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How often should you check your credit score?

How Often Should You Check Your Credit Report?

By | Credit Repair

Your credit report is a useful tool that helps you understand what financial information is impacting your credit score. On top of that, you can also use it to detect any fraudulent activity, such as accounts in your name that you never opened or excessive balances on existing cards that aren’t from you.

While there’s no need to worry about your credit report every single day, you can impose multiple checkpoints throughout the year to make sure you’re adequately tracking your credit for your financial needs and for your identity protection. Follow these simple tips for staying on top of your credit with regular credit report checks.

Annual Credit Check-up

If you’re wondering how often you should check your credit report, the bare minimum is once every year. The three major credit bureaus are Experian, Equifax, and TransUnion, and they are required by federal law to provide you with one free credit report each year. This gives you the opportunity to review all your account information. During your annual check-up, make sure your balances are all accurate. Also, make sure there aren’t any new loans or credit cards that you never opened.

It’s also smart to ensure any negative information that’s listed is correct. Make sure any late payments are actually true. They should automatically drop off after seven years. If you see anything older than that, you can dispute the entry with the relevant credit bureau.

Other Times to Check Your Credit Report

In addition to checking your credit report on an annual basis, you may also want to give it a thorough once-over in a few other situations. They may not be common in your life and are often associated with major life events. Check out these situations so you can perform a credit report check at the right times.

Applying for New Credit

Your credit report influences your credit score, which in turn affects whether you’ll be approved for new credit. It also impacts the interest rate you’ll receive, so if something is incorrect on your credit report, you could inadvertently pay more interest for new credit you get.

Something as simple as getting a credit card is worth checking your credit report, especially if you plan on carrying a balance. More importantly, however, is when you’re applying for a large loan, such as a mortgage or auto loan. These are typically longer-lasting balances, so you want to make sure your credit report is as strong as possible to avoid getting denied or carrying high-interest balances for years to come.

Searching for a New Job or Apartment

It may surprise you, but your credit report may be pulled by potential employers or landlords when you apply for a job or rental property. New employers likely want to know that you can handle responsibilities, especially if you work in a finance-related industry or handle money in some way. Landlords, on the other hand, want to feel confident that you’ll pay your rent each month. If you have a lot of late payments on your credit report, they may not want to approve your rental application.

Checking your credit report ahead of time not only lets you ensure its accuracy but also lets you see what your new employer or landlord will see. If there is an extenuating circumstance surrounding some of the entries on there, you can write a letter of explanation. This helps them view you as more than a number and can improve your chances if you have negative information on your credit report.

How to Check Your Credit Report

You can get a free copy of your credit report from www.annualcreditreport.com once a year. You can either get all three of the reports at the same time, or you can request to only get one of the reports at a time. This is a good option if you want to stagger the reports throughout the year if you’re on a budget.

If you need to monitor your credit reports more frequently, then you’ll have to pay. Each credit bureau offers different payment plans, where you can either enroll for monthly updates or just pay to check your report a single time.

If you’re just interested in a single report, the cost is:

  • TransUnion: $9.95
  • Equifax: $15.95
  • Experian: $14.95

Get Professional Credit Repair Help!

Not sure how to get those inaccurate entries removed from your credit report? Ovation Credit can help. Sign up for a free consultation today and find out how we can help you improve your credit score.

An organized desk with a planner on how to get out of debt.

Debt Avalanche vs the Snowball Effect: Which Payoff Strategy Is Better?

By | Debt

The decision to focus your energy on paying off your debt is an incredible step in taking control of your finances. Once you’ve knocked out high-interest debt in particular, you’ll free up your money to then hit even greater goals for things like a down payment on a home, retirement savings, or a vacation.

To be really strategic with the funds you have available for paying down debt, consider choosing between two popular methods: the debt avalanche or the snowball effect. Not sure what those two strategies entail? Keep reading to find out what they mean and which is better for you.

What Is a Debt Avalanche?

The debt avalanche method has you prioritize your debts by interest rate. You’ll need to start by finding out all your current APRs across the accounts you want to pay off, including credit cards, loans, and lines of credit. Once you’ve identified the balance with the highest rate, you’ll funnel all your extra debt payments to that account. You’ll still need to make the minimum payments on all your other debt. Any money you can divert to extra payments, however, should be focused on that first balance with the highest interest. Once you knock that one out, you’ll then move on to the debt with the next highest rate.

Advantages

The single greatest advantage to the debt avalanche strategy is that it saves you the most money in the long run. Because you’re tackling the highest interest rate, you’ll stop paying that APR sooner, regardless of what your balance is. That means you’ll start accruing less debt from a growing principal balance thanks to those high rates.

Sometimes the choice might be as obvious as a credit card with an 18 percent APR versus a car payment with a 6 percent APR. Clearly, you’ll save more money if you can get rid of that 18 percent rate faster. If you have multiple credit cards or high-interest personal loans, you may need to do some digging as to which one will save you more over time.

Disadvantages

While it makes sense to pay down your biggest APR debt from a financial perspective, it might not be the best move from a morale perspective. It can take longer to get a win depending on how high your balance is from the start. Still, if you can stay motivated, you could end up saving a lot more money throughout your entire debt payoff process.

What Is the Snowball Effect?

There are a few key differences when considering a debt avalanche versus the snowball effect for your payoff strategy. The snowball effect has you start by paying off your smallest debt, regardless of how much the interest rate may be. After you pay down that balance, you then move to the next smallest balance.

In the meantime, you’re still paying minimum balances on all your other accounts. As you pay and focus on lower-dollar balances, you gain momentum and confidence in your ability to knock out your debt altogether.

Advantages

The debt snowball effect has the power to keep you motivated to continue making progress. When comparing the debt avalanche versus the snowball effect, you might automatically assume that the best option is the first one, since you have the potential to save more in the long term. But if you lose momentum and instead give up on your debt payoff goals, you’re not doing yourself any financial favors.

Instead, give yourself the easy win with the debt snowball. Once you get the ball rolling, you’ll be inspired to keep funneling your extra dollars to paying off debt. One small victory leads to a larger victory until you’ve ultimately knocked out your debt completely.

Disadvantages

The obvious disadvantage to the snowball effect compared to the debt avalanche is that you could potentially end up paying more cash in interest over time. If your smallest balance happens to have a low-interest rate, you’ll have more months where you’re paying on those higher rate accounts.

You really have to weigh the pros and cons of what motivates you more: saving money or having the stamina to keep making those extra payments each month. It’s an extremely personal decision and, ultimately, there’s no right or wrong answer.

Ready to start improving your credit score in order to qualify for lower credit rates? Get a free consultation with Ovation Credit to see how our credit experts can help you with the credit repair process.

Cheerful newlyweds celebrating marriage.

6 Financial Tips for Newlyweds

By | Personal Finance

Wedding season is in full swing and whether you’ve been married for a month or a year, there’s no time like the present to sit down with your spouse and make sure you’re on the same page, financially speaking. If you’re not sure where to start, we’ve got six savvy tips for you to follow together so you can maximize your financial resources while minimizing the conflict in your relationship.

1. Figure Out Where Your Finances Stand Today

Marriage is the beginning of a joint life together, and that means you both need to be honest about how you’ve independently managed your finances up to this point. Whether good or bad or likely a mix of the two, you need to sit down and go over both your current savings and debt. For savings, remember to include both basic savings accounts, any investments, and retirement plans through work or other sources.

For debt, add up everything you own on credit cards, student loans, car loans, and even a mortgage if one or both of you have bought a house already. All this information helps you understand what your big picture looks like when you combine your household.

2. Determine How to Share Money

Your next step as a newly married couple is to figure out how you want to share your money. Do you want a joint account where all your earnings go? Separate accounts for discretionary spending? Or do you want to keep everything entirely separate? These are important questions to delve into because they lay the foundation for how much transparency is expected.

Also begin discussing each of your goals for the short-term, mid-term, and long-term. This involves some of those big-picture questions like if and when you want to start a family or how much you want to save toward vacation each year. Be open with your responses and remember that both of your opinions are equally important.

3. Make Intersecting Budgets

Once you have an idea of how the money will be physically managed in terms of accounts, the next finance tip for newlyweds is to talk budgets. Divide up how bills are to be paid along with who’s responsible for making the payments. This helps to make sure nothing falls through the cracks because you assumed your spouse was taking care of a particular bill.

You should both also be aware of how money is being spent—secrets in marriage are never a good thing. For larger purchases, consider what amount can reasonably spend on a single purchase without a joint discussion first. For example, maybe anything over $100 should be a decision made by both individuals. Talk about it together and decide what feels right.

4. Plan for Taxes

When you get married, you’ll probably start filing your taxes jointly. At work, you both need to fill out a new Employee’s Withholding Allowance Certificate (Form W-4) to update your marital status and your withholding allowance for your W-2. You may both be taxed at a higher rate, so do this early on so you don’t end up owing a high tax bill at the end of the year. You may also need to adjust your budget if more money is coming out of your paycheck each month to go toward the higher tax responsibility.

5. Prepare for Future Life Events

An often neglected finance tip for newlyweds is creating a will if you haven’t done so already. You’ll want to list your spouse as the beneficiary to your assets to make sure you quickly receive those benefits in unexpected and unfortunate circumstances.

Also, review your insurance needs. See if you can combine health insurance coverage to save money, and check to see if you need life insurance coverage to make sure you or your spouse could comfortably live with your financial obligations if one of you passed away suddenly.

6. Seek Professional Help as Necessary

Some of these decisions can get heavy, especially if it’s new territory in a relationship. Don’t be afraid to get professional help, such as a financial planner or tax advisor. If one or both of you have bad credit, you can schedule a free credit repair consultation with Ovation Credit to help prepare for future financial goals.

Make the gig economy work for you.

7 Tips to Use the Gig Economy to Your Advantage

By | Personal Finance

Flexible schedules, greater work-life balance, and the opportunity to do work on your own terms. Driven by the promise of these benefits, more and more Americans are joining the “gig economy” each day. The gig economy basically describes work done on a part-time or freelance basis, in which you work as an independent contractor instead of a regular employee. Gig workers comprise 35 percent of the U.S. workforce — a number that is expected to climb to 43 percent by 2020, according to the Bureau of Labor Statistics. Whether it’s freelance writing, driving for Uber, selling your clothes on Poshmark, or delivering takeout, gigs can offer a more flexible alternative to a traditional 9–5 position — or provide a source of additional income.

If you’re fascinated by the possibilities of gig work but nervous to take on the risk, read on for our top seven gig economy tips to maximize your opportunities.

1. Tap Into the Latest Apps

Tech-savvy millennials powered the shift to the gig economy — and now, more and more gig-based mobile apps are popping up to meet their needs. When you download Amazon Flex, for example, you can sign up for blocks of time when you’ll be available to make deliveries in your area. With a meal delivery app like Caviar or DoorDash, you can similarly designate your own availability and receive alerts for nearby opportunities. Other popular options include HopSkipDrive, a ridesharing solution for kids; Instacart, a grocery delivery service; and Rover, a pet-sitting company. Chances are, if there is a service people need, you can find a company that’s looking for gig workers.

2. Make a Plan

It helps to map out a list of the potential gigs you’re interested in, as well as the type of schedule you want to work and your goals. How much are you looking to make, and what are you willing to sacrifice? Most gigs come without standard benefits like health insurance or a 401K — and the part-time or short-term nature of the work means that you may have to cobble together several different gigs to round out a decent income.

3. Be Comfortable With Marketing Yourself

Many gig workers find success by working with multiple platforms or companies. In doing so, you can become your own boss — which means you need to promote yourself, either via your chosen platform or your social media account. Interact with your customers, ask for reviews, and accept as many offers of work as possible. Stay up to date on the latest trends in your industry, whether that means taking online classes or perusing trade books.

4. Organize Your Gig Lifestyle

Because your schedule might change from week to week — and your tasks might vary on a daily basis — you’ll want to dedicate a calendar to record each of your gigs. Each task, no matter how small, should be added to your calendar. Set reminders to follow up on your paycheck for each gig.

5. Keep All Records

One of the top gig economy tips is to set aside a portion of your earnings for income tax purposes since the taxes are not automatically withheld as in a traditional employee situation. Calculate how much you’ll need to set aside for taxes — usually around 25 percent to 30 percent of your income. Remember to hold onto receipts and records that you may need for tax time.

6. Prepare for the Unknown

With determination and drive, you can be successful as a gig worker. However, these jobs tend to be less stable, and there may be times when the gigs seem to dry up. Make sure you’re open to the idea of looking for other work opportunities — and that you have fully considered your Plan B if your chosen gig doesn’t work out.

7. Establish a Regular Routine

As freeing as the gig economy sounds, it does require a certain amount of discipline. Each day, you should wake up and get dressed at the same time to set the tone for the day — even if you don’t have any gigs lined up yet. Devote a chunk of time to work on your resume or profile — think of it as self-promotion or branding. Stick to the work schedule you set for yourself as much as you can.

Get Your Finances in Order

At Ovation Credit, we applaud the energy, tenacity, and passion of gig workers. As you put these gig economy tips into action, let us help you make the most of your financial life. Contact us for a free credit consultation today.

References

https://www.wonolo.com/blog/best-gig-economy-apps/

http://www.forbes.com/sites/quora/2019/01/08/what-are-the-pros-and-cons-of-the-gig-economy/amp/

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