Tag Archives: Balance

Your Credit Score and How it Works

Posted on by

It is important for consumers to understand how your credit score works.  Since, not understanding how credit scores work can actually hurt your credit score.  Your credit score can affect your financial future and you need a good credit score to get the lowest interest rates on future loans.

Stack of credit cards and dollars.

Most consumers understand that bankruptcy or foreclosure is going to negatively impact their credit score for seven years, but there are plenty of other small mistakes a consumer can make that can turn a good score of 750 or higher into a mediocre 680.

One mistake people make is thinking that carrying a monthly balance on your credit card statements helps improve your credit score.  The truth is that you can build a great credit score without carrying a balance and paying interest on your purchases, according to consumer advocate Clark Howard.

The smart and responsible way to use credit cards is to have a budgeted amount that will go on your credit card each month and pay your bill in full each month.  Clark Howard also recommends that consumers do not charge more than 30% of your available credit card balance.  Preferably, keep it below 10% if you want to boost your credit score quickly.

According to Clark Howard, your payment history makes up 35% of your FICO score and it is important to understand this fact when bills are due.  Consequently, you can attain a good credit score by paying your bills on time and keeping a low credit card balance.

References:

  1. Howard, Clark, Big mistake can hurt credit score, The Atlanta Journal-Constitution, October, 1, 2020, pg. D1
  2. https://finance.yahoo.com/news/7-small-mistakes-that-will-hurt-your-credit-score.html

Principles for Investing Success | Vanguard Investment Management Company

Posted on by

Whatever financial challenge you’re facing, you can put yourself in a better financial position by setting goals, planning now and investing for the long term. The sooner you start, the sooner you’ll get on track.

Investing for the long term in order to grow your money is a marathon, not a sprint. An investment’s annual return provides perspective and growth over time.

https://vgi.vg/2Kyh3a3

Goals: Create clear, appropriate investment goals. Create appropriate investment goals you can measure and attain. Defining your goals clearly and planning realistic ways to achieve them can help protect you from common mistakes that could derail your progress.

https://vgi.vg/3c9ky3b

Balance: Develop a suitable asset allocation using broadly diversified funds. Create a sound investment strategy by choosing an asset allocation in line with your financial objectives. Build your allocation based on reasonable expectations and diversify your portfolio to avoid exposure to unnecessary risks. Balance is the key:

https://vgi.vg/3f7Qh6u

Costs: Minimize costs. Markets are unpredictable. Costs are forever. The lower your costs, the greater your share of an investment’s return. And research suggests lower-cost investments outperform higher-cost alternatives. You can’t control the markets, but you can control your costs and tax liability:

https://vgi.vg/2z6fQEv

Discipline: Maintain perspective and long term discipline. Investing can provoke strong emotions. During times of market uncertainty, you may find yourself tempted to make impulsive decisions or you may experience “paralysis by analysis,” unable to decide on how best to implement an effective investment strategy or when to rebalance your portfolio. Discipline and perspective can help you remain committed to a long-term investment philosophy through periods of market uncertainty.

https://vgi.vg/3c8ihFg

References:

  1. https://www.vanguard.com.au/adviser/en/article/cec-investment-philosophy/vanguards-principles-for-investing-success