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5 Bad Money Habits and How They Affect Your Credit Score

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Your credit score may seem like a random, relatively useless number, but it can impact your life in some unexpected ways. Poor credit can make it tough to get an apartment or even a job, and in some cases, bill providers can charge you for having a low credit score.

While you actually have a few different credit scores, the most widely used model is the FICO score. Here are the five factors that determine this score:

Payment History: 35%
Amounts Owed: 30%
Length of Credit History: 15%
New Credit: 10%
Credit Mix: 10%

In general, a healthy score means healthy financial habits. Here’s what happens when your habits aren’t so great.

1. MAKING A LATE PAYMENT

Let’s say you completely forgot to pay your credit card bill on its due date, but you paid it the very next day. Chances are, your score will remain intact. However, if you’re more than 30 days late, there’s a good chance the company will report this activity to the credit agencies (Equifax, TransUnion, and Experian).

“Missing one payment or maxing out a credit card have major and swift impacts on your credit score,” Erin Lowry, founder of Broke Millennial tells, mental_floss. “The FICO score is still a little bit of the Coca-Cola formula of the financial world, but the higher you are the harder you fall. Someone with a 780 credit score will see a more drastic drop than someone with a 680. A high FICO score could see a drop as high as 100 points or more [for missing a payment]."

According to Equifax, even a 30-day late payment can remain on your report for seven years. That’s not to say it will take your score that long to recover, though. You can improve your score by paying those outstanding accounts and staying up to date with future payments.

2. MISSING A PAYMENT ALTOGETHER

Late payments can put a dent in your score, but as FICO points out, you can recover from them by paying them off. However, if you don’t pay at all, your debt will probably get charged off, meaning it’s turned over to a collection agency. This will ding your score a little more, although most of the damage has already been done.

It’s a little more difficult to recover from a charged off account, because it’s not as easy as paying the bill. You may be able to settle the debt (and that should be done cautiously), but the original account will still remain on your report as negative activity. Negative activity typically stays on your report for seven years.

3. MAXING OUT YOUR CREDIT CARD

“Amounts owed,” or credit utilization, makes up 30 percent of your FICO score. In a nutshell, credit utilization is the amount of credit you have available to you versus the amount you actually use. For example, if you have a credit card with a $20,000 limit, and you only use $5,000, your credit utilization is 25 percent of your credit.

If you have a habit of maxing out your credit cards, that could hurt you, because you’re utilizing more credit. In other words, your “amounts owed” is high.

“If it's a significant amount of your total available credit limit, then it could really hurt your credit score,” Lowry says. “Keep the amount of credit you use at 30 percent or less of your total available credit limit—and single digits is ideal.”

The amount your score will drop based on your utilization varies, but here are a few averages, according to a Credit Karma study.

Credit Utilization

Average Credit Score

Low (1-30%)

753-690

Mid-High (31-60%)

671-642

High (61-100%)

630-563

4. CARRYING A LARGE BALANCE

On her blog, Lowry discusses one persistent credit score myth: that you need to keep a running balance on your cards to build credit. “You do not need to carry a balance month-to-month on your card,” she tells mental_floss. “Don't just pay the minimum or leave just a little on the account for next month. Then you're paying interest and it's not helping your score.”

According to Lowry and other experts, lenders do like to see some activity on your accounts, but carrying a large balance can affect your credit utilization, which, again, will work against you. Your best bet is to pay your card off in full every month. Make this a regular habit, and your credit score should rise.

5. DEFAULTING ON A LOAN

If you have trouble paying your mortgage or student loan and decide to ignore your monthly payments, you could end up defaulting. When you default on a student loan, your wages may be garnished. When you default on a home loan, you risk foreclosure. In both cases, your credit score takes a beating.

Like a charged off account, a defaulted student loan will show up as a negative item on your report, and, depending on how high your score was to begin with, it can drop up to nearly 100 points.

Experts say a home foreclosure can knock 200 points off of your score, and declaring bankruptcy can take you down a whopping 250 points. Bankruptcies also stay on your report for ten years, so it will take quite some time to recover. If you have trouble making your monthly payments, it’s important to get in touch with your loan servicer to see if there are options available.

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Man Buys Two Metric Tons of LEGO Bricks; Sorts Them Via Machine Learning
May 21, 2017
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iStock // Ekaterina Minaeva

Jacques Mattheij made a small, but awesome, mistake. He went on eBay one evening and bid on a bunch of bulk LEGO brick auctions, then went to sleep. Upon waking, he discovered that he was the high bidder on many, and was now the proud owner of two tons of LEGO bricks. (This is about 4400 pounds.) He wrote, "[L]esson 1: if you win almost all bids you are bidding too high."

Mattheij had noticed that bulk, unsorted bricks sell for something like €10/kilogram, whereas sets are roughly €40/kg and rare parts go for up to €100/kg. Much of the value of the bricks is in their sorting. If he could reduce the entropy of these bins of unsorted bricks, he could make a tidy profit. While many people do this work by hand, the problem is enormous—just the kind of challenge for a computer. Mattheij writes:

There are 38000+ shapes and there are 100+ possible shades of color (you can roughly tell how old someone is by asking them what lego colors they remember from their youth).

In the following months, Mattheij built a proof-of-concept sorting system using, of course, LEGO. He broke the problem down into a series of sub-problems (including "feeding LEGO reliably from a hopper is surprisingly hard," one of those facts of nature that will stymie even the best system design). After tinkering with the prototype at length, he expanded the system to a surprisingly complex system of conveyer belts (powered by a home treadmill), various pieces of cabinetry, and "copious quantities of crazy glue."

Here's a video showing the current system running at low speed:

The key part of the system was running the bricks past a camera paired with a computer running a neural net-based image classifier. That allows the computer (when sufficiently trained on brick images) to recognize bricks and thus categorize them by color, shape, or other parameters. Remember that as bricks pass by, they can be in any orientation, can be dirty, can even be stuck to other pieces. So having a flexible software system is key to recognizing—in a fraction of a second—what a given brick is, in order to sort it out. When a match is found, a jet of compressed air pops the piece off the conveyer belt and into a waiting bin.

After much experimentation, Mattheij rewrote the software (several times in fact) to accomplish a variety of basic tasks. At its core, the system takes images from a webcam and feeds them to a neural network to do the classification. Of course, the neural net needs to be "trained" by showing it lots of images, and telling it what those images represent. Mattheij's breakthrough was allowing the machine to effectively train itself, with guidance: Running pieces through allows the system to take its own photos, make a guess, and build on that guess. As long as Mattheij corrects the incorrect guesses, he ends up with a decent (and self-reinforcing) corpus of training data. As the machine continues running, it can rack up more training, allowing it to recognize a broad variety of pieces on the fly.

Here's another video, focusing on how the pieces move on conveyer belts (running at slow speed so puny humans can follow). You can also see the air jets in action:

In an email interview, Mattheij told Mental Floss that the system currently sorts LEGO bricks into more than 50 categories. It can also be run in a color-sorting mode to bin the parts across 12 color groups. (Thus at present you'd likely do a two-pass sort on the bricks: once for shape, then a separate pass for color.) He continues to refine the system, with a focus on making its recognition abilities faster. At some point down the line, he plans to make the software portion open source. You're on your own as far as building conveyer belts, bins, and so forth.

Check out Mattheij's writeup in two parts for more information. It starts with an overview of the story, followed up with a deep dive on the software. He's also tweeting about the project (among other things). And if you look around a bit, you'll find bulk LEGO brick auctions online—it's definitely a thing!

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What Happened to Jamie and Aurelia From Love Actually?
May 26, 2017
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Nick Briggs/Comic Relief

Fans of the romantic-comedy Love Actually recently got a bonus reunion in the form of Red Nose Day Actually, a short charity special that gave audiences a peek at where their favorite characters ended up almost 15 years later.

One of the most improbable pairings from the original film was between Jamie (Colin Firth) and Aurelia (Lúcia Moniz), who fell in love despite almost no shared vocabulary. Jamie is English, and Aurelia is Portuguese, and they know just enough of each other’s native tongues for Jamie to propose and Aurelia to accept.

A decade and a half on, they have both improved their knowledge of each other’s languages—if not perfectly, in Jamie’s case. But apparently, their love is much stronger than his grasp on Portuguese grammar, because they’ve got three bilingual kids and another on the way. (And still enjoy having important romantic moments in the car.)

In 2015, Love Actually script editor Emma Freud revealed via Twitter what happened between Karen and Harry (Emma Thompson and Alan Rickman, who passed away last year). Most of the other couples get happy endings in the short—even if Hugh Grant's character hasn't gotten any better at dancing.

[h/t TV Guide]

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