Fair Issac Corporation (FICO) provides credit scores ranging from 300 - 850 to each of the three credit agencies (Experian, TransUnion, and Equifax).  A higher score suggests a lower credit risk, which means a lower interest rate for any money borrowed. Scores are based on five factors:

1. Payment History - 35%
2. How much you owe - 30%
3. Length of credit history - 15%
4. New credit - 10%
5. Other factors - 10%

Because each credit agency collects different information, scores will vary.  Credit scores will also vary within a credit agency depending upon what type of credit (i.e. mortgage, home equity, auto loan) is being requested. 

Timing, or when the report is run, is another factor. For example, if you pay your balance in full every month, but charge a large purchase, a report prepared at that time will show a high outstanding balance, resulting in a lower credit score.  

Paying bills promptly and keeping low balances on your credit credits are the two most important factors in maintaining a high credit score.
 
For more money coaching tips and ideas regarding credit scores, make an appointment with Diane Nissen Friedman by phone (201)447-1137, or email, today.

When I ask my clients what types of investments or holdings compose their IRA, I often get a confused look.  As per the IRS, "An individual retirement arrangement, or IRA, is a personal savings plan which allows you to set aside money for retirement, while offering you tax advantages." 

As the owner of the account, you choose what types of investments ( i.e. mutual funds, CD's, stocks, annuities,and bonds) are to be held in the IRA. 

To create further misunderstanding, there are four different kinds of IRAs: Traditional, ROTH, SEP (Simplified Employee Pension Plan), and Coverdell Education Savings Accounts, all are self-directed, and exist for different purposes. 

The investments held in your IRA must be chosen with care and an understanding of the rewards and risks involved.    Be educated and understand the holdings that compose your IRA.