the early bird

    You need to start early to get better investment results. Remember, the type of financial instrument you’re choosing and the age you’re starting off are very important.

    For instance, a person who starts contributing $100 a month when he is 22 will earn more than a person who wants to be 32 to set aside $100 per month. If their money grows at a rate of 8%, the first person will have $234,600 and the second person will get $177,400 (If they both retire at the age of 64). This proves the importance of investment at an early age to build wealth and address your financial obligations. So, make the decision wisely.

  7. Live a frugal life

    Leading a frugal life is the ultimate secret when it comes to achieve financial independence. You should try to save as much as possible on daily basis. Living a frugal life can help you to do that.

    Living a frugal life doesn’t mean you have to deprive yourself. You just need to prioritize saving money. Spend money on what you need instead of on wants.

  8. Don’t welcome debt

    If you are in huge debt, you have to pay them off as early as possible. The sooner you get out of higher interest rate debt, the quicker you can start saving money for your future. You should get financial advice to get out of debt faster. After that, you shouldn’t accumulate further debts in the future. To do so, you have to build an emergency fund that works as a debt shield.

  9. Increase your earning

    Traditional income is not enough when it comes to achieve financial independence at an early age. You should find out other income sources to increase cash flow.

    For example,

    • You can give rent to a portion of your home.
    • You can start blogging.
    • You can do part-time jobs.

Lastly, most of the Americans forget to plan their retirement as they’re far busier with planning their vacations. As a financially responsible citizen, it is your duty to plan your retirement so that your finances do not go out of control when you have no mainstream income. If you truly want to enjoy your life, then secure your financial future fast. This is the ultimate key to achieve financial independence and early retirement.

Those who don’t want to retire early also need to secure their financial future. Otherwise, you may have to work till their death or live a poor life in their golden age.