From the Editor’s Desk

Gary Foreman

Why and How to Keep a Close Eye on Your Credit Score

Hello to all my Frugal Friends!

I recently received an interesting question. Here it is:

“Why would my credit score go down when I have paid everything on time and, in most cases, early? I paid my grandson’s school tuition with a credit card ($7,000), paid it in full when the bill came, and then my credit score went from 820 to 780. I thought paying things off and on time would increase my score. I have no debt, paid off car, and always pay things immediately. What should I do to keep my score high? Thank you, L.”

L is right. Paying your bills on time and in full should help your credit score, not hurt it. Especially to the tune of 40 points. So something else is going on.

So something else must be going on. There are a number of factors that go into your credit score. You can read all about them in Managing Your Credit Score.

Based on L’s question, it doesn’t appear that she’s done anything that should hurt her score. So the next step would be to see if there’s something unusual going on.

I’d begin by checking my credit scores (something that we all should do once or twice a year). You’ll find contact information for the 3 credit counseling agencies here (midway through the article).

It’s possible that L will find an error. Approximately 1/4 of us have at least one big mistake on our credit report. This article on disputing and correcting credit report errors will help you set it right.

When she checks her reports, she might find that there are a number of new accounts listed. That could account for the score dropping. A bunch of new accounts is a sign of identity theft.

If L has been the victim of ID theft, she’ll want to read 5 Things to Do If Your Identity Is Stolen to Regain Control.

If she’s concerned about identity theft, she would want to put a ‘credit hold’ on her Social Security number. That would prevent anyone from gaining credit under her ID.

In any case, L’s score is still in the ‘excellent’ range. That’s the good news. But any time that our credit score drops 40 points in a short period of time, it’s wise to figure out what’s going one. Hopefully it’s something temporary and easily fixed.

Keep on Stretching those Dollars!

For Everyone Who’s Been Hit Hard Financially This Past Year

Hello to all my Frugal Friends!

It was just yesterday that I was visiting with a friend while we smoked some pulled pork for a community outreach.

The conversation turned to the crazy home price increases of the last 2 years. I’ve lived through more than a few up and down cycles in real estate. Many seem more pronounced here in sunny Florida. When the current one will end is anybody’s guess.

I commented that you needed to be nearly 60 to remember the late 1970’s economy. Turns out that my friend was born in 1970 and was a pre-teen during that time. He had some recollection but was surprised when I told him that we were fortunate to get a 10.75% mortgage on our first house with a 30% down payment.

You don’t need to have a lot of perspective to realize that many people are struggling financially during 2020-21. Many jobs have been lost or greatly changed because of COVID.

Perhaps you’re one of those who have been hard hit financially this past year or so. You might find Living on a Tight Budget Simply and Successfully helpful.

In really tough times you’ll want to consider 9 Radical Cost Cutting Tips to Reduce the Tightest Budget. They’re challenging but could keep you from even worse financial challenges.

Speaking of cutting costs, for most families, food is the 2nd or 3rd biggest budget item. And the one that’s easiest to change. It’s not uncommon for us to make food buying decisions almost daily. When Your Food Budget Is Critical will suggest some opportunities for you to save.

One change that’s important when you’re cutting grocery costs is to have a meal plan. Mastering Meal Planning: Time and Money-Savings Tips for Beginners will give you some good tips on how to make a meal plan work for you.

And, if you’re really up against it, Creative Non-Cash Grocery Strategies can suggest some ways to feed your family when your food budget approaches zero.

One challenge when you’re dealing with tight money is to keep upbeat. It’s easy to get down when you’re cutting the amount of meat that you serve your family. Money Games That Can Make Frugality Fun can help keep you and your family from getting depressed.

Finally, we also recognize that sometimes you have to admit that you’re not keeping up with the bills. If you’re falling behind on your credit cards, it may be time to ask Am I a Good Candidate for Credit Counseling?

And, if you’re forced to consider bankruptcy, How Families Can Overcome Bankruptcy will help you understand the ramifications of that decision.

You might be one of the fortunate who have not been financially affected by the COVID economy. I’m happy for you. That means you have an opportunity to help those less fortunate. 12 Ways to Help Others Without Spending Money might give you some ideas.

Keep on Stretching those Dollars!

The Pre-Retirement Checklist Everyone Should Have

Hello to all my Frugal Friends!

We’ve just completed an update of the Pre-Retirement Checklist. You may not be familiar with it. It’s a printable pdf file that you can download (or just read online). It includes:

  • Lifestyle questions
  • Income and expense issues
  • Assets and liabilities
  • Important legal and financial documents
  • Important contacts
  • End of life arrangements

Basically the things that you need to have in order in your later years. Click here to access it.

Under 50? Thinking this stuff doesn’t apply to you? Partly true, but some of the information-gathering in the checklist is probably good for couples of any age to have on hand just in case something were to happen to one spouse. I know that in my house neither my wife or I know everything we’d need to know if one of us were to pass on.

I suspect that’s probably true of most couples no matter what their age. If that’s you, you’ll want to read Getting Your Family’s Financial and Legal Affairs In Order. It covers important issues that you can’t afford to ignore.

Speaking of those who are in their 20s – 40s, you should take a few minutes to read How to Get Started Saving for Retirement in Your 20s, 30s and 40s. The sooner you start, the easier it is to build up a comfortable retirement.

Hope that you have a wonderful week!

Keep on Stretching those Dollars!

About the Author

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, and You can read Gary's full bio here. Gary shares his philosophy of money here. Gary is available for audio, video or print interviews.

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