Basic Financial Planning for Newlyweds




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Your Initial Financial Plan:


Looking For a CPA, Lawyer or Financial Advisor who has worked with lots of other newlyweds and is familiar with the issues that affect you?  

Blood pressure, pulse, good cholesterol, bad cholesterol, and your weight are all risk factors for heart disease monitored by your doctor.  How come your doctor never takes a look at your FICO score as well?

Your FICO score is what lenders use to determine your creditworthiness.  Potential employers and landlords may also get a hold of your FICO score before deciding to offer you a job or an apartment.  Like your SAT score, the higher your FICO, the more attractive you'll be. 

How Is Your FICO Score Calculated?

According to our friends at , the FICO score for most people is calculated on the weighted average of these five attributes:

  • Payment History - weight 35%:  Factors in your payment history on various types of accounts (mortgages, installment loans, credit cards, and retail accounts), as well as past due amounts, and adverse public records.

  • Amounts Owed - weight 30%:  Factors in the number of your outstanding accounts, the total amount owed on those accounts, and the amounts currently outstanding as compared with either your total available credit or, for installment loans, the initial balance.

  • Length of Credit History - weight 15%:  Factors in how long your accounts have been open, and how long since there has been any activity within those accounts.

  • New Credit - weight 10%:  Factors in new accounts that have been opened, as well as the frequency of recent credit inquiries.  

  • Types of Credit Used - weight 10%: Factors in the number of mortgages, installment loans, credit cards, and retail accounts you have.

Steps To Improve Your FICO

Since your FICO impacts so many aspects of your financial life, what steps can you take to improve your FICO score?

Start by taking a look at your credit report on a regular basis, since the information on your credit report is used to generate your FICO score.  You're now allowed to get three free credit reports per year - one from each of the credit reporting agencies - at  

Here are some other suggestions from :

  • Stay current with your bills.  If you've fallen behind, get up to date as soon as possible.  Don't forget that your payment history accounts for more than one-third of your FICO score.

  • Avoid maxing out your credit cards, since owing a high percentage of your available credit reduces your FICO score.

  • Be careful opening new credit cards, since too much available credit impacts your FICO score. 

  • When comparing available installment loan opportunities, keep in mind that multiple inquiries in a short period of time are generally grouped together as one inquiry when calculating your FICO.

Manage Your Debt

In today's world, very few people have the savings or the disposable income to be able to "pay as you go". Credit cards, mortgage debt, and installment loans are essential to most young professionals. 

Take the necessary steps now to keep your FICO score healthy.  By doing so, you'll be rewarded with easier access to less expensive credit.




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