Smart Spending Tips discusses changes in the U.S. credit landscape with a credit snapshot in July 2024. The concept of credit in the United States has undergone a fascinating transformation. From its humble beginnings as a tool for merchants to extend trust to customers, it has become an intricate part of the financial ecosystem, fueling economic growth and shaping individual financial journeys. Today, the state of credit in the USA presents a complex picture, with positive trends like rising credit scores coexisting alongside lingering concerns about debt levels. A nation of borrowers The USA boasts a credit-driven economy. Consumers rely…

Smart Spending Tips discusses recent credit score gains and why the rising trend may have ended. FICO recently announced that the US average for its widely-used credit score reached an all-time high earlier in 2023. That’s good news, but it has some strings attached. There are several reasons to believe that some recent credit score gains may not be sustainable. Consumers with newly-improved scores will need to be vigilant to make sure their scores don’t suffer a relapse. Most of all, consumers must be aware of several conditions threatening their credit scores. Sustaining a good credit score may mean adjusting…

Smart Spending Tips discusses the value of reviewing three-bureau credit reports. Understanding your credit health begins with knowing your credit scores and reviewing reports from the three major credit bureaus, TransUnion, Experian and Equifax. Each bureau collects and maintains credit data supplied by lenders. This information is compiled into a credit report tracking your historic behavior with credit and loans. The credit reports and credit scores produced by the three bureaus are not identical and reviewing all three reports is the only way to understand your complete credit picture. Such a review might seem daunting, but understanding the factors that…

Smart Spending Tips discusses how poor credit affects your net worth and steps you can take to better manager your personal finances. Creditworthiness and net worth are two key concepts in personal finances. They are distinct but interconnected. Creditworthiness refers to your ability to borrow and repay money, while net worth measures the value of what you own minus what you owe. Poor credit can significantly impact your net worth, affecting your overall financial health. Understanding creditworthiness and net worth Creditworthiness is a measure of how likely you are to repay a loan or credit card debt. It is often…

Smart Spending Tips asked six regular contributors to Sesame Speaks, the Smart Spending Tips blog, to comment on the statement, “You are financially more than your credit score.” Your credit score is just one piece of information that lenders use Your credit score is a snapshot of your credit history and how you have managed debt in the past. Although important, it is not the only component that lenders consider when evaluating your applications for loans or credit cards. Other financial factors include your income, debt-to-income ratio, employment history, and savings and investment balances. Building an emergency fund, creating a…

Smart Spending Tips highlights 20 reasons it’s a good idea to build your credit. Responsible credit behavior allows you to build your credit and achieve financial freedom. Here are 20 reasons why it’s important to build your credit: Better interest rates. With a higher credit score, you may qualify for better interest rates on loans and credit cards, which can save you money over time. Increased borrowing power. A strong credit score can give you more borrowing power, allowing you to qualify for higher credit limits and larger loans. Lower insurance rates. Some insurance companies use credit-based insurance scores to…

Smart Spending Tips discusses the AI revolution and how it has ushered in a new era of financial assessment. The landscape of credit assessment is shifting, driven by the transformative power of artificial intelligence (AI). Traditionally reliant on historical data and credit scores, lenders now embrace AI-powered algorithms to evaluate creditworthiness Beyond traditional credit scoring AI enables lenders to analyze vast amounts of data from diverse sources, going beyond factors used to calculate traditional credit scores. This includes alternative data such as social media activity, online behavior, and transaction patterns. By considering a broader range of factors, AI algorithms can…

Smart Spending Tips with four credit management letters that may help you on your mission to build great credit. If you’re trying to build or protect a good credit rating, credit report blemishes won’t help. What may help is a well-written letter. These four letters can help you discover if a debt is your responsibility, help you remove incorrect credit entries or even delete accurate (but damaging) information.  Debt validation letter. When you receive a demand for payment from a debt collector, you’re entitled to proof that you owe the money, including the creditor’s name and the date you incurred the debt…

Smart Spending Tips discusses protecting your credit health and identity with credit monitoring. Protecting your credit health and identity is extraordinarily important. A poor credit score could cost you thousands yearly in higher borrowing, insurance, and home rental costs. And bad credit can stop you from getting the job you need to get out of financial trouble. Meanwhile, identity theft is a growing problem that affects 1.4 million Americans each year. It can ruin your credit and obsess your mind while trying to untangle your finances from the fraudsters’. Credit monitoring can be an effective way of protecting your credit…

Smart Spending Tips discusses credit report inaccuracies and what happens when you dispute something on your credit reports. You may be surprised at the number of people who have checked their credit reports and found inaccurate information. Finding a mistake on one or more of your reports can be frustrating, but do you know what to do if you find such an error? What inaccuracies could you find, and what happens when you dispute something on your credit reports? A surprising number of credit reports contain errors or inaccurate information. These errors are frustrating and can have a negative impact…