3 Things that can hurt your credit score

admin — Thu, 27 Dec 2012 01:10:00 +0000

Cancelling Credit Cards

You may be thinking to yourself "how does cancelling credit cards hurt my credit? Shouldn't it help?"� The answer to that question is "not always."� One factor credit agencies look at is the average length of your credit history; the longer your history the better. If you cancel credit cards that have accounts that are relatively older than your other accounts, your average length of credit history will be shortened, and your credit score will go down. If you have an older account that you simply don't need or want anymore, refrain from closing the account. The best thing to do is leave it open even if you stop using it.

Not making timely payments

Another thing credit agencies look at is payment history. If you don't make timely payments to your credit card company when they are due, your credit score will be negatively affected. Make an effort to make sure payments are made in full when they are due. In order to avoid getting into trouble, don't make large purchases that you will not be able to pay off entirely when they are due.

Non-mortgage installment loans

An installment loan is debt that is paid back in increments. Two common examples of installment loans are car loans and student loans. Credit agencies weigh the balance of your installment loans against what you originally owed on the loan. As you make payments you will owe less and less as a percentage of the original amount and your credit score will not be as affected by your loans. Try not to take out loans unless it is necessary. When you do take out loans, borrow only the amount necessary to pay for a modest car or an education.

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3 keys to successful investing

admin — Fri, 14 Dec 2012 21:56:50 +0000

Diversify Your Portfolio

Diversifying your portfolio means diversifying across companies, asset classes, etc. When you invest in multiple companies, you spread the risk. For example, if you are invested in two companies, the likelihood of expecting a return on your investment is very unsure. If one of those companies experiences a loss, it will be more difficult to see a gain greater than inflation. If you are invested in 10 companies, you are exposed to less risk. If one or two companies experience a loss, the gains from the remaining eight or nine companies will likely be enough to offset those losses and exceed inflation. If you are invested in 100 companies you are protected even more against risk. You should ensure that each fund in which you are invested is sufficiently diversified in order to eliminate risk as much as possible.

Invest enough for retirement

Investing should be a priority. However, there is a tradeoff involved with investing. The more you spend now, the less you save for retirement. The amount of how much to invest will vary from person to person and will depend on the needs of those individuals. However, a good rule of thumb is to invest between 10 percent to 20 percent of your income. Those amounts include employer contributions. If you decide to invest 15 percent, and your employer contributes 3 percent, you can contribute 12 percent and meet your 15 percent goal.

Start investing early

The earlier you invest the better. By investing early, you give your investments more time to accumulate. The following example demonstrates the importance of investing early. If one person starts investing $5,000 per year when he or she is 20 years old until they retire at age 60, they will have more than $1,400,000 for retirement if their investments grow at 8 percent per year. If another person starts investing the same amount each year starting at age 21 with the same 8 percent return and also retires at age 60, they will have approximately $1,295,000 for retirement. Even though, the first individual only started investing one year earlier, they will end up with more than $100,000 for retirement.

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Greg Franjesevic – FamilyToday