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The Week in Review
• All three major indexes experienced wild swings throughout the week. Uncertainty continues to plague investors, as the global economy faces major headwinds including inflation, the war in Ukraine, and COVID-19 lockdowns in China. Market veterans say it’s rare to have three major economic catalysts converge in this fashion.
• The producer price index jumped 11% from this time last year, confirming that inflation is still running rampant. Fund managers largely agree that the central bank needs to help rein in inflation, but some are worried that an ultra aggressive stance could create a hard landing.
• April’s CPI showed inflation remains near a 40-year high, as prices broadly increased by 8.3% year-over-year. Wall Street had been expecting an 8.1% increase. Core CPI, which strips out food and energy prices, rose 6.2% year-over-year, marking a monthly increase of 0.6%. Economists have varying opinions as to whether or not inflation may be peaking.
For more economic news and how it affects your money, visit the SoFi app.
Credit History Length And Your Credit Score: What You Need to Know
You’re not born with a credit history; it has to be built over time.
Once good credit has been established, using it wisely and responsibly can offer flexibility and freedom. Lenders like to see that you’re an experienced, responsible credit user, which is why your length of credit history accounts for 15% of your credit score.
Lenders want to see accounts maintained in good standing for a long time. When debt accounts are closed, though, that history ends, and eventually closed accounts drop off the credit report entirely. A credit history looks better when it has a solid number of accounts in good standing that have been open for a long time.
One way to achieve this is to keep old credit cards open, even those not being used much anymore. Keeping these cards open, perhaps using them to automate a few bills like car insurance or a monthly subscription account, will signal that they are still very much in use. Paying them off on time and in full is still important to the health of a person’s credit. It might be wise to consider closing a card not being used regularly if the annual fees are so high that it isn’t worth it to keep the card open.
Track your credit score for free in the SoFi app, where the factors affecting your score are broken out to make them easier to understand.
This Week’s Top Stories
Peloton (PTON) has lost nearly 90% of its value from its 2021 high. New CEO Barry McCarthy has ambitious turn-around plans that include offering a 15-20% stake in the company.
McCarthy, who hails from Netflix and Spotify, plans to swap the company’s focus from equipment to subscriptions. The sought-after capital infusion is meant to complement cost cuts as the company slashes headcount and other expenses.
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Nintendo (NTDOY) announced a 10-for-1 stock split that will make its shares affordable to a wider range of investors. It expects the declines in sales for its Switch video game unit to continue as supply chain snarls create a shortage of key parts.
The video game company has seen Switch revenues shrink by 20% over the past fiscal year and predicts a further 9% decline for the forward-looking annual period. It hopes to boost its user base from the current 100 million players with its introduction of Nintendo Switch Sports.
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SoFi’s Head of Investment Strategy’s key takeaway from April’s CPI reading was that even if inflation cools, it’s going to be sticky and uncomfortably high without a deeper pullback in demand.
As investors, waiting for relief is really difficult — especially in an environment like this when it feels like we are persistently burning. But Liz is optimistic that the next two months can prove to be the last of the really hard part, and we can start to level out.
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Deep Dives from SoFi Learn
A 401(k) can be a valuable part of a retirement savings plan. But how much should you have saved in your 401k at different ages, or even stages of your career?
Charting the average 401k balance by age can help put your own savings in perspective. Seeing what others are saving in their 20s, 30s, 40s, and beyond can be a useful way to gauge whether you’re on track with your own retirement plans, and what else you can do to maximize this important, tax-deferred form of savings.
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The market for home improvements has exploded since the pandemic. Here’s what to consider to avoid home improvement scams.
Knowing the signs of home improvement fraud may keep you from becoming the next victim of a home repair scam.
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What’s your number? That’s not a pickup line; it’s what a lender will want to know when reviewing a mortgage application.
What credit score is needed to buy a house? The numbers hinge on the economic climate, lender, and type of loan. We'll cover the minimum credit score for home mortgage loans and how you can improve your credit score if needed.
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