Common Credit Score Mistakes

Here at Credit Absolute we’ve helped our fair share of clients who have just been dealt a bad hand and everything went bad at once, destroying their credit score.

One of the more extreme case was with one of our clients who had been laid off during the recent recession. This caused him get behind on car and mortgage payments for several months before finally going into foreclosure, having his car repossessed, and maxed out credit cards.  This left him drowning in debt and when he finally found new employment, the previous lenders began garnishing his wages, making it nearly impossible to pay his current bills, let alone pay off old debt. He was then forced to file bankruptcy and is now working to rebuild his credit after years of bad luck ruined his credit.

There are definitely situations like this that may be out of your control and your bad credit score may just be the result of bad luck, but in most cases it has more to do with poor credit habits and common credit mistakes. While derogatory marks on your credit report do eventually fall off, it does take awhile. So it’s important to make sure you avoid these common mistakes.

Common Credit Score Mistakes That Can Kill Your Credit Score

While some unforeseen circumstances may be unavoidable, there are quite a few different things that can negatively affect your credit score and should be avoided whenever possible. Here are a few common mistakes that people with low credit scores tend to make:

  • You Close Old Credit Card Accounts

A large part of your credit score is determined by your credit history and by keeping your old credit cards can help improve your credit score. You will still need to occasionally use those cards to keep them “active” but you definitely don’t want to close out old cards.

  • You Take Too Long To Shop For The Best Rate

This is a very common mistake among new home and car buyers who have been advised to shop around for the best rates. While it is definitely recommended to search around for the best rates when buying a car or home, you want to avoid having your credit checked numerous times by shopping too long for a good rate. One tip to help avoid this mistake is by working with a mortgage broker; they can run your credit once but will still have access to numerous mortgage companies in order to find you the best rate without having to re-run your credit for every lender.

  • You Don’t Use Credit, Even Though You Have Access To It

Sadly, this happens far too often and, while it may not hurt your credit, it is a lost opportunity that could be helping you maintain a good credit score. If you have credit cards that you’ve perhaps had for years and no longer use, you’re missing out on a great opportunity to improve your credit. Credit that isn’t being used won’t help your credit score so make sure that you’re using your credit card at least a few times a year to ensure it stays “active” and continues to benefit your score.

  • You Max Out Your Credit Cards

While this mistake isn’t always done intentionally – many people max out their credit cards because of unexpected financial burdens – many people are unaware that they are severely hurting their credit score by maxing out a credit card. Try to avoid using more than 50% of your available credit (preferably less than 30%) to maintain a good debt to credit ratio which will help increase your credit score.

  • You Became A Co-Signer

This can be a sensitive matter of conversation because co-signing often involves two people who are very close and trust each other enough to risk their credit on behalf of the other. Unfortunately, many people haphazardly co-sign without a second thought and without considering the implications of the matter. Before co-signing, make sure that the person you’re co-signing for isn’t a likely risk of delinquency. If they stop paying, you start paying with bad credit – you could also be held accountable for the remainder of the debt as well.

  • You Don’t Worry About “Just One” Missed Payment

According to FICO, “Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO Scores.”

Far too often people will neglect to pay their bills on time simply because they forget to, are too busy, or simply don’t think it’s a big deal if they’re just a few days late. Unfortunately this can severely impact your credit score, lowering it substantially. Avoid late payments whenever possible and set reminders if you have the tendency to forget.

Rebuild Your Credit

Whether you’ve been the subject of Murphy’s Law and been rained on with horribly bad luck, resulting in a low credit score, or you’ve just inadvertently made some poor choices that have caused your score to drop, Credit Absolute can help rebuild your credit score quickly and affordably. Don’t continue to be dragged down by poor credit and high interest rates, contact us today for a free consultation!

Source: creditabsolute.com

Investing in Food Stocks

You may not know what the future holds, but you know there’ll be a meal involved. A good meal or grocery trip is not only a necessity for survival, it can also be part of an investment strategy.

While restaurants and grocery stores may come to mind, the world of food stocks is larger than one might think, encompassing everything from a grain of wheat to the latest on-demand app.

Food stocks and the industries surrounding them have long been a part of investors’ portfolios. The most recent figures show that Americans dedicate close to 10% of their disposable income on food, a level that’s been consistent for about two decades. Roughly half that is spent for food at home, and the other half is on dining out.

But some types of food stocks can hold more risk than others. Read on to learn the history of food stocks in the market, the types of food stocks, and the overall risk profile of these investments.

Are Food Companies Consumer Staples or Discretionary Stocks?

Looking at the market as a whole, food stocks are part of the “consumer staples” industry, which is considered to be a “defensive” sector in investing. Defensive sectors are those less closely tied to the economy. That means even if the economy is in a recession, consumer staples are seen as less risky and more stable than other industries.

However, no stock is recession-proof. And not all food stocks are actually consumer staples. For instance, restaurant companies typically fall into the consumer discretionary category, which consist of “cyclical stocks,” or those tied to how well the economy is doing. That’s because of how people tend to dine out when they have more income to spend in their pockets.

Recommended: Investing With the Business Cycle

When deciding whether to invest in a food stock, beginner investors might want to research which industry the company falls under: consumer staples or consumer discretionary.

Different Types of Food Stocks

Food stocks include more than just memorable brands. It’s more encompassing than just consumer-facing brands or restaurants. Anything that helps food get to your plate can be considered part of the food supply chain.

Food stocks generally fall under these seven sub-industries:

Farming

Food stock investing can start at the granular level–investing in raw agricultural commodities like soy, rice, wheat, and corn. Farming stocks can also include the ancillary companies that foster that growth–companies that create and distribute insecticide and herbicide or build the industrial-size farm equipment to help harvest goods.

While one might think investing in farming stock would be actual farms, the reality is the opposite. About 98% of farms in the U.S. are family-owned and therefore, not publicly traded. So investing in farming stock primarily means the chemicals and machinery that help harvest the raw product.

Farming stocks can waver based on things like the weather and current events. It can be challenging to predict the next rainy season or drought, sometimes making it hard to track and predict value. In addition, tariffs and trade agreements can influence the performance of these stocks, making them more volatile.

Recommended: Understanding Stock Volatility

Food-Processing Stocks

Companies that work in food processing buy raw ingredients that are combined to make items in the grocery store aisles or on restaurant menus.

Some names and brands in the food processing sector might not be familiar to the casual investor. More often than not, these companies are behind the scenes, operating at a large scale to provide the world oils and sweeteners.

Food processing stocks have their own quirks when it comes to investing. Unlike farming, they’re less influenced by the whims of weather or season, but they still have an associated set of risks. The costs associated with this industry vertical are vast, and price competition across brands can lead to drops or jumps in the market.

Stocks of Food Producers

Further up the supply chain comes food producers, where novice investors are more likely to know these brands and companies from daily life and dietary habits. Food producers take the raw ingredients provided by processors and create the items found on store shelves.

Break this vertical down further to find “diversified” and “specialized” producers.

As the name suggests, diversified food producers are companies that create a ton of different products under the same name umbrella, like Nestlé, which makes everything from baby food to ice cream.

Then there are specialized producers. They make consumer products as well, but these companies often cater to a narrower audience, producing only a few items, often within the same vertical.

In times of recession, luxury or expensive food processing stocks might take a dip. Additionally, consumer trends can influence the market. Take the alternative meat craze–a popular investment trend in recent years. Investors saw larger-than-average returns for the industry due to interest in the trend.

Food-Distribution Stocks

Distribution companies have little to do with consumption or production and focus more on logistics and transport. These companies send products across the country and world.

Distribution companies range from very large, reaching national distribution, to fairly small, where they connect specialty retailers. The distribution market might have its long-term players, but investing in it comes with its own risks.

Grocery-Store Stocks

Grocery stores have become big business in the investment game. The next link in the chain, grocery stores are where the products end up once a distributor drops them off.

Grocery store investments are hardly recession-proof, but the necessity of groceries as a staple for consumers suggests these investments take a lesser hit in a market downturn.

Recommended: Investing During a Recession

Restaurant Stocks

Restaurants are an additional resting place for food distributors. In economic downturns, discretionary restaurant spending is usually the first to go, making this industry within food investing slightly less stable than the others. Additionally, this arena might be most susceptible to trends.

Food-Delivery Service Stocks

The newest addition in food stocks is more about tech than good eats. Online delivery services have burst onto the scene, and with a limited history of performance, are considered to be riskier than the traditional food stocks outlined above.

Right now, delivery service companies are still duking it out across the country, expanding to new cities and slashing the price of services to entice customers.

Pros and Cons of Investing in Food Stocks

With all the ingredients in order, it’s time to highlight a few of the basic pros and cons of investing in food stocks.

Pro: Food stocks, particularly those that are consumer staples, can perform consistently. Food stocks can be a relatively safe, recession-resistant investment (but remember all stocks have inherent risk).
Con: Food stocks perform consistently. For an investor looking for a higher-risk investment, the steady year-over-year earnings might not be as enticing for someone trying to build a high-return portfolio.
Pro: Familiarity with brands. Many food stocks are also commonly found in investors’ pantries and refrigerators. For someone new to investing, buying stocks in the brands they trust and use could be a great way to dip their toes in the market.
Con: Not all food stocks are immune to ups and downs in the economy. Some companies, particularly restaurant groups or those that produce higher-priced products, may be hurt if discretionary spending by consumers pulls back.

The Takeaway

Investing in food companies can actually lead to investing in a wide range of different companies–those that are defensive and more immune to economic shifts, those that are cyclical and rise when the economy is hot.

It can also involve wagering on stocks that have long been a part of the food supply chain, as well as startup unicorn companies that are using innovative mobile technology to deliver meals to consumers.

For individuals who want to try their hand at picking food stocks, SoFi’s Active Investing platform may be a good option. Investors can buy traditional stocks, exchange-traded funds (ETFs), or even fractional shares of some companies. For those who need help, the Automated Investing service builds portfolios for SoFi Members and Certified Financial Planners can answer questions on investing.

Get started with SoFi Invest today.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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Source: sofi.com

Understanding credit card security codes – Lexington Law

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Credit card security codes are an important security measure to prevent fraud and identity theft. They add an additional layer of safety when making purchases and help ensure the buyer is, in fact, the cardholder.

These security codes—often called CVV codes, short for “card verification value”—are three- or four-digit codes located directly on your credit card. They’re typically, but not always, asked for when making card-not-present transactions, such as those made online and over the phone. Here, we detail where to find them, how they work and why they’re important for consumer protection.

Where to Find Your CVV Code

The location of your CVV code depends on the credit card issuer:

  • Visa, Mastercard and Discover: The code will be three numbers on the back of the card to the right of the “authorized signature.”
  • American Express: The code will be four numbers on the front of the card above and to the right of the card number.
Where to locate your card's security code.

How to Find Your CVV Code Without the Card

Credit card security codes were designed to ensure that the person making a purchase actually has the card in their possession. Because of this, it’s impossible to look up your CVV code without having the physical card. This is why it’s important to have the physical card on hand if you need to make a purchase that requires a CVV code.

If an identity thief obtains your credit card number—for example, via shoulder surfing—may try to call the bank and pretend to be you in order to get the CVV code. However, banks typically don’t give out this information. Each financial institution has their own policies, but if you can’t read or access your CVV code, they will usually issue you a new card.

While most retailers require a CVV code when making card-not-present transactions, many don’t. In these instances, crooks would still be able to use your card.

How Are CVV Codes Generated?

According to IBM, CVV codes are generated using an algorithm. The algorithm requires the following information:

  • Primary account number (PAN)
  • Four-digit expiration date
  • Three-digit service code
  • A pair of cryptographically processed keys

Other Names for CVV Codes

Depending on the credit card company and when your card was issued, your security code may go by a different name. Even though there are many different abbreviations, the basic concept remains the same. Below are all the abbreviations and meanings for credit card security codes:

  • CID (Discover and American Express): Card Identification Number
  • CSC (American Express): Card Security Code
  • CVC (Mastercard): Card Verification Code
  • CVC2 (Visa): Card Validation Code 2
  • CVD (Discover): Card Verification Data
  • CVV (All): Card Verification Value
  • CVV2 (Visa): Card Verification Value 2
  • SPC (Uncommon): Signature Panel Code

Credit Card Security Code Precautions

While CVVs offer another layer of security to help protect users, there are still some things to be aware of when making card-not-present transactions.

  • Sign the back of your credit card as soon as you receive it.
  • Keep your CVV number secure. Never give it out unless absolutely necessary—and if you fully trust the person.
  • Review each billing statement to ensure there are no transactions you don’t recognize or didn’t authorize. If there are, contact your financial institution immediately and consider freezing your credit.
Credit card security precautions.

Protecting your identity requires constant vigilance—but emerging technology may have the potential to mitigate some of the risk of credit card fraud.

Shifting CVVs: The Future of Credit Card Safety?

Since chip-enabled cards replaced magnetic stripes, in-person credit card fraud has taken a big dip. Crooks are turning toward online and card-not-present methods of fraud. CVV codes are good at combating this type of fraud—but shifting CVVs, also referred to as dynamic CVVs, may be even better.

The technology works by displaying a temporary CVV code on a small battery-powered screen on the back of the card. The code regularly changes after a set interval of time. This helps thwart fraud because by the time a hacker has illegally obtained a shifting CVV code and tried to make a purchase, it will likely have changed.

Despite the security benefits, shifting CVVs haven’t been widely implemented due to high cost, and it remains to be seen if the technology and process can scale. Financial institutions have many measures in place, such as fraud alert, to notify you of potentially suspicious activity.

If you suspect you’ve been a victim of identity theft, call your credit card company, change your passwords and notify any credit bureaus and law enforcement agencies. By regularly checking your credit card statements, being careful about who you give your information to and being vigilant when making purchases, you’ll help do your part in keeping your identity secure.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

Use Storytelling to Get Ahead at Work

Data, facts, and figures may convince people you have the right answer. But sometimes the real challenge is creating a connection that inspires someone to collaborate with or support you. Telling a great story at the right moment may be exactly the tool you need. Learn how to choose your moment and craft that winning story.

By

Rachel Cooke
May 3, 2021

Airbnb that I’ve always loved. When they first launched their home-renting service in 2008, they struggled to attract customers. In 2013, the co-founders decided what they needed was a story. They wanted to do more than win minds with logic, facts, and figures; they also wanted to win hearts. They needed prospective renters and property owners to feel something that would compel them to engage with the service.

Airbnb wanted to do more than win minds with logic, facts, and figures; they also wanted to win hearts.

The company shifted its focus from highlighting facts—like the practicality of renting rooms or homes instead of hotels—to telling stories about the power of belonging.

“Belong anywhere” became the official tagline of Airbnb and led to the creation of their new logo and brand story. Their focus now was on helping people to feel at home wherever they were. Customers began sharing their own stories of belonging. Suddenly, business was booming.

Telling great stories—investing in winning hearts as well as minds—isn’t just for brands. As this Inc. article claims, storytelling is one of the most critical business skills we all need today:

Stories help us understand the world, find our place in it, and even convince others to buy into our ideas and products. … Your stories make you relatable. They show people why something is important rather than telling them.

The two questions we all need to answer are:

  1. How do you choose the right moment for a story?
  2. How do you craft and deliver that story for impact? 

When do you tell a story?

As this Harvard Business Review piece explains:

The art of persuading by winning hearts is about connecting people emotionally to your idea or position.

Sometimes we do want to lead with rational logic and facts. Need to make a data-driven decision on which marketing campaign delivered the best results? Hard data is your friend. But in other moments when your objective is different, a story—a way to connect with someone’s emotions—may be just the thing.

Here, HBR continues, are some of the moments best suited to heart versus mind-winning:

  • Introducing a new idea and trying to pique interest
  • Gaining support for a decision that’s already been made
  • Raising the bar on performance or commitment
  • Leading a team that is struggling with discord or conflict
  • Aligning with creative colleagues, like those in design or marketing

The common thread pulling through these examples is the need for support, allyship, or buy-in. When you need someone to want to do the thing, that’s when a story comes in handy.

When you need someone to want to do the thing, that’s when a story comes in handy.

So I’d like you to take a look at your calendar. What’s upcoming for you? Do you have a pitch meeting with a client? Are you grabbing virtual coffee with a mentor? Will you need support or collaboration from a colleague in a different department?

Have your facts ready. But find a spot for telling a great story. And then follow these steps to craft one.

How do you tell a story?

1. Be a story collector

Telling great stories begins with having great stories on hand. 

When I’m talking to a new client, I have to prove myself. They want to see my track record of success, and I have the stats and metrics to show it. But I also need them to want to work with me. I’m not a vendor, I’m a partner, and I need to build trust and connection. 

So in early meetings, I lean into my arsenal of stories, mostly about my kids. I keep a collection of those on hand for a few reasons. 

First, kids are relatable. Many of my clients have their own. If not, they have nieces, nephews, cousins, and siblings, which helps my stories resonate.

Second, kid stories let me be authentic. I love my kids, and that shows through in my stories, which makes me seem more real.

Third, kid stories are a safe way for me to be vulnerable; to show moments in which I’ve screwed up and can laugh at myself.

Being able to laugh at myself is one thing, but I don’t want to try to impress a client by talking about a professional failure. That’s being a little too vulnerable. Instead, I’ll highlight a mistake that taught me a valuable lesson that ultimately made me better at what I do.

So now it’s your turn. Where will you start to dig for stories that show a softer side of you? Maybe it’s sports, or travel, or cars. Just pick a lane and start building your collection.

2. Establish a story structure

Once you have your source content, it’s time to start crafting the story.

The stories you tell will help others connect with you and want to be part of your success.

While there’s no one right way to tell a story, this  Forbes piece offers a simple outline of the key elements to focus on:

  • Clear moral or purpose. What’s the reason you’re telling this story, to this audience, at this time?
  • Personal connection. Does the story involve you, or someone you feel connected to?
  • Detailed characters and imagery. Does the story have enough visual description that we can see what you’re seeing?
  • Conflict, vulnerability, or achievement. Can we see what you’re learning or how you’re growing?

Play around with these elements, and then try to craft a narrative that brings them all to life. The stories you tell will help others connect with you and want to be part of your success.

3. Practice your story

A skilled storyteller makes it look incredibly easy and natural. But have you ever been caught in someone’s story during this moment?

“So, it was last Wednesday. No, actually, I think it was Thursday. No, wait! It was Wednesday because I remember it was raining. But hold on—first I have to tell you what happened on Monday or this won’t make sense.”

Listening to disjointed stories like these can be painful. Does it matter whether it was Wednesday or Thursday? Nope. Are we going to be able to make sense of—and, more importantly, connect with—a story where the teller has to repeatedly backtrack to fill in gaps? Probably not.

You want to practice and refine your stories so that you subject your listeners only to the details that matter and that move the narrative forward.

You want to practice and refine your stories so that you subject your listeners only to the details that matter and that move the narrative forward. Scrub the rest.

Tell your stories to people you trust and watch their reactions. Where do they laugh or gasp or nod? Which moments tend to make their eyes glaze over?

As Ira Glass, a master storyteller and host of the This American Life podcast, once famously said:

Good storytelling includes, among other things, having the courage to cut the crap. Not enough gets said about the importance of abandoning crap.

Pay attention and refine your technique as you go.

4. Connect your story to a purpose

A well-crafted and delivered story can be charming. Good stories create connection and inspire support. But all-charm-and-no-purpose will leave your audience confused and frustrated.

So once your story has reached its conclusion, be sure your point is abundantly clear so you don’t leave your audience thinking “So what?”

Your story’s conclusion has to deliver an insight that links to the moment.

When I tell a story about one of my daughters there is always some levity, something the audience can relate to. But ultimately, its conclusion has to deliver an insight that links to the moment. 

I tell one story about the headache-inducing outfits my older daughter used to wear to preschool every day. I describe the cornucopia of neons and zippers and feathers, and I see people visualizing the hilarious horror right along with me.

It always wins a laugh. But then I get to the point: It’s important, in business and in life, to find safe spaces in which to test and experiment and learn by trying. I want clients to know this is part of my mindset, that I encourage experimentation in safe spaces, and facilitate learning as we go. The story, when I make that connection clear, helps position me as a partner who also knows how to laugh.

So now it’s your turn. Go try this out, and when you see that first spark of connection, tell me the story of how it went.