Legally joining your lives through marriage is a big deal in countless ways, and money matters are a hot topic for many couples. Deciding whether or not to join accounts is only one piece of the financial picture. What do you know about the other elements, like your credit score and taxes?
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Most lenders use your FICO scores to determine your credit worthiness, but typically it costs you money to retrieve your own score. You have three FICO scores (one from each major credit bureau) based on the information each bureau keeps on file about you. If you don't want to shell out cash every time you have the urge to check your score, there's a solution for you.
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Houses are the cheapest they've been in years, and first-time homebuyers can claim an $8,000 credit if they become owners before December. The time might be right for you to dip a toe into the housing market, but your credit score needs to be in tip-top shape to land a loan. Follow my tips for improving your score to get the best possible interest rates.
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An excellent credit score will get you the best interest rates, so you want to ensure lenders will see your score at its very best. You already know that it's a bad idea to apply for new credit in the months leading up to applying for a loan, but CNN Money has another tip regarding the credit cards you already own.
To play it safe, they recommend keeping your cards under wraps during the month before you know you'll be applying for a loan and explain that, "Even if you pay off your balances at the end of the month, there's a chance a lender might pull your score the day before those payments are recorded, making it look as though you're tapping your credit."
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One of my best girlfriends is in the market to purchase her first home with her new husband, and before applying for their loan she called to ask a question about her credit score. She wanted to know whether or not it was a good idea to open a new Amex card — she and her husband are antsy to start earning points. I answered her question the best I could; the answer is below, along with three other facts about credit scores.
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Dear Savvy,
Over the last couple years I've been really working on improving my credit, and in December I bought my first home! It just recently showed up on my report and has definitely increased my score. But my question is, how do the three reporting agencies vary so much?
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Dear Savvy,
So, I got a letter in the mail today from my credit card company telling me that they were lowering my credit limit. I don't use this card much, don't carry a balance on it, and definitely don't need a $14,000 limit. I'm just wondering, does it affect my credit score or anything?
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The biggest factor in your credit score is your payment history; at 35 percent of your score, punctuality has never been so important. While paying on time should be your number one priority in raising your number, you need to simultaneously work toward improving the second biggest factor in your score: outstanding debt. It accounts for 30 percent, so whittling down your debt will have a big impact on boosting your score.
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It's simple: the higher your credit score, the lower the interest rates accessible to you. Now that lenders have started being more attentive to the credit histories of potential borrowers, there's one more reason for you to pay more attention, too. Once you know your credit score, you should do everything you can to raise your number so that you save as much money as possible on interest rates.
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Dear Savvy,
Does applying for a supplementary credit card on someone's account affect either person's credit rating?
Savvy says: There are a couple of reasons why you want to grant another person access to your card, but the effect is the same no matter the reasoning behind it. Perhaps you want to add your partner to your account for the sake of convenience, or maybe you are trying to arrange a piggybacking situation.
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