It’s no secret; the economy is recovering very nicely from the coronavirus pandemic—as you can see in the GDP (Gross Domestic Product) graph below. And for the third quarter, GDP growth is forecast to reach even greater heights—a stunning 7%!
This strengthening has been a boon to both investors and consumers. As you know, the stock market, as evidenced by the S&P 500, has climbed 19% so far this year. Most investors have made money, and that pot of cash has helped fuel the current consumer spending binge, which grew 11.8% in the past month.
The downside is this: With the economic picture so bright, it’s easy to get ahead of ourselves and spend money we don’t really need to be spending.
Consequently, this is the perfect time to think about what shape you want your finances to be in when the good times inevitably end—which we know will happen with the next economic cycle. It’s smart to shore up your finances now, before that occurs.
And to find out just how good your financial condition is, you need to know your credit score.
You can’t turn on any television program without seeing an ad citing how easy it is to improve your credit score. In general, that’s just not true. Once your credit score has been damaged, repairing it can be much more complex than you might expect.
It’s actually pretty easy to damage your credit. When we’re young—unless our parents teach us about maintaining healthy credit relationships—we often do foolish things with our money. It’s not always due entirely to a laissez-faire attitude, but some fault must also be shared with the companies that bombard college students with easy-to-get credit cards. And that often turns into big trouble, leaving the students with a black mark on their credit report.
But bad credit decisions aren’t exclusive to the young. As we move toward our middle-age years, that same easy credit allows us to purchase a more expensive car that we can realistically afford or a house so expensive that we can’t furnish it, etc., etc.
Years ago, I used to manage a bank in Palm Beach County, Florida, in a very exclusive neighborhood. Many of the folks who parked their Ferraris in my lot also owned fantastic homes—on the outside. Not so much inside—their money was expended to buy the house, with little left over for furnishings. They were—literally—in over their heads, spending more than they earned to make an impression.
You get the picture.
Fortunately, these good economic times have helped a lot of folks get out of those kinds of tight credit situations. In fact, the Consumer Financial Protection Bureau reports that the average credit score in the U.S. stands at 710—an all-time high. That score is considered “good.” But it’s not “excellent.” And it’s the excellent score that you need to claim to get the best interest rates on your large purchases.
Read the feature article in this month’s magazine now to get everything about your credit score explained, including:
- What is a Credit Report?
- Credit Reporting Agencies: The Big 3
- What is a Credit Score?
- Explanation of the 5 FICO Credit Scores
- Why Your Score May Be Different among the Credit Bureaus
- Why You Should Frequently Check Your Credit Report
- How to Get Your Free Credit Report and Score
And when you read this article in the September 2021 issue of our Magazine, you get action-oriented advice about optimizing your credit score, including:
- The Top 10 Actions that Will Increase Your Credit Score
- The Top 10 Actions that Will Decrease Your Credit Score
- How to Correct Errors on Your Credit Report
- Consider Placing Fraud Alerts or Freeze Your Accounts
- Credit Repair Agencies—Are They Worth it?
In this feature article in the September 2021 issue of our Magazine, you’ll learn all about the importance of your credit score. Read this article now, and get everything else in this issue of our magazine, too, including:
- All About Credit: Check and Improve Your Credit Now so You Won’t Pay for it Later
- Want to Buy a Good Stock after Bad Earnings? Wait Three Days: If a stock on your watchlist nosed down after a bad earnings report, it may look like a discount but you’ll want to apply the Three-Day Rule before pulling the trigger.
- Why You Should Invest in these 5 Manufactured Housing REITs: With a red-hot housing market causing a supply and affordability problem, manufactured housing presents a solution and an investing opportunity.
- Why the Dividend Aristocrats ETF is Not the Best Dividend Growth Investment: The set-it-and-forget-it approach to investing may be easy, but you may be leaving massive amounts of capital appreciation on the table.
- Why Diversifying Your Portfolio Isn’t as Essential as You Think: You’ve undoubtedly heard about the value of diversifying your portfolio, but there’s a case to be made for more concentrated investing.
- 3 Leveraged Long Funds Worth Buying: You may think we’re opposed to ETF investing, given our emphasis on stock picking, but the right leveraged fund at the right time can generate healthy returns.
- 9 Reasons Why You Should Still Buy Tesla Stock: Legacy automakers have all outlined their plans to take on Tesla’s EV dominance, here are 9 reasons I still believe Tesla is a long-term buy.
- The Biggest Thing that Revives Beaten-Down Bargain Stocks: There’s one important feature that distinguishes cheap shares from undervalued shares, and finding it is the difference between buying a stock with turnaround potential and one that’ll just drift lower.
- 3 European Stocks to Buck U.S. Markets’ Malaise: Most investors tend to emphasize equities listed in their home countries, but investing abroad can be highly profitable.
- These Little-Known REITs are Delivering Big Returns: REITs are typically known for high yields, not rapid price growth, but these three specialty REITs are breaking the mold.
- 5 Efficient Ways to Invest in FinTech: Fintech advocates liken the rise of financial technology to the early internet, whether that turns out to be the case is yet to be seen—but these 5 ETFs offer broad exposure for investors.
This latest issue of the Federation’s Magazine is ready for you to access now, to discover why your credit score is so important… and much more. Read it now!
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