Did you know that 40 percent of couples wait until they are engaged to discuss their finances? According to a recent FICO survey, some even wait a full year after they’re married – likely a statistic that supports the fact that ½ of all marriages, these days, end in divorce!
FICO’s survey also found:
With survey findings like these facing Valentine’s Day, FICO’s Credit Cupid has solutions which will help your FICO scores in tip-top shape, see below:
1) Maintain a good history of paying bills on time. Payment history is the most important component of your FICO score. People with a long history of paying their bills on time, are expected by lenders to continue their good payment pattern, and will be more willing to extend credit in the future.
2) Encourage good spending habits from your partner. Everyone has their own credit report and FICO score; when couples begin applying for credit together their shared accounts affect both FICO scores. This is why it’s doubly important to pay on time when you’re responsible for a shared account.
3) Don’t overspend on your lover. While it’s easy to get caught up in buying gifts for your sweetheart, spend within your means. If you have a lot of debt, adding more debt or maxing out your credit cards can hurt your FICO score – and potentially your relationship.
4) Don’t apply for credit you don’t need. Your FICO score not only considers the existing credit accounts on your credit report, but also applications for new credit. Applying for many new accounts in a short amount of time can be a sign of looming financial problems, which can hurt your FICO score.
5) Discuss finances with your partner. Your partner’s financial burdens can ultimately affect your credit if you feel compelled to help out with their debts and obligations. Have an honest financial discussion early and avoid surprises later!
Only 43% of consumers will cut back on holiday spending this year, compared to 55% in 2008, according to a Consumer Federation of America survey. While increased consumer optimism spells good news for retailers, for Americans planning to “stretch” the budget, the New Year could bring falling credit scores, and with it, serious consequences.
Here are some fail-safe tips from FICO Credit Guru Shon Dellinger to help enthusiastic shoppers stay financially sound:
1. Be Smart with Credit. Using a credit card is ok – experts agree having 3-5 credit cards helps your credit, if used responsibly. But carrying a balance on your credit card leaves you (1) stuck paying interest that could cost you, in some cases, double or triple the cost of those gifts in the long run and (2) with a much lower credit score, which could jack up interest rates on your credit cards and jeopardize your chance of getting lines of credit elsewhere (buying a house, a car, etc.). Services like FICO Score Watch combat this by providing emails or texts alerting you to any changes in your FICO score (either positive or negative), and notifying you when you’ve qualified for a better interest rate. A credit score increase of 30 points will save the average consumer $105 per year.
For more information on FICO Score Watch, go to: www.myfico.com/Products/
2. Resist “Short Savings.” The salesperson at your favorite department store offers you an instant 20% savings just for opening up a credit card in their name. While that $20 seems tempting at the time, it can quickly put you in debt if you’re not careful. The temptation of the deal is also one reason why the average consumer has a total of 13 credit cards. Opening new lines of credit can also hurt your credit score, so make sure the card meets your overall needs and not just your desire for quick savings.
3. Don’t Wait Till April! Many holiday shoppers use their Tax refund to pay off credit card balances left over from the holidays, which can be incredibly expensive, not to mention detrimental to your credit standing. A credit card balance of $500 dollars from January until April will cost you $237 dollars based on today’s average credit card interest rate.
4. Get Info on Your Credit. Go to the myFICO Forums, where you can connect with thousands of other people all in your same boat. Don’t wait til after the holidays, when the damage is done. FICO is offering 30% off all products on its web site if you enter the discount code MYFICO HOLIDAY.