Dear Liz: I recently paid off a significant amount of credit card debt, totaling over $15,000, owed to several credit card companies. I’m curious as to how long it will take for my credit report to reflect this change. I’ll be moving into an apartment in the next month or two, and I don’t want my application to be denied because my previous debt is still listed on my credit report. Currently, I live with my father, who requires 24-hour care due to advanced dementia. However, he will need to move into a nursing home in the near future.
Answer: Credit card companies typically report balances to credit bureaus on a monthly basis. This report is often based on your card’s statement closing date. If you paid off your balance a few days after the statement closing date, you might not see the change reflected on your credit reports and scores until the next billing cycle.
Landlords may view high debt levels in relation to your income as a concern. However, they are more likely to look for red flags such as late payments and collections that indicate a history of not paying bills on time.
When evaluating applicants, many landlords initially use credit scores and then take a closer look at their credit reports. If you maintain good scores and have no negative marks, you should be considered a strong candidate.
Getting a second financial opinion
Dear Liz: My wife and I recently retired, and our investments are being managed by a certified financial planner. However, our nest egg hasn’t seen much growth over the past few years. We believe it’s time to seek another professional advisor to assess our portfolio and ensure that we’re on the right track. Is it normal to seek additional advice, and how should we approach this without offending our current planner?
Answer: It’s perfectly acceptable to consult another advisor, but you should first discuss your concerns with your certified financial planner.
Start by asking your planner about your portfolio’s performance compared to an appropriate benchmark over the past five years. The planner should be able to explain which benchmark was chosen and why. Keep in mind that a bond-heavy portfolio will have a different benchmark than one that focuses on stocks.
If your portfolio is lagging behind its benchmark, ask your planner what changes can be made to improve its performance. Switching from actively managed investments to passive ones, like index mutual funds or index exchange-traded funds, may reduce costs and enhance performance, as only a few actively managed investments consistently outperform the market.
If your portfolio is performing well relative to its benchmark, discuss whether you’re willing to take on more risk for potentially higher returns. Many planners recommend that retirees have a significant portion of their portfolios allocated to stocks to counteract inflation.
Your certified financial planner should be open to this discussion and ready to make adjustments if needed. If you find that this isn’t the case, it may be time to seek not just a second opinion, but a new advisor altogether.
Divorced spouse benefits and remarriage
Dear Liz: My girlfriend, who is recently divorced, receives Social Security benefits based on her ex-husband, who is still alive. If we were to get married, would either of us lose part or all of our Social Security benefits? Every time I speak with a Social Security representative, they provide conflicting answers. My girlfriend didn’t work long enough to earn her own benefits and was married for over 30 years and is over 60 years old.
Answer: The answer to this question is straightforward. If the ex-spouse is still alive, your girlfriend’s benefit is considered a divorced spousal benefit , which ends if she remarries.
If the ex-spouse were deceased, your girlfriend would be receiving a type of survivor benefit known as a divorced survivor benefit. Individuals receiving survivor benefits can maintain them after marriage as long as they are 60 or older at the time of marriage.
Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions can be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
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