Published on: 03 February 2022
Last Updated on: 12 September 2024
Inflation is up, money is tight, and your credit score is in the gutter. What a way to start the year!
Instead of wallowing in self-pity, it’s time to finally do something about your unfortunate credit score. This January, kick-off an improvement plan to improve your credit score by the time the clock strikes midnight on Dec. 31.
5 Lucrative Ways Improve Your Credit Score:
1. Know What You’re Working With
You can’t fix a problem you can’t see. If you’ve been avoiding checking your credit score for fear of what you’ll find, get over yourself. Now is the time to set aside your pride and review the damage. Your credit score impacts nearly every financial move you make. Working to improve it now, before you consider shopping for a major purchase, can make your life easier.
Pull up your free annual credit report to review the data that’s been reported to the credit bureaus. If you’ve got missed payments, high credit utilization, or too many accounts, take note. Then consider your overall score. Anything under 700 should be seen as an opportunity to improve. Now you’re ready to create your action plan.
2. Take Action Daily
You can make measured improvements on your credit score just by being mindful of your daily actions. If you struggle with overspending, pause before you swipe your card. Consider whether the purchase you’re about to make meets your goals and if you’ve got the money to repay the balance.
If the answer to either is no, resist the urge to buy. Instead, save up for want-based purchases so you can treat yourself without sacrificing financial security.
In an e-commerce age, you probably can’t eliminate plastic from your purchasing repertoire entirely, but you can be smarter about it. Familiarize yourself with different payment options like acredit builder card. These cards are secured by a funds transfer or initial deposit. Every time you pay your bill, your good payment history is reported to the credit bureaus. Over time, this great track record can improve your score.
3. Get Your Budget on Point
The way you spend often dictates how well you can keep up with the demands of your bills. While everyone has core expenses across housing, food, and transportation, it’s essential to manage one’s variable expenses. Sit down with the last two months of your spending history to identify budget busters and trends you’d like to address.
If dining out is a sore spot for your budget, create a system to help you indulge with purpose. Set a dollar amount that you can spend without dipping into cash reserves dedicated for other expenses. Think about why you like to spend in this category and whether there’s another way to fill your cup.
If your real desire is to spend time with friends, pivot to hosting a small potluck dinner once a month. Adjust your spending toward this event, and you just may find you like the results better than gathering at restaurants.
4. Dispute Inaccuracies
Your comprehensive credit report may be telling lies about you. If your careful review identifies inaccuracies in your report, it’s in your best interest to dispute them. Late payments are one of the biggest dings on your credit report. If you’re a reliable payer, it’s only fair to fix any errors in your report.
First, reach out to the company reporting the information to the bureaus to dispute your account status. Then report the error to the credit reporting bureaus. You’ll need to include a dispute form and documentation supporting your case.
This process can take months to resolve, so stay the course on other credit-boosting activities while you wait. Inaccurate reports happen, so it’s important to review your credit report regularly so you can quickly address them.
5. Attack the Two Most Impactful Credit Factors
Put your energy into the most impactful parts of your credit score: on-time payments and credit utilization. Your payment history drives 35% of your credit score. If you have a history of late payments, you’re killing your score. Catch up on missed payments and create a system to help you manage your bills. Set up autopay for your core bills (rent/mortgage, utilities, insurance, etc.) so you can ensure that your obligations are covered.
The second most impactful area of your financial behavior is credit utilization, which makes up 30% of your score. Credit utilization — the percentage of your available credit that you’re using at any given time — signifies how well you manage money. Work to keep your utilization below 30% to earn a good mark from the credit bureaus.
If you can, request a credit limit increase to improve that percentage, but resist the urge to tap into it. Consider making payments toward your balance as you make changes to keep your utilization low.
Creating the Accountability to Stay on Track
Any goal is more achievable when you breathe life into it. So create a vision board of your credit score goals and post it where you can see it daily. Talk about your plan with your friends and family to create an accountability team for your new credit-building habits. Monitor your progress regularly and course-correct if you need to.
The more you interact with your plan and assess your behavior, the more likely you are to be successful. Who knows? After a year of hard work, sacrifice, and intentional effort, your score could even climb from poor to exceptional.
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Car finance allows drivers to spread the cost of a new or used car into affordable monthly payments. By borrowing money from a lender, drivers can purchase a car and pay the lender back in monthly installments until the end of the agreed term. Negative equity is a term you may hear often with car finance, and for many drivers, it is best to avoid it. Find out how you can ensure you don’t end up with negative equity and what to do next if you find yourself in this situation.
What Is Negative Equity?
In car finance, negative equity is when you owe more on your loan than your car is worth. Negative equity can be known as outstanding car finance or an upside-down loan which means if you sold your car to clear the loan, you still wouldn’t have been able to pay the balance off.
For example, if your settlement figure was £6,000 and your car was worth £4,000, you would still owe the finance company £2,000. Usually, negative equity happens when the value of your car drops quickly during your agreement. This is especially common with brand-new cars, as they can lose up to 50% of their value in the first few years of ownership.
Here, if you want to trade in your car but have negative equity, you will need to repay the loan amount before you take a new loan to purchase a new vehicle.
What Are The Reasons For Negative Equity?
Basically, a negative equity situation happens for a variety of reasons. For instance, an upside-down situation in regard to a car loan can happen due to the following reasons:
You might have a loan for a longer term. Apart from that, your vehicle has also gone through depreciation since your purchase.
There is a no-money-down auto loan in your case, or you might have paid more than the sticker price of the vehicle due to the inclusion of add-ons.
You might have purchased an expensive vehicle, which might not have the same value that you expected during the purchase.
Your debt regarding the loan is of a high rate of interest. Hence, most of the money that you are paying is going to the interest as compared to the principal.
Depreciation is also a major factor in this case. Basically, the term rate of depreciation shows how fast an asset loses its value. Generally, a car loses almost 20% of its value in the first year itself. Furthermore, the process of depreciation continues to happen in the following years until the car fully loses its value.
Why Is Negative Equity Problematic?
Negative equity within your car finance deal can be an issue because you will still owe the lender money even if you sell your car. In some cases, you may not be able to sell the car, too. If you find your circumstances have changed and you can’t afford to carry on with the loan, you may be charged additional fees for missed or late payments, and it can lead to much more serious financial consequences.
How Do You Avoid Negative Equity In The First Place?
Before you take out a car finance deal, consider these factors below to help prevent negative equity from occurring:
Only Borrow What You Can Afford. If you’re in a position to buy a new car on finance, it’s important you use a car payment calculator first to see how your loan could look and make sure it is affordable. This may mean choosing a used car over a brand-new car, as older cars usually have already depreciated at their fastest rate in previous years.
Put Down A Larger Deposit. A larger deposit contribution at the start of your finance agreement can help to reduce your loan amount. A smaller loan can help to reduce the risk of your car being worth less than how much you owe.
Choose A Slower Depreciating Car. If you want to avoid negative equity, you could consider choosing a car that depreciates at a slower rate. Cars that hold their value will be less likely to leave you out of pocket at the end of your car finance deal.
Make Higher Payments. Negative equity can often be associated with PCP deals as they offer low payments and a large balloon payment at the end of the deal. Opting for a deal such as a hire purchase, which aims to pay off the value of the car at the end of the deal and has higher monthly payments, can help avoid any outstanding finance.
How Do You Get Out Of Negative Equity?
There are different ways of getting out of negative equity. However, based on your current situation, you will need to choose which way works the best for you. Basically, you will need to choose the one that goes with your budget. Furthermore, it also depends on whether you want to keep the vehicle or not.
Hence, to get out of negative equity, make sure you do the following:
1. Start By Paying Off The Loan
The most obvious way to pay off your negative equity is to accelerate your payment. Here, the faster you pay your loan off, the sooner you will be able to deal with the debt. One of the best ways of paying off the loan is to pay extra on the principal part. Apart from that, you can also consider paying a lump-sum amount beforehand to avoid paying interest for a longer period.
Hence, you must consider reviewing your budget and savings from time to time to pay off your existing debt.
2. Loan Refinancing
Here, you might consider taking out a new loan to pay off your existing debt. This will help you in getting out of your upside-down car loan faster. This works even better if you can avail of a new loan with a lower rate of interest.
3. Selling The Vehicle
If you do not need the vehicle, you can consider selling off the vehicle. This way, you can get a lump sum of cash, which will allow you to pay off the loan. Furthermore, if you sell the vehicle to a private buyer, you will have the option to negotiate the price further. This will enable you to get more cash, which will further help you to pay off the negative equity.
4. Surrendering The Vehicle
If you handle the vehicle to the lender, you can get out of the negative equity, too. In addition to that, if you do a voluntary surrender, you will be more likely to get out of the negative equity.
Summing Up: Getting Out Of Negative Equity
If you’ve not been able to avoid negative equity and need to know how to get yourself out of it, follow the top tips below:
If you can still afford your current car finance payments, it is recommended you stick with the deal you have at the moment. In many cases, your deal will balance out over the duration of the loan, and the negative equity should be settled by the time you reach the final payment.
You could pay off your negative equity by paying the lender in cash.
You can hand your car back to the lender through Voluntary Termination. If you’ve paid half of your agreement off, you could return the car to the lender. It’s always best to speak with your lender first, though, to see how they could help you.
Do you have any more ideas to add? Consider sharing in the comment section below.
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The ever-increasing interest rates have many people wondering about a potential recession that could be just around the corner. While some might think that there is no good place left to invest your money, we are here to tell you that you can potentially expand your investment horizon and set up this year for better returns later on.
Here are three great investment platforms to invest your money and generate profit in the long run.
Read on to learn more!
What Is Meant By Investment Platforms?
An investment platform refers to a digital tool or service that helps investors access as well as manage different financial instruments. It can either be a stock, a mutual fund, a bond, or an exchange-traded fund. Such platforms offer a user-friendly and convenient way for investors to purchase, sell, and monitor their portfolios. It also includes rwa tokenization.
Investment platforms can be found in multiple forms, such as online brokerage, peer-to-peer lending platforms, and robo-advisors. Each platform type caters to multiple investment strategies as well as requirements, thereby providing a ton of fees, support services, and features. But as for now, it is significant to opt for the right platform for making investments.
Investment Platform Types You Should Know
Investments are mostly categorized under closed-end funds, unit investment trusts, and mutual funds. All such investments have their own set of challenges, risks, and benefits. Well, it’s pretty much the same case for investment platforms. Before setting foot, it is significant that you discover its primary types:
Robo-Advisors
These tend to be the automated investment management platforms that make use of algorithms for creating as well as managing portfolios. Typically, the portfolios are customized according to the investor’s financial goals and risk tolerance. Some popular robo-advisors are Wealthfront, Digital Advisor by Vanguard and Betterment.
Platforms For Online Brokerage
Digital brokerage platforms refer to online services that let investors buy and sell different financial instruments like bonds, mutual funds, and stocks. Instances of popular brokerage platforms are Charles Schwab, Fidelity, and E-Trade.
Cryptocurrency Exchanges
Thirdly, there are cryptocurrency exchanges are those platforms that let users trade, buy, and sell online currencies. These can be Ripple, Ethereum, and Bitcoin. To name a few famous Cryptocurrency exchanges, Kraken, Binance, and Coinbase deserve mention.
Platforms For Peer-to-Peer Lending
These platforms are designed to facilitate loans between businesses and individuals, cross-sectioning conventional financial entities. Such platforms establish connections between lenders and borrowers, leading to potentially higher ROI for investors.
Investment Platforms That Are Becoming Popular In 2023
Hold your breath as you are going to discover some smart investment platforms that have been doing the talk in 2023. Due to their ease of use, these platforms are most likely to get popular in the coming years, too. So, check them out here and make a smart investment:
Cryptocurrency
Suppose you are looking for ways to improve your financial situation. In that case, you might want to look into cryptocurrency, which is essentially digital money that relies on blockchain technology and is secured through cryptography.In case you are new to cryptocurrency, you will want to know how it works, which is what we are about to tell you. Regarding blockchain, the ledger keeps track of transactions, including intellectual and physical assets.
The access is distributed amongst the “authorized” users, and all shared information is transparent and instant. Also, the information cannot be tampered with, even by the administrator. If this sounds good, you might want to check out CoinCulture: Your Source for a Detailed CoinSpot Review and find interesting news and reviews about the competitive and profitable industry.Security is a basic part of blockchain, which ensures that your money and profit are completely yours.
Invest In Gold
Another way to improve your financial situation is by investing in Gold. In fact, investing in Gold and Silver is considered a smart strategy against inflation. Over the long run, Gild doesn’t only maintain its value but also maintains its purchasing cost despite the potential fluctuations in the dollar.
Moreover, the high inflation periods serve as an excellent time to boost your allocations to Gold. You might already have an idea about how the stock markets work. When an economy goes into recession, the stock market slumps, too, which means that real estate can lose its value, too. This is where the importance of Gold comes in.During the recession, Gold can establish a diverse portfolio, which further reduces your exposure to riskier assets.
High-Yield Savings Accounts
In case you haven’t heard about a high-yield savings account before, you should know that it pays the investors interest on their cash balance. Like any other savings account at any physical bank, a high-yield account is instantly accessible for cash.
A savings account is a brilliant option for those looking forward to a contingency plan. Also, if you want to avoid the risk of losing your money while investing, then a high-yield savings account might be just the right option for you.
However, before you start investing in a high-yield savings account, you will want to assess your finances and create a budget. The key to having a budget is that you will have a clear overview of your incoming and outgoing money. And you will know where you are overspending and how you can cut your expenses.
Once you have a better overview of your incoming and outgoing money, you will find it easier to stick to a budget.
The Bottom Line
Investment platforms have a pivotal role to play in the current financial landscape. Not only does it provide investors with the resources and tools needed to manage their portfolios, but it also builds an opportunity for having a passive source of income. By comprehending the most popular investment platforms, it’s your chance to boost your investments.
So, what are you waiting for? 2023, 2024, and the subsequent years have proven lucrative for the investment industry. Make hay while the sun shines, or you can lose great opportunities to circulate your money.
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Only a few years ago, people were skeptical about cryptocurrencies. Nowadays, blockchain technology is a leading investment direction and profit source. Hardly someone can be found on the planet who hasn’t heard about Bitcoin or Ethereum.
However, there is still a stereotype about the digital currency market. Few people are involved in it since most people think it’s a complicated and risky industry. Yes, the likelihood of losing all your money is high if you are completely ignorant about digital currencies.
To avoid such an unpleasant situation and, on the contrary, start investing in cryptocurrencies and making money, you should educate yourself about the market. So start your journey by picking a good crypto exchange. This guide will teach you how to identify a reliable digital currency exchange and make safe transactions.
What is Cryptocurrency Exchange?
Cryptocurrency exchanges are digital platforms where people can sell the currency they have or purchase another one. For example, on such platforms, you can convert BNB to MATIC. Moreover, besides crypto, your exchange destination can also be fiat currency, e.g., by giving BNB, you can receive US dollars. After performing currency exchange on the platform, you can either keep the money in your cryptocurrency wallet or transfer funds to your bank account.
How to Choose a Reliable Crypto Exchange?
Unfortunately, the availability of hundreds of crypto exchanges makes it difficult to choose a good one. Investors worry about the security of their funds and don’t want to meet scammers. Here are a few criteria that will help you identify a reliable instant crypto exchange.
1. Pay Attention to Security Procedures
One of the reasons investors become victims of scammers is that they don’t spend enough time verifying the platforms’ authenticity. First of all, you should check each platform’s Terms and Conditions and Privacy Policy sections to ensure that a legitimate company manages the website. But don’t entirely trust this information. Always make sure to check the exchange’s reputation on the internet. Finally, read customer reviews and feedback to learn what users think about the platform.
2. Availability of Multiple Payment Methods Matter
Crypto exchanges accept payments via credit cards, PayPal, and digital wallets. Most platforms also allow purchasing crypto by paying via other digital currencies. The exchange must accept payments via credit card or PayPal for beginner traders to acquire their first coins.
3. Large Variety of Supported Currencies
Almost all exchange platforms convert famous currencies like Bitcoin and Ethereum. However, few people know that there are thousands of digital currencies. Unfortunately, exchanges don’t support all of them. Hence, investors should choose a relatively popular cryptocurrency, on the one hand, and a platform that supports transactions to and from this currency.
4. Transparent Transaction Fees
Before choosing a crypto exchange platform, make sure that it has a transparent transaction fee policy. Unfortunately, some exchanges have hidden fees that investors notice after making several transactions.
Final Thoughts
Cryptocurrencies are good sources of income if you succeed in choosing a reliable exchange platform. Several criteria can help you with this task. First, make sure that the platform’s operation is legitimate. It should also support several currencies, payment methods and have a transparent transaction policy.
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Any goal is more achievable when you breathe life into it. So create a vision board of your credit score goals and post it where you can see it daily. Talk about your plan with your friends and family to create an accountability team for your new credit-building habits. Monitor your progress regularly and course-correct if you need to.
The more you interact with your plan and assess your behavior, the more likely you are to be successful. Who knows? After a year of hard work, sacrifice, and intentional effort, your score could even climb from poor to exceptional.
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