Finance, Money

7 Tips To Increase Your Credit Score By 200 Points

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Increase Credit Score

Your credit score plays a key role in your financial life, impacting your ability to obtain loans, secure favorable interest rates, and even rent an apartment. If your credit score is currently below par, it’s essential to take proactive steps to improve it.

While rebuilding your credit may seem daunting, it’s entirely possible to increase your credit score significantly over time. In this article, we will outline a series of practical steps you can take to boost your credit score by a remarkable 200 points. Let’s dive in!

Review Your Credit Reports

To begin your credit score improvement journey, you should obtain copies of your credit reports from the major credit bureaus—Equifax, Experian, and TransUnion. Carefully review each report for inaccuracies, such as erroneous late payments or accounts that don’t belong to you.

Dispute any errors you find, as they may be dragging down your score. Regularly monitoring your credit reports can help you identify areas that need improvement and track your progress as you implement changes.

Pay Your Bills on Time

Consistently paying your bills on time is one of the most significant factors in improving your credit score. Payment history constitutes a significant portion of your overall score.

Ensure that all your bills, including credit cards, loans, and utilities, are paid by their due dates. Late payments can have a detrimental impact on your creditworthiness. Consider setting up automatic payments or reminders to help you stay on track.

Reduce Credit Card Balances

High credit card balances can negatively affect your credit utilization ratio, which compares your outstanding balances to your total available credit. Aim to keep your credit card balances below 30% of your credit limits.

If possible, pay down your balances aggressively to lower your utilization ratio and demonstrate responsible credit management. It’s generally better to distribute your balances across multiple cards rather than maxing out a single card.

Avoid New Credit Applications

Every time you apply for new credit, such as a credit card or loan, a hard inquiry is generated on your credit report. These inquiries can lower your credit score, especially if there are multiple inquiries within a short period. Limit making new credit applications unless it is absolutely necessary.

Instead, focus on managing and improving your existing credit accounts. Over time, responsible credit usage and on-time payments will have a positive impact on your credit score, which can help anyone during times of high inflation.

Diversify Your Credit Mix

Credit bureaus consider the variety of credit accounts you hold when calculating your credit score. Having a healthy mix of credit types, such as credit cards, mortgages, auto loans, or personal loans, can positively impact your score. If you lack diversity in your credit portfolio, consider responsible utilization of different types of credit to demonstrate your ability to handle various financial obligations.

Become an Authorized User

If you have a trusted family member or friend with good credit, ask if they can add you as an authorized user on one of their credit cards. As an authorized user, the positive payment history and credit utilization of the primary cardholder can be reflected on your credit report. This strategy can be helpful, particularly if you have a limited credit history or previous credit issues.

Bonus Tip: Monitor Your Credit Utilization Ratio

In addition to the steps outlined above, keeping a close eye on your credit utilization ratio can further boost your credit score. This ratio compares your total credit card balances to your overall credit limit. Aim to keep your utilization below 30% to demonstrate responsible credit management. Regularly monitoring your balances and paying them down can help improve this ratio which can be a bright spot during a recession.

Additionally, consider requesting credit limit increases on your existing credit cards, as this can effectively lower your utilization ratio. By actively managing your credit utilization, you can make significant strides in improving your credit score.

The Bottom Line

Increasing your credit score by 200 points requires discipline, time, and responsible financial habits. By following these steps—reviewing your credit reports, paying bills on time, reducing credit card balances, limiting new credit applications, diversifying your credit mix, and becoming an authorized user—you can significantly improve your creditworthiness and open doors to better financial opportunities. Start today and watch your credit score soar!

Finance, Money

7 Tips To Streamline Your Personal Finances

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Streamline Your Personal Finances

Are you tired of feeling overwhelmed and stressed out by your personal finances? You’re not alone. According to the American Psychological Association, money-related stress is a major source of anxiety for 72% of Americans. And financial stress is something that can affect all areas of your life – mental and physical health, relationships, and even job performance.

With such a widespread impact, it’s no wonder that more and more people are looking for ways to streamline their personal finances and alleviate some of the stress associated with money management. Thankfully, there are plenty of simple yet effective tips you can follow to take control of your money. Let’s take a closer look at them.

Minimize the Use of Cash

While not using cash entirely may not be feasible for everyone, it can be a useful strategy for some people to streamline their personal finances. Even though cash transactions are the most frequently used payment method in the country, they can be cumbersome and less secure than digital payments, as they require you to physically carry and exchange money. In addition, cash transactions can be more difficult to track, which can make it harder to keep track of expenses and create a budget.

By using credit or debit cards, online bill pay, and mobile payment apps, you can simplify your finances and have more control over your spending. Digital payments can also help protect against fraud and theft, as they offer stronger security measures than cash.

Utilize Financial Apps and Tools

A recent survey by Mastercard revealed that nine out of ten of their users across America and Canada use financial apps to manage their finances. Apps like Mint, Personal Capital, and You Need a Budget (YNAB) can help you track your expenses, monitor your investments, and create a budget. In addition to mobile apps, there are also various online financial tools available, such as budget calculators, retirement planning tools, and debt repayment calculators. Consider using these tools to gain a better understanding of your finances and make more informed decisions about your money.

Maximize Your Savings

One of the easiest ways to build a strong financial cushion and prepare for future expenses is to maximize your savings. You can do this by setting up automatic transfers to a high-yield savings account, so money automatically goes into it without you even thinking about it. You can also reduce unnecessary expenses, such as eating out or shopping for non-essential items, to free up more money for savings which is vital during a recession.

Another strategy is to take advantage of employer-sponsored retirement plans or individual retirement accounts (IRAs) to save for retirement. By saving as much as possible, you can achieve your financial goals more quickly and with less stress.

Consolidate Your Debts

Consolidating your debts means combining multiple debts into one payment, typically with a lower interest rate or more favorable repayment terms. This simplifies your finances and can save you money in interest charges. Some common ways to do this include balance transfers, personal loans, and home equity loans.

Balance transfers involve transferring credit card balances to a card with a lower interest rate, while personal loans offer lower interest rates than credit cards. Home equity loans allow you to borrow against your homes’ equity. Consolidating your debts can help you pay off your debts faster and more efficiently, allowing you to get your finances back on track which is even more important in these high inflationary times.

Review Your Insurance Policies

Taking another look at your insurance policies may help your finances by ensuring that you have adequate coverage at the most affordable rates. You can compare policies and premiums from different insurance providers to find the best deals.

You can also adjust your coverage amounts or deductibles to meet your current needs and budget. Doing this regularly can also help you identify any gaps in coverage or outdated policies. This is critical so you don’t end up paying more than you need to for insurance and are fully protected in case of an emergency or unexpected event.

Monitor Your Credit Score

Finally, you can simplify your finances by keeping an eye on your credit score to stay informed of your creditworthiness. This can also help you identify any potential errors or fraudulent activity on your cards. You can access your credit report for free once a year from each of the three major credit bureaus (Equifax, Experian, and TransUnion), or sign up for credit monitoring services to receive alerts of any changes to your score.

A higher credit score can lead to better interest rates and loan terms, potentially saving you money in the long run. Staying on top of your credit score can also help you take steps to improve it over time and ensure your financial health.

Automate Your Bill Payments

The simplest step you can take right away is setting up automatic payments for all your recurring bills, such as rent, utilities, insurance premiums, and other monthly bills. The payment amount will be automatically deducted from your bank account or credit card on the due date. This will not only ensure that your bills are paid on time without you having to lift a finger, but it will also reduce the risk of missing a payment or incurring interest charges.

Finance, Lifestyle

Tips To Boost Your Credit Score Fast

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
credit score

A good credit score is one of the most important weapons in your financial arsenal. It tells loan officers that you are a responsible borrower who can afford to pay off personal debt. The higher your credit score, the better your chances that you will receive favorable loan terms when you apply for personal credit, such as a mortgage or a new car loan. 

Whether you want to buy a house or just need some improvement in your current credit standing, boosting your credit score can be valuable in times of high inflation and high energy costs. To help, we have compiled this list of quick tips for improving your credit score.

Make Timely Payments on All Debts

The first step to building a solid credit score is ensuring you make all your payments on time. If you have multiple credit accounts, making due dates a priority is vital. Adding these due dates to your schedule can help you stay on top of payments and avoid late fees. 

All late payments are counted against you on your credit report, and missing even a single payment can cause severe damage to your credit scores. You should also apply for new lines of credit only when you are ready to use them responsibly—opening accounts without a plan is risky and could hurt your credit score if you’re not careful.

Besides, the best way to maintain a good debt-to-credit ratio is by paying more than the minimum due each month. This not only gets rid of your debt faster, it will also help you avoid late payments and other costly penalties.

Limit New Credit Applications and Keep Old Credit Accounts Open

Banks perform hard inquiries into your credit report when you apply for new credit (i.e., a credit card, a car loan, or a mortgage), and the inquiry can temporarily lower your score. 

This is because the inquiries indicate to lenders that you’re looking to take on more debt, making them leery of lending to you—even if you’re an excellent credit risk. The best way to avoid these inquiries is by keeping old accounts open—the longer you have an account, the more it will positively affect your score.

At the same time, you want to limit new credit applications as much as possible because each one results in another inquiry. Since most people are responsible with their finances and don’t tend to ask for new loans too often, there’s no need to open up too many cards at once. 

If you need a new line of credit, close an old account before applying for the new one so that you have fewer accounts on record. In addition to limiting inquiries when it comes time for a new loan, it’s also important to keep older accounts open for as long as possible. The longer you have an account, the better your score will be.

Consolidate Your Debt

Consolidating all your debts into one single monthly payment will help you save time, effort, and money. Here’s how it works: if you’re paying off multiple loans and/or credit cards each month, having more than one creditor requires more time to track payments and budgets. 

In addition, if one loan starts making late payments, it can have a chain reaction on all other loans. Consolidating allows you to have just one creditor and only one payment due each month. As a result, you’ll save time by no longer having to deal with multiple creditors and the hassle of tracking multiple bills.

Monitor Your Credit Report & Dispute Any Errors

Your credit report is a snapshot of your financial history, and most banks and lenders use it to determine whether you’re someone they want to do business with. That’s why it’s essential to ensure your report is accurate. Not only can wrong information on your report make you look like a higher credit risk than you actually are, but the process of correcting that information can be tricky and time-consuming. 

To protect yourself, you should check your report regularly for any errors affecting your score. If you find anything that looks wrong or out-of-date, or if you’re being charged for something you don’t recognize (like a late payment on a debt that’s already been settled), you can dispute it. 

If you find any errors on your report, you’ll need to contact the credit bureau directly and submit a dispute form by mail or online. You can also submit supporting documentation along with your complaint.

Finance

3 Fundamental Steps to Manage Your Finances

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
money management

Money management refers to planning your money and liquid finances so that you can make the most of it. It typically involves saving and budgeting money, investing in future, and reducing or avoiding debt. Here are three fundamental steps that will help you gain more control over your money.

1. Assess Your Current Position

Money management is not just about making the math work. You need to adjust your mindset too. You need to take stock of your current position.

  • Have you been overspending frequently?
  • Do you have enough saved to tide you over a rainy patch?
  • Are you consistently living paycheck to paycheck?
  • Does financial jargon overwhelm you?

Don’t lie to yourself. You need to be prepared to face your weaknesses. There may have been a few missteps in the past. You don’t have to continue with those mistakes in the future. Be determined to undertake bold corrective measures.

2. Create a Financial Blueprint

Before you can put your plan into action, you need to create a blueprint that works for your finances. Use these steps:

Budget

Start with a budget. Choose a system that you know is easy enough to stick with. Most people find the 50/30/20 budget plan simple enough. You need to allocate 50% of your income to needs, 30% to wants, and 20% to debt repayment or savings. There are plenty of budgeting options to choose from if this doesn’t work for you.

Track your expenditure

You can have a better idea to where your money is going by tracking expenses. You may not spend so much on a certain category. Or, you may adjust your expenditure so that it aligns better with your goals during times of serious inflation and high gas prices.

Save

You will find various avenues to save and invest once you pay attention to your finances. You need to make long-term changes by tweaking daily habits and negotiating your spending. Ideally, money saving should become a part of your lifestyle over a period of time.

Separate your accounts

You should have designated and different accounts for savings and spending. A terrific way to manage your money is to keep money for bills and budgeted expenses in a designated account. This should be separate from your emergency fund. You will be less likely to blow up your rent money on a night of binge drinking with friends. Keep your savings in separate accounts if you are looking to vacation, purchase a house, or a new car.

Pay off expensive debts

An integral part of money management is creating a plan to pay off debt. A strategic approach will help you reach the debt-free finish line quicker. You need to tackle the most expensive debt first. These are the ones with the highest interest rates. Keep making minimum payments on the rest. Work your way down till all debt is paid off.

Build your credit score

Your credit determines the rates you get loans and other borrowings on. You can enhance all aspects of your financial life by developing good credit habits. Credit checks are common whether you are getting an apartment, car insurance, or a cell phone plan. Focus on the two biggest influencing factors – credit utilization and payment history. Make sure you pay everything on time. A single missed payment can affect your score.

Think about your financial future

It is never late to invest in your future. Set money aside in IRA or 401(k) now. The compound interest will work its magic. After all, the ultimate goal is to achieve long-term stability and financial freedom even in times when policies from the government seem to be working against you and everyone else.

3. Save, Invest, and Reduce Debt

Money management doesn’t just consider your expenditure. You need to have saved enough to live comfortably in both short-term and long-term. These are a few steps to achieve financial prowess:

Start saving now

Start building your emergency fund by socking away anything extra. You should ideally have 6 months of living expenses in case something unthinkable happens. You don’t need to start large. You can always start small. Work towards a $500 reserve goal as a starting point.

Invest

Nobody created wealth by savings alone. You need to invest and beat inflation to live comfortably in the long-term. You should consider contributing to 401(k) to set yourself up for retirement. Get the maximum contribution if your company offers a match.

Pay off outstanding debt

You probably have obligations whether it is a looming credit card bill or a loan. Make sure you never miss payments. At the least aim for minimum monthly payments. Pay off high-interest debt first if you have any extra money for bills.

Finance

Factors You Should Consider Before Taking Out a Personal Loan

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Loan

Taking out a personal loan can save the day for many. With debt levels rising significantly and emergency savings not always being available, more and more people are turning to personal loans when they are in a pickle.

Maybe you are considering getting a loan to consolidate your credit card debt, pay for emergency medical bills, or even start a small business.

And since almost every lender in the country is now offering personal loans, you can compare the offers and choose the best deal. A 0.25% difference in interest rate might not seem a big deal but it can help you save hundreds of dollars.

So, in this post, we have put together a list of key factors you need to keep in mind when choosing a personal loan.

Are You Okay With Paying High Interest Rates?

If you’re considering taking out a personal loan, interest rate is one of the most important things to think about.

Interest rate means the percentage of interest charged by the bank (lender) on the principal amount. You can either choose a variable interest rate loan or a fixed interest rate loan, depending on your preference.

If you take out a fixed interest loan, the bank will charge the same amount of interest throughout the course of your loan regardless of the market situation. In other words, your monthly installments will remain the same come the Wuhan virus or high water.

If your credit utilization ratio, debt-to-income ratio, and credit score are all good you can easily qualify for a lower rate of interest with most banks.

On the other hand, if you take out a variable interest loan, your bank can decrease or increase the rate of interest according to market changes. This means your monthly installments can also go up or down from time to time.

That being said, interest rates on personal loans are generally higher than, say, a mortgage loan. This is because a personal loan is unsecured and you have no physical asset to back it up. You don’t have to put any collateral up which increases bank’s risk.

Do You Have A Good Credit Score (And Credit History)?

Since a personal loan doesn’t involve any collateral, your credit score must be in good standing. A bad credit score will mean that the lender can significantly increase your interest rate. They do this to cover your risk of default.

So, if you’re considering a personal loan, pay attention to your credit score and try to improve it.

Do You know the Exact Terms of the Loan Including APR and Hidden Fees?

Before you sign the papers, make sure you completely understand the terms of your personal loan. You must know the total cost you will pay for the loan as well as all the fees you could/will incur throughout the loan.

APR or the annual percentage rate is the total cost of a personal loan and it’s applied on an annual basis. It includes the loan origination fees, interest, application fees, and several other charges which thankfully are not as debilitating in a low tax environment which we are in now.

Here is a quick rundown of some of the typical charges that aren’t always openly discussed when you apply for a loan:

Loan processing or origination fee: This is when the bank charges you to process your application. Some loan providers will charge you to process your personal loan application. For example, some banks charge 1% of the loan’s value as the processing fee.

We recommend you avoid all loans that come with a processing or origination fees – or ask the bank to waive it if possible.

Late payment fee: If you make your payment even a day late, most lenders will charge you a late payment fee. But this can really hurt your credit score so be very careful with your monthly payments. In some cases, you can ask the lender to waive this fee as a one-time courtesy.

Prepayment penalty: If you pay your personal loan early, then your lender may charge a prepayment penalty. Lenders use this tactic to get the full amount of interest from those who have taken out the loan. So, make sure you choose a loan that has no such penalty.

Failed payment fee: If you don’t have the money in your account to cover a payment you’ve made, some banks will charge you for it.

The Bottom Line

The decision of taking out a loan is a big financial responsibility and shouldn’t be taken lightly. Knowing about the above factors will help you choose the right lender with the most flexible terms. And remember, you can negotiate with lenders for more favorable terms – and you should, especially if you have a respectable credit score.