How to Improve Your Credit Score

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If you’ve been reading this blog for a while, you know I like to pay cash for most of my purchases (even big ones like cars). However, two years ago when we moved to Florida I had to qualify for a mortgage, on my own.

(Long story – but we were buying a house before we sold our current house and my husband was between jobs, so I was on my own to qualify for our new home).

I’ve always paid our bills on time (thank-you automatic bill pay) but never paid much attention to my credit score because we always paid cash for everything. Then, all of a sudden I was consumed with credit scores, reports, bank statements, and every other piece of financial paperwork from the last three years of my life.

I didn’t realize that there were things you could do to raise (or hurt your credit score) until I needed the best score possible to get a great mortgage rate for our home loan.

How to monitor your credit report for free.

Pay your bills on time

As long as you are living within your means, this should be very simple since every bank offers automatic bill pay. All of my bills are paid automatically each month so I don’t even think about making payments and am never late even if I’m sick, on vacation or super busy.

Keep your balances low  

Ideally, you should pay your bills in full every month, but if you can’t, make sure your balances remain low. If it looks like you have maxed out your credit cards, your credit score may decrease. 

Use credit cards responsibly

While you don’t need to have a credit card to improve your credit score, having a credit card history that includes timely payments is a great way to work to increase your credit score. Don’t open multiple new accounts in a short period of time (that can decrease your score) but rather keep a few accounts in good standing and your score will improve.

Monitor your credit score

I truly believe that knowledge is power and knowing your credit score will allow you to make the best decisions regarding your credit and purchases.

Discover recently launched a new site, Credit Scorecard, where you can check your credit score for free.

Available to all consumers (not just Discover cardmembers), you can check your FICO® Credit Score which is the score used by 90% of the top lenders.

creditscorecard

In a recent survey, Discover found that 61% of people who checked their credit score improved their credit behavior. You can’t fix something if you don’t know it’s broken, right?

Over the years, I’ve met many people who stick their head in the sand when it comes to their finances. Educating yourself to become a smart consumer is the best way to improve your financial future.

This post may contain a link to an affiliate. See my disclosure policy for more information.

Five Smart Ways to Use Your Tax Refund

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By now most people have filed and received their tax refund. In fact, I can remember trying to file as early as possible when we knew we were getting a refund.

While it can be tempting to blow your tax refund on fun and entertainment here are five smarter ways to spend your money.

By now most people have filed and received their tax refund. In fact, I can remember trying to file as early as possible when we knew we were getting a refund. While it can be tempting to blow your tax refund on fun and entertainment here are five smarter ways to spend your money.

Pay off lingering bills

If you are still paying for that furniture set or washer and dryer from nine months ago, put your tax refund to work for you. Paying off your revolving debt will free up extra money every month for you to save towards other expenses, investments, or family fun.

Invest in your home

Do you have an old, rotting tree that needs to be cut down? Is your refrigerator on the fritz? Has your carpet seen better days? Repairing or replacing items in your home before they completely stop working can actually save you money in the long run.

Home improvement projects such as getting an air conditioner tune up, replacing light bulbs with LED’s, or installing ceiling fans are great ways to invest in cost saving, environmentally friendly improvements to your home.

If you own your home, certain repairs and upgrades can actually be a tax deduction if you ever sell your home.

Build your credit

For my children, tax refunds can be a great way to build credit. My son doesn’t have any credit cards, because he’s not the best budgeter. However, he can use his tax refund to apply for a Discover it® Secured Credit Card.

The credit limit on a secured card is equal to the deposit on the card, so it helps him learn good spending habits because he can’t spend more money than he has.

The Discover it Secured Card offers 2% cash back at gas stations and restaurants and 1% on other purchases. There is no annual fee, a fraud liability guarantee, and the same awesome Freeze ItSM feature, which can help prevent new purchases if your card is lost or stolen.

Invest it

It’s never too early or too late to start investing your extra money. We have several Roth IRA’s as well as a traditional IRA. It’s nice to build up your retirement accounts (or emergency fund) with a big deposit once a year.

Start a business

Last year I started a business with a $1,500 investment (which is about ½ the amount of the average American tax refund). With a lot of hard work, I was about to turn that $1,500 into a $100,000 business by the end of the year.

If there is a business that you have been thinking about starting, using the extra money from your tax refund can be a great way to get started.

Remember, while it might be fun to brainstorm ways you can blow your tax refund, making smart decisions with your money will improve your financial future.

This post may contain a link to an affiliate. See my disclosure policy for more information.

Grocery Budget Makeover: Registration is Open!

Grocery Budget Makeover is a 10-week course where Erin Chase from $5 Dinners teaches you her system for making budget-friendly meals and keeping her grocery budget in check.

Grocery Budget Makeover is a 10-week course where Erin Chase from $5 Dinners teaches you her system for making budget-friendly meals and keeping her grocery budget in check.

The next course begins next Tuesday, May 17, 2016. Registration is open through Monday.

Does 10 weeks sound too long to you? Erin has a new 4-week version of the course. The “Express” version of the makeover is all the same great content bundled up and sent to you over 4 weeks instead of spread out over 10 weeks.

The course includes videos (plus worksheets and more), but there is also an audio edition if you have time for listening but not watching!

Register for Grocery Budget Makeover today!

 

 

This post may contain a link to an affiliate. See my disclosure policy for more information.

Teaching Teens About Money

This year I’m excited to be partnering with Discover to share many of the great programs they offer consumers. All opinions are my own.

Did you know that April is Financial Literacy Month? This is a great opportunity to educate your teenage and young adult children on how to better manage their money.

Many teens will be starting their first job this summer and now is a great time to help them get smart about their finances before they bring home their first paycheck.

Many teens will be starting their first job this summer and now is a great time to help them get smart about their finances before they bring home their first paycheck. Here are five ways you can help your kids get on the right financial track this month.

Here are five ways you can help your kids get on the right financial track this month.

Savings

30% of consumers report having no extra cash.* Help your child join the 70% of consumers who have some savings by helping them set up an automatic savings plan, so they have money in case of an emergency or unexpected expense.

Encourage your child to save a small portion of their paycheck every week. Sometimes it helps if you are able to give them a savings incentive.

Savings incentives could be matching their savings contributions, offering to pay for half of things like cars or college (if possible), or giving them bonuses for reaching certain savings goals.

Credit Cards

Helping your older child build credit without going into debt is a very important lesson that can impact them financially for years to come.

My first credit card was a secured card, which I highly recommend for teens and young adults. With a secured card you use your initial deposit as your credit limit, meaning you can’t charge more than you’ve put down.

With the Discover it® Secured Card, your child can enjoy the full suite of Discover card benefits like 2% cash back at gas stations and restaurants, while they are building credit. The Discover it Secured Card reports your payment history to all three credit bureaus.

This is a great way to build credit without being tempted to spend more than they can pay every month.

Create a Budget

Last year I sat down with one of my children and helped them create a budget. You can imagine their surprise when they realized they had more bills than money. Their tight budget meant that they were unprepared for any kind of emergency.

Don’t wait until your child needs a major financial intervention to talk about budgeting. Even young children can set up a small budget when they start to receive a regular allowance. Help them make a list of all their monthly expenses and evaluate them based on their regular income.

Remind them to include savings in their budget.

Credit Score

Even though your teenager might not have any credit at sixteen, it’s important to explain to them the importance of maintaining an excellent credit score. Make sure your children know how to obtain a credit report when they are older (Discover cardmembers receive their FICO ® Credit Score for free on monthly statements and online).

Explain to them that paying bills late or not paying them at all will lead to a lower credit score, which could mean higher interest rates on credit cards, auto and home loans in the future.

Taxes

I remember my son was shocked when he received his first paycheck and it was much less than he expected. He didn’t realize things like taxes and social security would be taking a chunk out of his check every month.

Help your child understand that these deductions need to be accounted for and make sure they have enough taxes taken out of their paycheck every month so they aren’t surprised next April.

It’s never too early to start teaching your kids about money. When it comes to finances, ignorance is not bliss! Set your child up for financial success by helping them develop good spending and saving habits when they are young.

*source

This post may contain a link to an affiliate. See my disclosure policy for more information.