Money, Health, and Other Things

Educational Blog in the Area of Family and Consumer Sciences for the Middle Peninsula


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Four Common Credit Score Myths, Part II

This week, well wrap up the four common myths regarding credit scores.

 

Myth #3: In order to build credit, you need to carry a balance on your credit card

There is no evidence that this is true, so if you’re carrying a balance just to improve your credit score, you’re likely wasting money by paying interest for no reason. Part of the reason for this misconception may be a misunderstanding regarding credit utilization ratios. While its true that those with 0% credit utilization have a lower credit score on average that those with small credit utilization ratios, not carrying a balance does not mean you have a 0% credit utilization ratio.

Which brings us to myth #4: paying off your credit card in full each month will result in a 0% credit utilization ratio. Credit card companies will generally provide information to the credit bureaus once a month. However, this is rarely done right after you’ve paid your credit card bill; in fact, more often than not, this information is sent to the credit bureaus at the end of your billing cycle. Which means, your credit utilization is usually calculated using your balance at the end of the billing cycle, when you receive your statement. So even if you’re paying your credit card in full each month, if you’re using a large percentage of your credit card balance, you could still be damaging your credit score. Going back to myth #3, the primary reasons people with 0% credit utilization tend to have lower scores – in order to have a 0% credit utilization that consumer is likely not using their card at all, meaning they’re not creating payment history, which is the largest factor that determines your credit score.


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Four Common Credit Score Myths, Part I

Over the next two weeks, we’ll discuss four common myths regarding your credit score. For more information, check out our previous posts on credit reports and credit scores!

 

Myth #1: Don’t check your credit report too often or it will hurt your credit score

While it’s true that when someone checks your credit, it’s recorded as an inquiry on your credit report, and some of those inquiries can negatively affect your credit score, checking your own credit report isn’t one of those inquiries. Pulling your own credit report is considered a soft inquiry and has no effect on your credit score. Furthermore, creditors generally won’t be able to see your soft inquiries, so not only will checking your own credit not hurt your credit score, it’s unlikely creditors will have any idea how often you have or have not pulled your credit report.

 

Myth #2: You shouldn’t close unused credit cards because the loss of credit history will immediately hurt your credit score

This one is a little more complicated because there are a few true pieces to it. It is true that closing your unused credit cards will result in a loss of credit history…eventually. Assuming the credit card was in good standing, accounts in good standing with no history of missed or late payments will remain on your credit report for at least 10 years from the account closing. That said, closing an unused credit card can have an immediate effect on your credit score. If you have multiple credit cards, closing one credit card will likely impact your credit utilization ratio, which is the 2nd largest factor that determines your credit score. For instance, if you have two $1000-limit credit cards, and credit card A has a balance of $500 and credit card B has a balance of $0, your credit utilization ratio is currently 25%. If you close credit card B, your credit utilization ratio would jump to 50%, negatively impacting your credit score.

 


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Ten Tips for Managing your Private Well Water Supply – Part II

This week, we’ll wrap up the ten tips for managing your private well water supply. Check out our post last week for the first five!

 

  1. All water tests should be done by a certified lab. After you receive your results, compare them to the standards set for public systems by the EPA, which generally serves as good guidelines for private systems, and feel free to contact us if you have any questions!

 

  1. Inspect your well annually for any cracks, holes, or corrosion, and ensure your well cap is secure. Every three years, or if you suspect a problem sooner, have your well inspected by a licensed well drilling contractor with a Water Well and Pump classification. For a list of contactors who provide well inspections, check out Virginia Household Water Quality Program’s Wellcheck initiative linked below!

 

  1. Keep careful records of your well installation, maintenance, inspection, and all water tests.

 

  1. If a well on your property is no longer in use, have it properly abandoned by a licensed well contractor. Wells that are left unsealed or improperly abandoned can serve as a direct pathway for surface water to enter the groundwater supply, causing contamination. Remember, ground water is a shared resource!

 

  1. If you have a spring instead of a well, make sure the spring box is sealed to prevent contamination. Springs are very susceptible to contamination, so be sure to test your spring every year for coliform bacteria! Continuous treatment for bacteria is often required to ensure spring water is safe to drink.


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Ten Tips for Managing your Private Well Water Supply – Part I

Over the next two weeks, we’ll give you ten tips for managing your private well water supply. This comes from a publication by Virginia Cooperative Extension’s Virginia Household Water Quality Program – for more information check out the link below!

 

  1. Make sure your well is properly constructed. Well casing should be 12” above the ground, with a sanitary, sealed well cap or secure concrete cover to prevent contamination from insects and surface water. Sanitary well caps for drilled wells often involve a two-piece cap with a rubber gasket, with vertical screws to hold the two pieces together and create a watertight seal. If you are unsure of your well construction, please check out Virginia Household Water Quality Program’s Wellcheck initiative linked below!

 

  1. Be sure the ground slopes away from your well to prevent surface water from pooling around the casing, which can cause contamination and damage your system.

 

  1. Ensure your well is at least 100 feet away from potential contamination sources, such as chemical storage, oil tanks, and septic tanks. If you have a septic tank, have it pumped regularly.

 

  1. Keep the area around your well clean and accessible. Make sure the area is free of debris, paint, motor oil, pesticides and fertilizers. Do not dump waste near your well or near sinkholes, as this may contaminate your water supply.

 

  1. Have your water tested once a year for total coliform bacteria, which will give an indication whether there is a likelihood of more dangerous bacteria present, like E. coli, that could potentially cause illness. If your total coliform and E. coli tests are done separately, consider doing the E. coli test if you have a positive total coliform test. Also, every three years, test for pH, total dissolved solids (TDS), nitrate, and other contaminants of local concern.