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3 Ways to Take Advantage of Your Rising Credit Scores

3 Ways to Take Advantage of Your Rising Credit Scores

There are many perks that come with having good credit. Not only do you get to live a life without fear of rejection from lenders and creditors, but you also get better interest rates that save you money. That’s why so many of us are consistently working to improve our credit and perhaps even atone for past mistakes

So what happens after you’ve managed to turn things around and bring your credit scores up to a respectable level? Great question! There are a few ways you can welcome yourself to the good life and take advantage of your newly-improved credit. Here are three such examples:

Apply for a rewards credit card and/or do a balance transfer

One of the biggest advantages to having good credit is that credit card companies actually offer you incentives to use their card. Depending on what appeals most to you, this could mean savings on airfare, hotel stays, or just straight-up cash back. When used wisely, and perhaps even a bit creatively, these rewards can save you money, while also helping to further improve your credit scores.

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Speaking of continuing to raise your scores, paying off your debt is a great way to do just that. Once again, as counterintuitive as it may sound, this is where getting approved for a new credit card can actually help. In some cases, credit cards will offer 0% interest for a set period of time. If that’s the case, you can transfer your existing balances from other cards over, allowing you to save on interest.

A word to the wise: just be sure to pay off the balance before the introductory offer expires. Without any new interest accruing, your entire monthly payment will go towards paying off the balance. This makes paying off the debt before the introductory period not only a wise goal but a realistic one as well.

Refinance your car loan

Seeing as cars and other personal vehicles are the preferred method of transportation for most Americans, there’s a good chance you own one. There’s also a strong likelihood that the interest rate you got stuck with when purchasing your car back in your poor credit days is costing you more than it should. While it’s not (yet?) possible to go back in time and get a better deal, it’s not too late to get a lower interest rate.

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Auto refinancing is a fairly straightforward process that in recent years has been growing in popularity. Part of the reason for that is auto loan terms have swelled over the years. In fact, while auto loans once averaged 60 months (5 years) in length, the availability of 6 and even 7 year financing terms have skewed that average upwards. As a result more lenders have stepped in to offer customers the opportunity to pay off their current loan and take out a new one with a better rate. Overall this is great news for first-time car buyers who may have been forced to overpay for a loan or anyone else who has recently turned their finances around.

A new twist on auto refinancing is peer to peer loans. Lending Club recently introduced a new auto refinancing program where borrowers get funds directly from individual investors instead of a bank. If the program proves popular, it’s likely other peer to peer lenders will enter the market. More competition will likely result in lower interest rates for consumers.

Reshuffle your debt by refinancing your mortgage

This one can get a little complicated, but stay with me. First, if you have a home, you’re aware that a mortgage can typically last for 30 years. That’s a long time to stay at the same interest rate you were given when your credit wasn’t so hot.

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Similar to your car loan, you can also refinance your mortgage in order to secure a better rate. However, this also gives the option of doing what’s called debt reshuffling, meaning you can take your other outstanding debts and bill them into your mortgage payment instead. One of the most common uses of this technique is to wipe out the dreaded student debt cloud that hangs over many Millennials.

Why would you bother doing this? Generally speaking, mortgage interest rates tend to be lower than those of other debt types, including student loans. Additionally, mortgage holders are entitled to tax deductions that other types of debt aren’t, making this a double win in some cases. All that being said, debt reshuffling might not be right for everyone, so you’ll want to do some extra research before pulling the trigger.

Get Your Finances in Order

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Getting your finances in order and raising your credit scores is not easy. Now is the time to take advantage of some of the perks that come with having good credit that you’ve missed out on over the past few years. In fact, by getting yourself a new rewards credit card and refinancing your current loans, you will save yourself some extra cash for some new adventures.

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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