Stop Flushing Your Money Down the Drain by David Thyfault

Author:David Thyfault
Language: eng
Format: epub
Tags: investment, personal finance, finance, estate planning, economics, budgeting

Split Accounts

A married couple may find it useful to apply for some separate credit. That way, certain debts don’t count against both of you. Also, each individual is better off if there is a divorce or death.

The 45-Day Rule

Use this dynamic rule to your benefit. If there are multiple inquiries on your report for a similar-looking loan, within a 45-day window, the credit report believes you are rate shopping, not buying multiple items; therefore all of those similar-looking inquiries combined only count as one inquiry against your score. You can apply to several lenders for an auto loan or a new VISA card to see who might give you the best rate. You might even elect to take on two or more MasterCard accounts at the same time. If so, the damage from inquiries will be minimal. Furthermore, your utilization rate (see below) could improve substantially because you have more unused credit. On the down side, the average age of your accounts will drop, which usually lowers scores. However, a year later you would still be better off than the person who gets one such account now and another one after the year passes. Therefore, we are back to the original point: The 45-day rule can be an effective tool.

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