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Credit Scores

October 31st, 2013 at 03:25 am

If you're like me, you've wondered at some point how they come up with that strange "credit score" that all of our borrow, and many of our payments are affected by, if not controlled by. I was browsing the Experian site, and came across the following.


30% of your credit score is based on your credit usage
Credit usage refers to how much money you've spent on accounts that have credit limits, such as credit cards. Also called a utilization rate, it measures your total balances compared to the total of your credit limits. High credit usage or utilization rate is a strong indicator of credit risk and can lessen your ability to gain new loans.

31% of your credit score is based on your payment history
The most significant factor in determining your credit score is your payment history and making your payments on time. Late payments remain on your credit report for 7 years from the original delinquency date. The original delinquency date is the payment date that was first reported late by your creditor.

15% of your credit score is based on the age of your accounts
Having a lengthy credit history shows lenders you have an established record of managing your debt. Closing older accounts, such as credit cards could negatively impact your credit score. Experian retains closed accounts with no negative information associated with them for 10 years from the date they are reported closed. As a result, positive credit information remains on your credit report longer than most negative information, such as late payments.

14% of your credit score is based on the types of accounts you have
There are four basic types of credit: Real Estate Loans, Installment Loans, Credit Cards, and Retail Cards. Having a good mixture of credit types along with high quality accounts, such as a mortgage loan, shows lenders you can manage your credit responsibly.

10% of your credit score is based on inquiries or "credit checks"
Every time you apply for credit, a "hard inquiry" is placed on your credit report. Having too many hard inquiries could indicate to lenders that you're trying to overspend. Hard inquiries stay on your report for 2 years.


So that's at least how one bureau does it.

Updates, Not All Financial

October 29th, 2013 at 02:17 am

I guess I've waited long enough to post again here.

My mother and father are doing as well as can be expected. My father had a simple heart procedure - pretty much an external one-time pacemaker-level shock - to quiet his atrial fibrillation. Everything is now hunky dory, there. He also had a stress test and pretty much passed with flying colors. He has the heart of a thirty year old. Not bad for a 78 year old, I'd say.

On the not-so-good side, my mom's dementia is progressing. She's also been diagnosed with mild osteoporosis. My younger brother (divorced and kids are grown) moved in with them to help them out. My dad is in great shape, but he is still 78 years old. Getting old really stinks. Baby brother is now job hunting in the Richmond, VA area. I don't know the job market there, but he's always managed to do well. I'm just glad there's someone younger around in case my folks need the help.

MIL is now in a convalescent home recovering from her surgery. She's not extremely healthy, but they're very optimistic that they got all the cancer. They're still putting her through a round of treatment (I think radiation), but I think that's more precautionary more than anything else. She is slated to be back in her house before Thanksgiving.

My knee MRI results are "bad, but not bad enough for surgery." They didn't add, "So deal with it," but it almost sounded like they said it, to my ear.

On the financial front, DW has finished installing the new french doors. I really like them, and they came in a few thousand dollars under budget, but still a few thousand more than I wanted to pay. I will admit that the installers did a better and much quicker job of it than I could have done. I know they're better than the old doors, because when DW and I were on Facetime, she opened the new door, I immediately heard the train whistle from about ten blocks away. With the old doors, I'd have heard the train before she opened the door. DW also says they seal better than the old doors. Maybe this will get our utility bills under $100 per month. That's a milestone I wouldn't mind hitting. The bills were originally in the $400 per month range when I first started energy upgrades.

The painters have also finished repainting inside and out. When they started, I felt this wasn't really necessary, but they found some water damage, which was repaired relatively early. If they had not found that damage, I'm sure I would have had a much larger bill to fix the additional damage whenever the damage would have been later found. So, although I didn't want the house repainted, it was a good thing DW had it done, after all.

Debt repayment is progressing apace. The doors are two payments away from complete. We put them on a 0% card just for the convenience factor. We could wait longer to pay them off, but I'm just as glad that they'll be paid off before January. I hate credit card balances. DW's car payoff is going OK. Still a ton owed, but with a 1.19% interest rate, I'd rather leave my money in the mutual funds than pull it out for the car. We'll just cash-flow the payments. It should be paid off in less than two years, and maybe sooner.

I sent the "contract" about the Bank of Mom & Pop loan to DD2 and SIL2. I told them that there was no need for a signature - it's not like we'll sue them if they don't repay it - but I wanted to make sure everyone was aware of the terms. I included a "late payment" penalty of 1% per month after 90 days, but I set back the "first payment" date to January of 2014. They were happy with the terms (0% interest and about a ten year term), which is not surprising.

About my bonus... I'm quite upset. They still haven't paid me for my April bonus. They have reasons, but those reasons are now sounding like excuses to me. Things go more slowly over here, but we are beyond a reasonable delay, in my mind. I plan to speak to our CFO tomorrow to sort this out once and for all.

I will be traveling back to the US over the Thanksgiving holidays. I hope to see my folks and all of my brothers. All four of us children are planning to be there, but I haven't got the details of their planned visits. Time is growing short, so I need to get on the stick about this. It has been over 25 years since all four of us got together at the same time. Two of us live in Texas, though I reside in Dubai. One lives in the DC area. My folks are just outside Richmond, VA. Baby brother just moved in with my folks from Kansas. Maybe his move means we'll all get together more often, but probably not. We keep in touch by phone and such, but to actually get all of us in the same city has just not happened much. It is mostly my fault, as I've lived in Europe and the Middle East for much of my life, and traveled frequently for my entire adult life, rarely visiting when I'm not on the road.

DW and I slowed our mutual fund purchases to cover the water damage repairs. It turns out we pretty much skipped October, but we'll make it up in December, or when I get my bonus. I could pay off DW's car with the bonus, but it's ear-marked for retirement instead. That's part of the "great car compromise" DW and I made. DW's early move back to the US is having more of a financial impact than I would have liked. She has held off on buying new furniture, at least, other than the beds and other assorted items. Only one room really needs new stuff, but of course it's the living room. That's better than another Tempurpedic mattress, anyway.

More Medical Maladies

September 17th, 2013 at 08:16 am

My father is 78 years old. He's in excellent health over all.

I got an email from him. He was admitted to the hospital with atrial fibrillation. At least, I think that's what it is called. They monitored him overnight, then changed his prescription for BP medication and released him. He's downplaying it, but 78 years old is still 78 years old.

The same day as the above, I finally went to the doctor. I told him what happened, and will be having an MRI soon. The orthopedist thinks I've torn my ACL (is there more than one of those?). The thing is, I tore it when I was in my 20's, but it's just now causing me intense pain. I must have turned my knee wrong while working or climbing onto a drilling rig last week. I'm in a knee brace, taking pain meds, and rubbing cortisone on my knee three times a day.

MIL had a scan done, and the doctors are very upbeat about her condition. They think that a mastectomy, removal of the lymph nodes, and a short period of radiation treatment will take care of all of her issues. Prayers or wishes for the doctors' correct prognosis are welcome.

DW, at least, is doing well. She's mostly moved back in, and has finished most of the unpacking. Our storage locker has been released, so we're now $132 more per month into our pocket. The price had just increased two months earlier. I forget what it had been, but it was around $10 per month cheaper. She is upbeat about her mom when I talk to her, but I know she must feel stressed.

I offered both DW and my father the option of me coming back for a couple of weeks. Both of them declined. I'll wait and see, and keep my options open.

I can't win for losing

September 15th, 2013 at 06:28 pm

This isn't very financial in nature, though it definitely touches on financial plans.

The doors arrived and once unpacked were damaged, so the house updates are not even started. Most of the interior is painted, and DW has moved everything out of storage and back into the house. That's $132 (there was a recent increase) per month no longer being paid out.

We received news that MIL has breast cancer that has already metastasized to the lymph nodes. MRI coming soon to see the extent. DW will be going up to visit, so that's a plane flight that wasn't planned. Also, dog watcher to pay. Also, all the other associated travel bills.

Of course, DW had already allocated the main EF for her move back to the US, so we're hitting investment funds for this; not already-invested money, we're just not putting any more toward retirement while we get over this hurdle.

Luckily, I have a bonus coming within the month. That should set things right again, but some of it will need to be sent to Uncle Sugar for taxes. Just when we needed the cash, too.

At least DD2 has finished her move in to her new place. I'm sure she and DW are glad to be under different roofs. (editor's note: Why is the plural of "roof" = "roofs" but the plural of "hoof" = "hooves?")

We've postponed DW's return to Dubai so she can take care of her mom. Sometimes you just have to make sacrifices for the good of others. DW lost her father years ago, so her mom is all she has left.

Both of my parents are still alive. My father is doing very well; still very active in his late 70's. My mother, though, is having severe age-related memory problems. It is not impeding her apparent quality of life, but her lack of short-term memory is very noticeable. She's seeing specialists and on medication. My father says her symptoms seem to be arrested at the current stage. It's really quite sad to see this happen.

Getting old stinks, but it certainly beats the only alternative I'm aware of: dying young.

What is your life worth?

September 11th, 2013 at 08:09 am

So, you would think that this question would be philosophical, but in my case, I think it is literal. I've been in contact with a company in a very unsafe country, especially for Americans.

I qualify for the position they need to fill - there is no doubt of that - but eventually, I'll be required to state how much money it would take to get me to the location.

I've been in dangerous locations in the past. In the military, I was shot at and had mortar rounds lobbed my way. They didn't pay me any extra. We weren't even in a combat zone, because of Congress. Personally, I figured if someone was trying to kill you and folks around you, it should count, but I'm not a lawyer or tax accountant, so what do I know?

The position I have now has great growth potential, and I'm in a secure area. It pays well. I have a great bonus plan and its limit is pretty much set by me.

The question becomes, how much would you have to get over and above your present position to go somewhere that is relatively unsafe? Figure you'll be there for ten years, for maximum benefit.

What do you think? Is $100K per year enough? How about $250K more than you're making now? Or would you need even more? I'm considering the position, but I know the "How much would you cost" question will eventually be asked.

How much is your safety worth?

...And One Step Back

September 4th, 2013 at 10:34 am

Well, the elation didn't last long.

Just got a call from DW. It seems that when the painters showed up to do the back bedroom - let's just say that DD2's style doesn't match our own - they found a sponge where the wall should be in the closet.

Further investigation (tearing out not-so-drywall) revealed that there was some damage to the sill plate, and water coming from somewhere.

The good news is that it is not from the plumbing. Apparently, our AC drain is too close to the wall, and it's been seeping onto our slab and from there to the wall. It was caught early, but it's going to cost about $1K to fix it. If I were there... maybe $100.

Anyway, the main problem is to eliminate the situation and then repair the house. Total cost will include new sill plate, some dry wall, some texturing to match the existing wall, and the paint.

That doesn't sound like one thousand dollars to me, but it certainly looks like that on the quote sheet. I have to pay. This is yet another cost of living overseas while maintaining a house in the US.

Baby Step 15

August 31st, 2013 at 08:24 pm

Anyone who has listened to Dave Ramsey (insert evil or triumphant music here, depending on your proclivities), knows he suggests "baby steps" for paying off your debt.

As a reminder, his steps are:

1. Save $1000 for an emergency fund.
2. Pay off all consumer debt sans mortgage.
3. Save up 6 months of expenses.
4. Put 15% toward retirement.
5. Save for kids' college.
6. Pay off your mortgage.

The last time we were paying off debt - and now we're doing it again, but that was last month's biotch - we didn't follow his plan for the debt snowball (lowest balance to highest balance). We also didn't follow the debt tsunami (highest interest rate to lowest interest rate). We followed the "loans then lines of credit." DW and I figured it's easier to not ask for another loan (paperwork) than to leave a credit card alone (swipe! cha-ching!).

Fast forward to now. DW just bought a new car, made some home improvements, is buying some furniture, and loaned some money to DD2 and her DH for their new house home improvements. So, we have consumer debt again as well as our mortgage.

So, we're on baby step 15:

We're paying off her new loans at a good clip (yes, already): Baby step 2
We're saving up the emergency fund again: Baby step 3 (total: 5)
We're putting more than 15% toward retirement (baby step 4: total 9)
And we're paying down the mortgage (Baby step 6: total 15)

This is possible because the "great car compromise" included NOT buying another house. We aren't building that fund until baby step 15 (or at least through "9") is done. I think we've already got step 3 back in place, more or less. I still have the "float" and there is still quite a bit of "furniture money" in the checking account, so I'm not worried on those lines. I would like a bit more cushion, though.

We should be back on an even keel - only car and house, with full EF - before the end of the year, with both the car and house still being attacked quickly.

Won't Power

August 24th, 2013 at 07:19 pm

"Won't Power" is a new phrase I've just coined. It is the opposite of "will power."

How do you use your won't power? When you're at the store and you see a cute outfit that would be great for work, but that you don't have in your budget? You tell yourself, "I won't buy it." When you pass by the candy aisle at the grocery store, you tell yourself, "I won't need those calories." When you see the iPhone X come out, you say, "I won't need any new functions, my old phone still does what I need."

How do you develop "won't power?" You keep looking at the big picture down the road. Do you want a house more than you want those shoes? Do you want to fund your children's college more than you want that mocha latte? Do you want to get rid of your debt more than you want another 0.3 inches on your phone screen? Do you want to retire and travel to see your grandkids, or do you want to rely on social security to pay your electric bill?

I think I've got some problems keeping my won't power at full strength, but it's definitely better than it has been.

Lastly, the bane to "won't power" is "want power." If you really, really, really want that big screen TV, it's hard to muster the "won't power" to overcome the urge. Maybe tape a picture of your child and a photo of your diploma to your credit card. That should tend to limit the want power and reinforce the won't power, I would think.

Work Woes

August 12th, 2013 at 02:47 pm

Well, I'm up at 1:40 in the morning because of work. We had a meeting with a big client today, and things did not go well.

We're involved in a huge project, and since we're the electrical group, we're always the last ones to finish. Mainly, this is because we cannot start until everyone else is finished. For illustration, think about a house being built: You can't pull wire until the walls and roof are up, and you can't hang fixtures until the drywall and painting are done. It's the same, but different, on large industrial projects.

We're at the final push on this large project. Since "everyone else" is done, electrical is being told we have to finish everything ahead of schedule to keep the entire project on schedule.

I'm up early to work out team schedules to see if we can do three weeks of work in one week. I'm not extremely optimistic, but if I can come close, then we'll be heroes.

I'm not expecting to be heroes. We were given a very large part of the project on 25 July because the shipyard abdicated the ability to finish it in time. They've been working on it since March. We have to have it done and tested on the 22nd; less than a month in total.

The real problem with this is that even if we finish on time, we'll get no recognition for it. And the reason I'm actually upset? I was lied to by the client's project manager. It was all I could do to keep my mouth shut and not call him out on it. I guess this is why they pay me to do this job. There's no way I'd do it for free.

No Printer yet

August 7th, 2013 at 06:53 pm

After work today (tomorrow starts a long holiday weekend), I stopped by three different electronics stores. I was looking for the Canon portable printer that's most similar to the IP100. I have an IP90, and I had both an IP70 and another IP90 over the years. I like the quality and durability of the canon portable printers. For reference, I bought an HP portable, and it didn't even survive its first trip offshore.

I went to three different retailers over here, and none of them carried the printer in question. You can definitely find this printer here, but I will have to make a trip to the one store where I know it was carried earlier this year when I saw it and didn't buy it.

Dubai is very cosmopolitan, but the political structure segregates different brands to the importer who got the exclusive contract. If the brands don't choose an exclusive importer among the Emirati elite, they don't get in. It stinks for those of us peons who aren't benefitting from the lack of competition, but it keeps the income of the powerful at a reasonable (from their point of view) level.

I know the same store also had my scanner, so that's where I'll be shopping today.

See? I can spend money if I have to.

I just haven't done it yet.