Archive for August 2014

By Peter Andrew

If your credit score's less than perfect, this could be the most cheerful thing you're going to read all day. That's because FICO, the company whose scoring systems are used in 90 percent of all lending decisions, and two of the three major credit bureaus are making changes that might give your score a boost -- without you having to lift a finger.

In other words, one morning soon, you could wake up with a significantly better credit score, simply because of the way these scores are tallied.

FICO Score 9: the best sequel ever?

In August, FICO announced that it was launching a new version of its credit scoring system. And FICO Score 9 includes some big changes that could save you money the next time you borrow.

The first affects those who have medical collections on their reports. Up until now, these have had the same negative impact on scores as all other debts. But they're set to be counted differently. And the company estimates that the median impact on its 300 to 850 scale for those who have medical collections as the only major negative references on their reports should be a score boost of 25 points.

Others who might benefit include those with "thin files."

By Justin Boyle

In what might seem like a dispatch from the Tell-Me-Something-I-Don't-Know Department, the National Center for Education Statistics (NCES) released data last month that indicate American teenagers have a below-average grasp of personal finance for their age.

The NCES study, known as the Program for International Student Assessment, or PISA, asked 28 million 15-year-olds various questions that tested their financial literacy and problem-solving skills. The results revealed that many kids from the U.S. don't know much about income tax or basic compound interest, let alone financial planning or investment principles.

Is this a crisis? Here's a look at the numbers.

The stats don't lie

First, the bad news: Just 9 percent of U.S. students tested at level 5 or above for financial literacy. That's the level that includes long-term investment planning, big-picture financial concepts and unstated implications in financial documents, which, frankly, many adults don't even understand.

What's more troubling is that 18 percent of U.S. students surveyed tested below level 2 on the study's rating scale.

By Georgie Miller

My husband and I recently moved after living in the same place for over five years. Whew! I'd forgotten how much work it is. While moving expenses can add up fast, your move doesn't have to become a cash emergency. Think ahead and try these strategies on for size.

1. Only move what you have to

There's no sense in moving more stuff than is necessary. Depending on how far in advance you start making your plans, you have several options for getting rid of stuff you no longer want or need.

• Start by selling. If you have valuable items that are in good condition, selling is the first step. Selling items online, hosting a yard sale and consigning items at thrift stores are all options.

• Then try donation. Anything that doesn't sell but is still in nice condition can be donated to a charitable organization. You get a tax break and will have fewer boxes to pack. Plus, many organizations will come and pick items up from your house!