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Timely updates to supercharge your wealth-building journey!
TABLE OF CONTENTS
Shh…Secret to boosting your credit score
Your credit score is a crucial number that lenders use to determine your creditworthiness. It is extra important when you are applying for loans from any financial institution, be it a personal loan, mortgage loan, or car loan – banks will give lower loan amount with higher interest rate if they see you as untrustworthy.
But Rome was not built in a day! It takes time to build a solid credit score, and here are some super strategies you can do-
1. Pay your bills on time ⏰
Yes, it sounds obvious, but I’m serious. Timely payments contribute to 45% of your credit score! So pay your bill on time, banks love reliable and trustworthy people!
If you accidentally forget to make a payment but have an otherwise solid history, contact your lender and request to have your mistake removed from your record.
2. Keep your credit utilization low
This is the ratio of your outstanding credit card balances to your credit card limits. A general rule of thumb is to keep it below 30%. So, if your credit limit is RM10,000, try to maintain a balance below RM3,000. Your credit score will thank you!
3. Diversify your credit
A mix of credit types (credit cards, car loans, housing loans) can actually make you look more reliable to lenders as it is a sign that you can manage your debt effectively.
4. Avoid applying too many credit cards at the same time
A credit card with good repayment history will boost your credit score, but remember to do it right! Applying many at the same time is not helpful – you potentially create an impression that you are borrowing more than you should be.
5. Keep old credit card accounts open 💳
Older accounts show a longer history of credit management. They’re like your superhero origin story. Don’t erase it! If your older card has a more generous credit limit, it can help to lower your utilization ratio.
Do you know your credit score? 🤔
To find out your personal credit report, you can check it via Credit Reporting Agencies such as CTOS.
Remember, improving your credit score isn’t a race; it’s a marathon. Be patient, consistent, and stay on the path of financial righteousness. If you would like to know which credit card works the best for you, check out my video here (not promoting any credit card, just genuine personal thought)!
Word of the Week: Net Asset Value (NAV)
Definition: Net Asset Value (NAV) represents a fund’s per share market value. This is the price at which investors buy (“bid price”) fund shares from a fund company and sell them (“redemption price”) to a fund company. It’s calculated by subtracting the fund’s liabilities from the total market value of all its shares and then dividing by the number of shares.
Imagine you’ve invested in a mutual fund. This mutual fund owns 100 shares of different companies, and the total market value of these shares is $1,000. The fund has liabilities (debts or obligations) amounting to $200.
First, you subtract the liabilities from the total market value: $1,000 – $200 = $800. This is the fund’s net assets.
Suppose the fund has issued 50 shares to investors like yourself. To find the NAV, you divide the net assets by the number of shares: $800 / 50 = $16.
So, the NAV of each share in this mutual fund is $16. This is the price you’ll pay to buy a share, or the amount you’ll receive if you decide to sell your share back to the fund. And that’s how NAV works!
Key Economic Dates:
- 23rd August: US Services PMI (Aug)
What I’ve been reading:
Here are the top stories that caught my eye:
- Fitch warns it may downgrade US banks
- Fed worries more rate hikes could be necessary
- Country Garden faces a risk of default in the coming weeks
You’re all caught up!
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Cheers,
Ziet
