This Week In Your Wallet: Genes Might Affect Your Credit Score
Full disclosure: My husband (to his delight) has a higher credit score than me. His lead isn’t by much, but that doesn’t stop him from reminding me about it. Despite my best efforts to surpass him in what amounts to friendly competition, new research says his better standing might actually come down to genetics.
We know credit scores are (largely) influenced by five things: payment history, length of credit history, account balances, shopping for new credit and the types of credit one has (i.e. having a mix of accounts like mortgages, auto loans and student loans). Now neuroeconomists are saying your genetic makeup might play an important role in the making of your three-digit score too.
Multiple studies have found a link between your DNA — specifically your 5-HTTLPR gene (don’t worry, I’d never heard of it either) — and your financial decisions. More recently, this study found a relationship between the length of that aforementioned gene and your credit score. According to the research, people with two short alleles (pairs of genes) have higher FICO scores — by a notable 93 points — than those with longer alleles. Moreover, people with longer alleles might be hardwired to take more risks and more willing to take on debt — both of which can lead to a lower FICO score.
And in case you missed it…
Credit bureaus agree to major overhaul
Last week the three big credit reporting agencies – Equifax, Experian and TransUnion – agreed on what amounted to the biggest revision to credit reports in more than 10 years. Among the headlines: Bad medical debts will no longer show up on credit reports until after 180 days. This move should go a long way to solving the problem where it’s the insurer, not you, late with the payment. The new agreement also improves the process for handling these errors on credit reports that affect 20 percent of consumers. Trained investigators from the bureaus will oversee the process, which, until now, has largely been handled by computers. This is good news for anyone who’s had to fight (and fight and fight) to get some inaccuracy removed from their credit reports.
Wedding bill blues
Guests aren’t the only ones tearing up as the bride walks down the aisle — bank accounts are, too. Couples spent an average of $31,213 on their wedding days in 2014 (up from $29,858 in 2013), according to new data from The Knot. Keeping with tradition, the bride’s parents covered 43 percent of the costs, with the couple contributing the same amount. As CNNMoney reports, the venue is the biggest expense, averaging over $14,000. Next up is the engagement ring at $5,855, and the band at $3,587. Two areas where couples cut (itty bitty) corners were invitations ($439 from $443) and party favors ($275 from $281). Otherwise, spending increased pretty much across the board. A newer expense? Hiring a social media consultant. It’s not uncommon for couples to hire professional social media help so that photos and content are posted and tagged correctly — often using a customized hashtag for guests to live tweet and post throughout the ceremony. #Toomuch?
Tired of worrying about your ID? Join the club
Fewer U.S. consumers were victimized by identify theft in 2014: 12.7 million people to the tune of $16 billion. This actually represented a 3 percent drop in victims from the previous year, according to new data from Javelin Strategy and Research. But are we actually making progress in the fight against identity theft? According to experts from Javelin and LifeLock, not really. As I explain in my Fortune.com column, you have to remember that this very minor drop happened in a year that following big data breaches at Target, Home Depot and the like, in which millions of consumers had their credit cards swapped out and took the retailers up on their offers of free credit monitoring services. Yes, we’re all tired of thinking about this, but taking care of your data has become another line item on our financial must-do lists. It’s unfortunate, but it’s true. Chip cards aren’t going to solve everything.
Why you need to organize your coupons
Some people don’t bother with the clipping and/or printing of coupons anymore. I get it — extra work and extra paperwork. But if you’re like this writer, who still clips, but routinely forgets to use them, tear a page out of his playbook on how not to waste your savings. For example, you might snort at the people in the store with Ziploc bags, Tupperware containers or large envelopes filled with coupons, but these people have a system in place and they’re saving because of it! For example, my girlfriend keeps an accordion folder of coupons (organized by store) in the front seat of her car. If you want to digitize your system, then create an electronic file of your coupons using one of the many apps (i.e. Track My Coupons, CouponQB and SnipSnap) on the market. With SnipSnap, for example, consumers can save (on average) $40 a week.
Have a great week,
Jean
