Is ethanol gasoline good for the environment or causing you to fill up more often?

Ethanol is consider a biofuel alternative to gasoline.  It is produced from the fermentation of sugar from foods such as corn, sugar cane, etc. and it also can be produced by the hydration of ethylene from petroleum production too.  Many gas stations advertise ethanol additives in their gasolines and that by purchasing their ethanol gasolines you are helping reduce pollution in the environment, that your car will run better, etc.  Is this true and what are the things you may want to know…

Not all vehicles do well with ethanol based fuel.  Your gas mileage could be reduced and unknowingly you could be filling up more often. People who have reported reduced gas mileage with ethanol based gasoline are some hybrid owners and people with older cars. 

Of course for you to know whether ethanol based gasoline is affecting your gas mileage or not, you will have to test your own vehicle for results.

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What is a fico score/credit score? What things can affect my fico score/credit score?

On various television programs you have probably heard the words “fico” score or credit score mentioned, but what exactly is this? 

Fico stands for the Fair Isacc Corporation.  They were the inventors of a credit scoring system that most of the world uses. 

Your credit score or fico score represents a calculated measure of what type of credit risk you actually are.  Credit scores range from 300 – 900 with the majority of people in the 600 – 800 range. Higher credit scores mean lower interest rates charged on loans.  Lower credit scores mean higher interest rates charged on loans.  For instance, a person with a credit score of 450 will pay  three to five points higher interest rates on loans than a person who has a credit score of 800.

Keeping a good credit score is very important because it can affect your ability to get a mortgage, get a school loan, get a car loan and even your ability to rent suitable accommodations. 

What are the things you may want to know…that affect your credit score for better or worse?

The amount of time you have had credit – Loyalty pays off. Try to establish credit with companies for at least seven years or more. Although other reward programs or incentives can be tempting, jumping around from credit card company to credit card company can lower your fico score/credit score. Of course, age also plays a factor in the total amount of time you have had credit too.  The amount of time you have had credit makes up 15% of your fico score/credit score. 

How often your credit is accessed – Buying a car?  Opening a bank account?  Applying for a credit card?  Renting an apartment? Inquiring about loan?  Getting a mortgage?  All these things require access to your credit report.  Each time someone other than you accesses your credit report it lowers your score.  If you are buying a car, inquiries within 14 days will be grouped together.  If you are buying a house inquiries within 30 days will be grouped together.  How often your credit is being accessed makes up 10% of your fico score/credit score. 

Different types of credit you have – Installment debt like a car loan or a mortgage is looked upon more favorably than revolving debt like credit cards.  The different types of credit you have make up 10% of your fico score/credit score. 

Your bill payment history  – Do you pay your bills in full and on time?  If you are not paying your bills on time and/or making minimal payments on several maxed out credit cards this will lower your credit score.  Do you know that your bill payment history actually makes up the largest portion of your fico score/credit score?  35% 

How much debt you have compared to available credit – Maxed out or high balances on your credit cards?  If you compare the amount of your available credit on your credit card compared to the amount of debt you have on your credit cards; does it work out to over 50%?  If it does, this affects your credit rating for the worse.  Your goal should be not to borrow more than 50% of your available credit balance from any single lender. (mortgages and car loans excluded) Do you know will have a better credit score if you owe smaller amounts on several credit cards rather than maxing out one credit card to its limit?  How much debt you have compared to available credit makes up 30% of your fico score/credit score.

Here is an example of what a credit report looks like.

If you live in Canada, here are links to Canadian credit bureaus:

Transunion

Equifax

Experian


If you live in the U.S. here are links to U.S. credit bureaus: 

Equifax

Transunion

Experian


What are banks not telling you? Why should you deal with more than one bank?

The all mighty dollar and the bank account.  Almost everyone has one, but what are the things you may want to know…about banks in general?

Best rate – The bank will show you their products only. The competition may offer a better interest rate, a better mortgage rate or higher yielding investments. It pays to comparison shop.

High Interest Savings Accounts/ Very low mortgage rates – Sound too good to be true? Beware of teaser rates. These rates may only be valid for a few months. Then you can end up paying a higher interest rate on a mortgage and/or earning less interest on your bank account over the longer term. 

Commissions – The bank is there to sell you their products. It is always a good time to invest no matter what the stock market is doing.  Ever wonder why they keep suggesting to purchase their new mutual fund, certain types of investments, etc.  Higher commissions bottom line. What! You didn’t know your financial advisor gets a commission?  It’s not like they want to reveal that information to you, because you may think they are not looking after your best interests if you know they are making commissions off of your investments.

Banking fees – Only seem to keep increasing.  Mistakes are common. Complain, point out mistakes, say the fees are unreasonable, many times they will reverse the fees to keep your business.

Fine Print – Banks never explain the fine print in detail.  Make sure you know what you are signing and the liabilities, fees, etc. associated with it.  Leave your pride at the doorstep, ask questions, don’t assume anything.

Online Accounts – These accounts may not be suitable for everyone, as some online transactions may take longer to process, like an out of town cheque, etc.  Plus, they not as secure as the bank makes them out to be. Usually, banks will offer you higher interest rate if you open one of these online accounts.  Read the fine print, ask about transaction clearing times, find out if the account is right for you.

Mistakes – Banks are not immune from making any kind of mistakes, not depositing your pay cheque in the right account, withdrawing the wrong automatic payment amount, etc. Someone else may have the same bank account number as you with a different transit number (different city).  If the person moves to your area, vacations/visits your area, mistakes can be made in your bank account.  Check your accounts over on a regular basis.

Credit cards – Once again the banks will only offer you their products. The competition may offer better reward programs, interest rates, etc.

ATM’s – Ever wonder why you are starting to see so many generic ATM’s now?  It’s all about the money making opportunity in the fees. Also, if you need to withdraw cash while you are on vacation, not all banks are created equal when it comes to foreign transaction fees.

Identity Theft – Banks don’t advertise their problems with identity theft. Use only one bank?  Probably not a good idea in this age of identity theft.  Because an identity thief ruins your credit rating, you will not be able to go out and open up an account at a totally different bank to resolve an identity theft problem. 

Remember…

To shop around.  Just because you have been dealing with the same bank since you were 12, it doesn’t mean the bank is offering you the best interest rates, best banking fees or the best of anything.  

Try not to be fooled by fancy advertising. Sometimes this is more about increasing the banks business in general and good PR. Offers might not be as rosy as they appear. 

Deal with more than one bank to protect yourself in the event of possible identity theft. 

Always read the fine print, don’t assume anything.  Ask questions, forget about how dumb you think your questions may be. Better to understand the liabilities/risks rather than having to deal with unexpected financial surprises in the future.

Check your accounts over for possible errors on a regular basis.