Tag: income

Should You Refinance Your Student Loans?

Due to financial consequences of COVID-19 — and the broader impact on our economy — now is an excellent time to consider refinancing most loans you have. This can include mortgage debt you have that may be converted to a new loan with a lower interest rate, as well as auto loans, personal loans, and more.

Refinancing student loans can also make sense if you’re willing to transition student loans you currently have into a new loan with a private lender. Make sure to take time to compare rates to see how you could save money on interest, potentially pay down student loans faster, or even both if you took the steps to refinance.

Get Started and Compare Rates Now

Still, it’s important to keep a close eye on policies and changes from the federal government that have already taken place, as well as changes that might come to fruition in the next weeks or months. Currently, all federal student loans are locked in at a 0% APR and payments are suspended during that time. This change started on March 13, 2020 and lasts for 60 days, so borrowers with federal loans can skip payments and avoid interest charges until the middle of May 2020.

It’s hard to say what will happen after that, but it’s smart to start figuring out your next steps and determining if student loan refinancing makes sense for your situation. Note that, in addition to lower interest rates than you can get with federal student loans, many private student lenders offer signup bonuses as well. With the help of a lower rate and an initial bonus, you could end up far “ahead” by refinancing in a financial sense.

Still, there are definitely some negatives to consider when it comes to refinancing your student loans, and we’ll go over those disadvantages below.

Should You Refinance Now?

Do you have student loan debt at a higher APR than you want to pay?

  • If no: You shouldn’t refinance.
  • If yes: Go to next question.

Do you have good credit or a cosigner? 

  • If no: You shouldn’t refinance.
  • If yes:  Go to next question.

Do you have federal student loans?

  • If no: You can consider refinancing
  • If yes: Go to next question

Are you willing to give up federal protections like deferment, forbearance, and income-driven repayment plans?

  • If no: You shouldn’t refinance
  • If yes: Consider refinancing your loans.

Reasons to Refinance

There are many reasons student borrowers ultimately refinance their student loans, although they can vary from person to person. Here are the main situations where it can make sense to refinance along with the benefits you can expect to receive:

  • Secure a lower monthly payment on your student loans.
    You may want to consider refinancing your student loans if your ultimate goal is reducing your monthly payment so it fits in better with your budget and your goals. A lower interest rate could help you lower your payment each month, but so could extending your repayment timeline.
  • Save money on interest over the long haul.
    If you plan to refinance your loans into a similar repayment timeline with a lower APR, you will definitely save money on interest over the life of your loan.
  • Change up your repayment timeline.
    Most private lenders let you refinance your student loans into a new loan product that lasts 5 to 20 years. If you want to expedite your loan repayment or extend your repayment timeline, private lenders offer that option.
  • Pay down debt faster.
    Also, keep in mind that reducing your interest rate or repayment timeline can help you get out of student loan debt considerably faster. If you’re someone who wants to get out of debt as soon as you can, this is one of the best reasons to refinance with a private lender.

Why You Might Not Want to Refinance Right Now

While the reasons to refinance above are good ones, there are plenty of reasons you may want to pause on your refinancing plans. Here are the most common:

  • You want to wait and see if the federal government will offer 0% APR or forbearance beyond May 2020 due to COVID-19.
    The federal government has only extended forbearance through the middle of May right now, but they might lengthen the timeline of this benefit if you wait it out. Since this perk only applies to federal student loans, you would likely want to keep those loans at 0% APR for as long as the federal government allows.
  • You may want to take advantage of income-driven repayment plans.
    Income-driven repayment plans like Pay As You Earn (PAYE) and Income-Based Repayment let you pay a percentage of your discretionary income each month then have your loans forgiven after 20 to 25 years. These plans only apply to federal student loans, so you shouldn’t refinance with a private lender if you are hoping to sign up.
  • You’re worried you won’t be able to keep up with your student loan payments due to your job or economic conditions.
    Federal student loans come with deferment and forbearance that can buy you time if you’re struggling to make the payments on your student loans. With that in mind, you may not want to give up these protections if you’re unsure about your future and how your finances might be.
  • Your credit score is low and you don’t have a cosigner.
    Finally, you should probably stick with federal student loans if your credit score is poor and you don’t have a cosigner. Federal student loans come with fairly low rates and most don’t require a credit check, so they’re a great deal if your credit is imperfect.

Important Things to Note

Before you move forward with student loan refinancing, there are some details you should know and understand. Here are our top tips and some important factors to keep in mind.

Compare Rates and Loan Terms

Because student loan refinancing is such a competitive industry, shopping around for loans based on their rates and terms can help you find out which lenders are offering the most lucrative refinancing options for someone with your credit profile and income.

We suggest using Credible to shop for student loan refinancing since this loan platform lets you compare offers from multiple lenders in one place. You can even get prequalified for student loan refinancing and “check your rate” without a hard inquiry on your credit score.

Check for Signup Bonuses

Some student loan refinancing companies let you score a bonus of $100 to $750 just for clicking through a specific link to start the process. This money is free money if you’re able to take advantage, and you can still qualify for low rates and fair loan terms that can help you get ahead.

We definitely suggest checking with lenders that offer bonuses provided you can also score the most competitive rates and terms.

Consider Your Personal Eligibility

Also keep your personal eligibility in mind, including factors beyond your credit score. Most applicants who are turned down for student loan refinancing are turned away based on their debt-to-income ratio and not their credit score. Generally speaking, this means they owe too much money on all their debts when you compare their liabilities to their income.

Credible also notes that adding a creditworthy cosigner can improve your chances of prequalifying for a loan. They also state that “many lenders offer cosigner release once borrowers have made a minimum number of on-time payments and can demonstrate they are ready to assume full responsibility for repayment of the loan on their own.”

It’s Not “All or Nothing”

Also, remember that you don’t have to refinance all of your student loans. You can just refinance the loans at the highest interest rates, or any particular loans you believe could benefit from a different repayment term.

4 Steps to Refinance Your Student Loans

Once you’re ready to pull the trigger, there are four simple steps involved in refinancing your student loans.

Step 1: Gather all your loan information.

Before you start the refinancing process, it helps to have all your loan information, including your student loan pay stubs, in one place. This can help you determine the total amount you want to refinance as well as the interest rates and payments you currently have on your loans.

Step 2: Compare lenders and the rates they offer.

From there, take the time to compare lenders in terms of the rates they can offer. You can use this tool to get the process started.

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Step 3: Choose the best loan offer you can qualify for.

Once you’ve filled out basic information, you can choose among multiple loan offers. Make sure to check for signup bonus offers as well as interest rates, loan repayment terms, and interest rates you can qualify for.

Step 4: Complete your loan application.

Once you decide on a lender that offers the best rates and terms, you can move forward with your full student loan refinancing application. Your student loan company will ask for more personal information and details on your existing student loans, which they will combine into your new loan with a new repayment term and monthly payment.

The Bottom Line

Whether it makes sense to refinance your student loans is a huge question that only you can answer after careful thought and consideration. Make sure you weigh all the pros and cons, including what you may be giving up if you’re refinancing federal loans with a private lender.

Refinancing your student loans can make sense if you have a plan to pay them off, but this strategy works best if you create a debt repayment plan you can stick with for the long-term.

The post Should You Refinance Your Student Loans? appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Best startup business credit cards

If you want to start a business, you’re going to need a business credit card. While many entrepreneurs fund the initial phases of their small business out of pocket, taking out a business credit card proves that you mean business – literally.

But which business credit card is right for your growing startup? We’ve got a list of the best startup business credit cards that meet a variety of business needs – whether you’re looking for a travel card to help make business trips a little more comfortable or a corporate card to issue to your new employees. We’ve also got tips on how to choose the best business card for your startup, how to increase your odds of getting accepted for a business credit card and how to make the most of your new card once you’ve got it.

Best credit cards for startups

  • No personal guarantee: Brex Corporate Card for Startups
  • Fair credit: Capital One® Spark® Classic for Business
  • Financing a startup: American Express Blue Business Cash™ Card
  • Cash back: Capital One® Spark® Cash for Business
  • Travel rewards: The Business Platinum Card® from American Express

Brex Corporate Card for Startups

Brex 30 Card

Our rating: 4.4 out of 5
Score required: Excellent
Type of card: Corporate travel
Spending categories: Rideshares, travel, restaurants, software subscriptions

Read full review

  • 8X points on rideshares, 5X on travel, 4X on restaurants, 3X on eligible Apple purchases and 3X on software subscriptions when you make daily card payments. Those rewards are 7X points on rideshares, 4X on travel, 3X on restaurants, 3X on Apple purchases and 2X on software subscriptions with 30-day card payments
  • 1 point per dollar on other purchases
  • 30,000 bonus points upon sign up and waived card fees for life (equal to $300+ value)
  • $5,000 credit for Amazon Web Services and 20% discount on annual Zoom subscription, along with other software discounts in your first year
  • $0 annual fee

Our take: With an application process that makes qualifying faster and easier than usual and a unique rewards program that offers up to 8X points on ride-sharing, the Brex Corporate Card is well-attuned to the needs of startup companies.

Why it’s the best startup business credit card with no personal guarantee

If your startup is at the point where you have a significant revenue stream and an office full of employees, you might be ready for a corporate card. Unlike your typical business credit card, which can be used by small business owners of any size (including solopreneurs and freelancers), corporate cards are designed to meet the needs of growing corporations.

In this case, that means no-cap rewards on four major spending categories – 8X Brex Rewards points on rideshares, 5X on travel, 4X on restaurants and 3X on software subscriptions depending on whether you make your card payments every 30 days or on a daily basis with Brex cash – as well as 1 point per dollar on all other purchases. Your startup will also be eligible for discounts on popular services, such as Amazon Web Services, Zoom and Dropbox, as well as a 30,000-point sign-up bonus.

Plus, it only takes a few minutes to get approved for the Brex Corporate Card. All you need to do is provide basic information about your business and link your corporate account. There’s no personal guarantee required, though you do need a minimum of $100,000 in your corporate bank account to be eligible for this card. The Brex Corporate Card has no annual fee and you’ll get five employee cards at no cost, but it’ll cost you $5 per month for each additional employee card beyond that.

As you use your Brex Corporate Card, your credit activity and payments will be reported to Experian and Dun & Bradstreet, both of which will help your business build its credit history.

Capital One® Spark® Classic for Business

Capital One® Spark® Classic for Business

Our rating: 2.6 out of 5
Score required: Fair to good
Type of card: Cash back
Spending categories: N/A

Read full review

  • 1% cash back on every purchase
  • Build business credit with responsible use
  • $0 annual fee

Our take: The Spark Classic card doesn’t offer the lowest APR or juiciest rewards; but it does help cardholders with damaged credit build a better credit score and earn a modest amount of cash back, so they can qualify for more generous cards over time.

Why it’s the best startup business credit card for fair credit

Your credit score shouldn’t hold you back from small business success – so don’t let your less-than-perfect credit prevent you from taking advantage of all the benefits a small business credit card can provide. Use the Capital One Spark Classic for Business credit card to help you build your business and your credit at the same time.

When you use the Spark Classic for Business, you’ll earn 1 percent cash back on every purchase. That’s a little lower than what you might earn with the top business credit cards, but if you practice responsible credit habits like making on-time payments and maintaining a low credit utilization ratio, your score should improve month-over-month – which means you might be eligible for an even better business credit card before you know it.

The Spark Classic for Business has no annual fee, which is one more reason why it’s a great card for people who want to get their business – and their credit – off the ground.

American Express Blue Business Cash™ Card

American Express Blue Business Cash™ Card

Our rating: 3.9 out of 5
Score required: Good to excellent
Type of card: Cash back
Spending categories: N/A

Read full review

  • 2% cash back on up to $50,000 in purchases per calendar year
  • 1% cash back on all purchases after that
  • 0% introductory APR on new purchases for the first 12 months (13.24-19.24% variable thereafter)
  • Spend over your credit limit with no penalty (as long as you stay within the over-the-limit amount)
  • Apply for 30-, 60- or 90-day Working Capital terms after first 6 months of membership
  • $0 annual fee

Our take: The Blue Business Cash card is a great option for small business owners seeking to create cash flow for a new or expanding business, thanks to its flexible credit limit and working capital terms.

Why it’s the best startup business credit card for large purchases

Startups often come with startup costs – which means you’re going to want a credit card that rewards big spending. The American Express Blue Business Cash Card is one of the top business cash back cards on the market, offering 2 percent cash back on up to $50,000 in purchases per calendar year and 1 percent cash back on all additional purchases.

This isn’t the only reason why you’ll want to use the Blue Business Cash Card to help you finance your startup costs. You’ll also get access to a flexible credit limit, making it possible to fund extra purchases during those months when you really need to invest in your business. (Be aware that you’ll need to cover both your minimum payment and your above-limit spending at the end of your billing cycle.) Plus, once you’ve had your Blue Business Cash Card for six months, you’ll be able to apply for working capital terms, a feature in which Amex will pay your vendors up front, and you’ll pay off the costs in 30, 60 or 90 days.

Capital One® Spark® Cash for Business

Capital One® Spark® Cash for Business

Our rating: 4.1 out of 5
Score required: Good to excellent
Type of card: Cash back
Spending categories: N/A

Read full review

  • 2% cash back on every purchase
  • $500 cash back if you spend $4,500 in first 3 months
  • $95 annual fee (waived first year)

Our take: If you want a simple business credit card with a superb cash-back rate, you will love the Spark Cash card.

Why it’s the best startup business credit card for cash back

If you want to earn as much cash back on your purchases as possible, consider the Capital One Spark Cash for Business card. Like the Blue Business Cash Card, the Spark Cash for Business offers 2% cash back – but unlike the Blue Business Cash Card, those cash back rewards don’t end once you spend $50K in a calendar year. Instead, you get an unlimited 2% cash back on every purchase.

You also get a welcome bonus – if you spend $4,500 in your first three months as a cardholder, you’ll earn a one-time $500 cash bonus. Just think about how you could use that money to grow your business (or to pay off your credit card balance).

The Spark Cash for Business credit card does include a $95 annual fee, but it’s waived the first year – and don’t forget that business credit card fees are tax-deductible.

The Business Platinum Card® from American Express

The Business Platinum Card® from American Express

Our rating: 4.4 out of 5
Score required: Excellent
Type of card: Travel
Spending categories: Flights, hotels

Read full review

  • 5X points on flights and prepaid hotels on amextravel.com
  • 2X points on travel purchases on amextravel.com
  • 1 point per dollar on other purchases
  • 50% more points (1.5 points per dollar) on purchases of $5,000 or more (up to 1 million bonus points per year)
  • 85,000 points if you spend $15,000 in first 3 months
  • Get 35% points back on a designated airline each year (up to 500,000 bonus points per year) when you pay with points and book your flight on amextravel.com
  • $595 annual fee

Our take: The Business Platinum Card from American Express offers generous bonus points and great travel perks – including the best lounge access around – for frequent business travelers.

Why it’s the best startup business credit card for travel

If your startup requires you to spend a lot of time working out of hotel rooms, you’re going to want a credit card that rewards travel spending. The Business Platinum Card for American Express is ready to help get you where you need to go.

Earn 5X Membership Rewards points per dollar when you purchase flights and prepaid hotel rooms through amextravel.com, 2X points on additional travel purchases made through amextravel.com and 1 point per dollar on all other purchases – unless you make a purchase of $5,000 or more, at which point you’ll earn 1.5 points per dollar. You’ll also be able to access an incredible welcome bonus in your first three months of membership: 85,000 points after you spend $15,000 on qualifying purchases.

Want to maximize those Membership Rewards points after you’ve earned them? We’ve got a guide to help you get started, but here’s one tip: Use Membership Rewards Pay with Points to book a flight with your selected qualifying airline, and you can get 35 percent of your points back (for up to 500,000 bonus points per calendar year).

The Business Platinum credit card also gets you access to the American Express Global Lounge Collection, a year of complimentary Platinum Global Access from WeWork (for cardholders who enroll between Feb. 15 and Dec. 31, 2019) and a $200 airline fee credit, among other perks. Be prepared to pay a $595 annual fee for the privilege of using this card – but if you travel often enough, it’ll be more than worth it.

Compare top startup business credit cards

Rewards Annual fee
Brex 30 Card
  • 7X points on rideshares, 4x on travel, 3x on restaurants and 2x on software subscriptions
  • 1 point per dollar on other purchases
  • 30,000 bonus points upon sign up
$0
Capital One® Spark® Classic for Business
  • 1% cash back on every purchase
$0
American Express Blue Business Cash™ Card
  • 2% cash back on up to $50,000 in purchases per calendar year
  • 1% cash back on all purchases after that
$0
Capital One® Spark® Cash for Business
  • 2% cash back on every purchase
  • $500 cash back if you spend $4,500 in first 3 months
$95 (waived first year)
The Business Platinum Card® from American Express
  • 5X points on flights and prepaid hotels on amextravel.com
  • 2X points on travel purchases on amextravel.com
  • 1.5X points on eligible purchases over $5,000
  • 1 point per dollar on other purchases
  • 85,000 points if you spend $15,000 in first 3 months
$595

How to choose a business credit card

Ask these questions before choosing which business credit card might be best for your growing startup:

How will you use the card?

If you’re going to use your business credit card to finance a large purchase, look for a card with a long 0% introductory APR period. That way, you can maximize the time you have to pay off your purchase without paying anything extra in interest. 

If you’re just going to use it for day-to-day expenses, think about what those expenses are. Look for a card that will reward your everyday purchases – like travel, office supplies or utilities – at a boosted rate.

Lastly, think about who will be using the card. If you want your employees to be authorized users, look for a card that offers free employee cards or custom spending limits. 

What kind of rewards do you want?

Are you hoping to earn some cash back on your everyday purchases, or are you shooting for rewards-funded travel? If you’re searching for a travel rewards card, it’s important to consider additional perks and benefits, like rental car insurance and airport lounge access.

What is your credit score?

Your personal credit will probably be pulled when you apply for a business credit card. If your score isn’t great, apply for a card that’s within your range. Otherwise, it’s a good idea to work on building your credit before you apply. 

Getting a line of credit in your business’s name can also be useful if you’re going to take out a business loan in the near future. Your business has a credit score too, and a positive borrowing history can contribute to a good business credit score, giving you a lower interest rate when you apply for business loans. If that’s important to you, make sure that the card you’re applying for reports to at least one – or all three – of the dominant business credit bureaus. 

How to apply and get approved for a business credit card

Applying for a business credit card is a lot like applying for a personal credit card. You’ll need to provide basic personal information, such as your name, address and income. You’ll also need to provide basic business information, such as your business’s name, address and revenue. Once you’ve filled out the application, expect a hard pull on your credit as the credit card issuer determines whether you are eligible for the card.

If you want to increase your odds of getting approved, here are a few tips:

  • Check your credit score to learn where you stand. If you don’t already have access to your credit score, use a free service to learn whether your credit is fair, good, excellent or needs work – and then use that information to find credit cards designed for people with your credit score.
  • Build your personal credit score before applying for a business credit card. Lenders check your personal credit history before issuing business credit cards, so consider doing some basic maintenance on your credit score before applying. Disputing errors on your credit report, paying off revolving balances and requesting credit limit increases can all improve your score and make you eligible for more business credit cards.
  • Use our CardMatch service to quickly identify which credit cards might be right for you. There’s no impact on your credit score, and you might receive special offers and pre-qualified matches.

Pros and cons of using a credit card for your startup

There are a lot of advantages (as well as some disadvantages) to using a credit card to help fund your startup:

Pros

  • Credit card financing is easily obtainable if you already have good credit and credit cards in your name.
  • You can cover business expenses during periods of low cash flow or finance a large purchase that will help you attract more customers and grow your revenue.
  • You can also use earn rewards on everyday expenses or earn points that you can put towards business travel – both of which can save your business money in the long run.
  • With timely payments, you can use a business credit card to build a credit history for your new business.
  • You can use credit card purchase and travel protections to insure purchases for your business.
  • Many business cards offer valuable perks for small business owners, such as airport lounge access, discounts on business purchases or credits toward commonly purchased items.
  • Credit cards can make expense tracking easier – many cards allow you and your employees to upload and track your receipts from your mobile phone and to download your expenses to Quickbooks and other accounting software.
  • You can automate repeating purchases, such as software licenses.

Cons

  • For financing a business, a small business loan might offer lower interest rates than a business credit card.
  • Likewise, using crowdfunding to get seed money (and customer buy-in) before launching a new product might be a better option than putting all your expenses on credit.
  • If the card requires a personal guarantee, your business credit card could affect your personal credit score.
  • Credit cards have high interest rates. Unless your business card comes with a 0 percent offer for new purchases, it can be very expensive to carry a balance on it.
  • Credit cards can foster sloppy financial habits if you’re not disciplined about paying off your balance each month.
  • Overall, since they’re usually linked to your personal credit history and charge high interest, credit cards can be a very risky means of funding a startup.

See related: Should you fund your startup business with a credit card?

Final thoughts

Getting a business credit card is an important part of growing a small business. For many small business owners, it’s one of the first big steps in separating your personal finances from your business finances. When it’s time to apply for a business card for your startup, think about which problems you’d like your business credit card to solve – and then look for cards that provide the solution you’re looking for. Think of it like writing a job description and finding the candidate that’s the best fit.

As your startup continues to grow, start thinking beyond business credit cards. The next step might be a small business loan, a crowdfunding project or a group of investors. Business credit cards are excellent tools to help you cover day-to-day expenses while earning rewards, but they aren’t the only way to finance a startup – and you’ll know when it’s time to start exploring other options.

Source: creditcards.com

Why You Should Not Buy a Credit Privacy Number (CPN)

What Is a CPN, or Credit Privacy Number?

If you’re looking to repair your credit, you may have come across websites that advertise a credit privacy number, credit protection number or CPN. These numbers are nine digits like a Social Security number (SSN), and sellers claim that you can use them instead of your SSN. However, these CPNs are often actual SSNs lifted from real people, reportedly children, prison inmates and the deceased – and you can never legally buy a new SSN. In other words, a CPN is no solution to your credit rating problem. Under no circumstances should you try to buy a CPN.

Why a CPN is No Credit Fix

Websites have sprung up all over the internet, offering CPNs to people with bad credit or low credit scores. They advertise that this number can serve as a “get out of jail free” card for your bad credit. In theory, you can use a CPN instead of your SSN on credit applications to hide the poor credit associated with your personal SSN. If you have bad credit but still need a credit card or loan, this can seem like the solution, assuming you can pay anywhere from hundreds to thousands of dollars.

That price might seem worth it for a chance to wipe the slate clean. However, these offers are essentially a big scam. The CPNs you can buy online are not legally assigned credit protection numbers. Instead, they are usually stolen Social Security numbers, taken from children, the deceased or inmates.

Also, using a purchased CPN puts you in some hot water, too. Credit agencies can easily spot discrepancies if you try to use a CPN on an application instead of your SSN. Not only will this fail to help your credit, but it’s also committing fraud which is punishable by jail time.

How to Avoid CPN Scams 

What Is a CPN, or Credit Privacy Number?

If you’re dealing with some bad credit, don’t turn to a CPN. Only scammers sell CPNs, and they in turn may cheat you out of your personal information as well as hundreds or thousands of dollars. Using a purchased CPN can also put you in jail, even if you didn’t know the number was fraudulent. This is why it’s important to be aware of this popular scam.

If you really need a CPN or new SSN, it will be free. The process will go through the Social Security Administration Office, since a new number would be tied to your old SSN. That said, it is very hard to qualify to receive a new number. Having bad credit is never a qualifying reason.

How to Get a Legal CPN

With so many fraudulent websites and companies trying to sell you a way to reset your credit, it’s hard to know how to get a legal CPN. Unfortunately, there’s a lot of misinformation out there. Some experts say that you can speak with an attorney to obtain a legal CPN. The attorney can then contact the Social Security Administration Office on your behalf. However, others maintain that all CPNs are illegal.

Generally, it seems that you cannot get a legal CPN unless you actually need one. These situations include celebrities, government officials and people under witness protection. You can also apply in other specific instances, like if you’re a victim of abuse, stalking or identity theft. A real CPN would be attached to your SSN, so it’s still not an escape from the credit tied to your SSN.

You may also stumble upon offers to obtain an EIN, or Employer Identification Number. The IRS does issue EINs, but only businesses can use them for business costs. This means that you cannot legally obtain an EIN as an individual looking to improve your credit. You also cannot make up a home business, apply for an EIN and use that new number for a credit reset. It is a federal crime to obtain an EIN under false pretenses. In any case, the credit profile for your EIN is still tied to your SSN.

Bottom Line

What Is a CPN, or Credit Privacy Number?

You shouldn’t ever, under any circumstances, try to purchase a CPN. These offers are fraudulent and don’t provide any credit repair or relief. At the very least, buying a CPN wastes money you should put towards repaying your loans in the first place. At worst, you could go to jail for fraud. There are better, more constructive ways to repair your credit. If you’re truly in a situation that calls for a CPN, contact your lawyer for assistance.

Tips on Rebuilding Your Credit 

  • Of course, the best way to legally clean up your credit is to pay back your debts and improve your credit practices. A good place to start is to pay off your credit card debt with the highest interest.
  • Sometimes you’ll just have to wait for your bad history to fall off your record. Generally, negative info stays on your credit report for seven years. If you can’t get a debt collection removed from your credit report, for example, it’ll stay there for seven years. However, as time goes on, the toll it takes on your report lessens.
  • Don’t go it alone. If you have a good income, but you’re just bad at managing your money, a financial advisor can help. With guidance, you can make smarter choices – and even start growing your wealth. To find an advisor, use our free, no-obligation matching tool. It will connect you with up to three advisors in your area.

Photo credit: Â©iStock.com/becon, Â©iStock.com/Xesai, Â©iStock.com/Kerkez

The post Why You Should Not Buy a Credit Privacy Number (CPN) appeared first on SmartAsset Blog.

Source: smartasset.com

5 Savvy Money Moves to Make This Year

A young couple sits in bed on a laptop discussing savvy money moves.

The following is a guest post from The Savvy Couple.

As much as we don’t like to admit it, money is a very important tool that can be used to better our lives.

So why don’t we take better care of managing it?

Luckily, there are some savvy money moves that you can make this year to improve your finances and feel more financial peace. This year can be a great one, and you can use your money to help make it happen.

We have narrowed down our top five money moves that you can make this year that will have a huge impact on your overall finance. The best part is they are not complicated and they won’t take a lot of time to implement. In fact, you can start to put them in place right after reading to the end of this article.

1. Create a Money Plan and Stick to it

It’s really important to create a plan, or budget, for your money. If you don’t, then you could find your money just escaping and not having a clue where it’s gone.

A lot of people think that a budget is strict, and something that you use for just your bills. But a good budget will be a plan for your money for the month and how it is going to be spent. Your budget should reflect the direction that you want your life to take.

It should enable you to spend more money on the things you love and cut wasteful spending on the things you don’t.

It doesn’t have to be super strict either—we advise “paying yourself first.” Meaning put your money where it’s most important first (investing, savings, fun money), and then using the rest of the money to pay your bills.

Think about what your goals are for your life and base your budget around that. You have a set amount of income, and you can decide where you want that money to go.

2. Cut Your Monthly Expenses

One step toward creating the money plan that you want can be cutting your monthly expenses. This doesn’t mean that you need to be drastic with the expenses that you are cutting out.

When it comes to creating your money plan, it’s important to look at what you are currently spending money on.

If you have never tracked your expenses before, you will likely be surprised to see where your money is going. We like to think that we have a good idea of what we are spending, but if you are not tracking your spending then you are most likely vastly underestimating your spending.

Go back through your spending and highlight any problem areas. The important thing here is to not beat yourself up for anything that you’ve spent.

When you have created the plan for your money, you may find that you have been spending on things that don’t fit in with that plan. These could be the ones that you choose to cut down on.

Cut down on your expenses slowly. Otherwise, you could find that it’s too much of a change and you want to go back to how you were spending before. Try picking one thing to cut down on, and do a bit of trial and error.

3. Stay Away from Debt

We’ve been talking about creating a money plan for your life, but there are some things that can throw your plan off track—debt being one of them.

Sometimes, debt is unavoidable. There are situations that we find ourselves in such as medical emergencies, car repairs, or any kind of emergency really!

The best thing to do is to prepare for these kinds of situations. We can’t fully plan, of course, but we can set aside some money to prepare. These are usually referred to as emergency funds. We recommend saving a $1,000 emergency fund as soon as possible, then slowing building that up to 3–6 months of living expenses after your debt is paid off.

Debt is so normalized in society, but debt doesn’t have to be! Making savvy money moves and trying to prepare for future emergencies will help tremendously in the long run.

4. Understand How Your Credit Score Works

Let’s be honest—a lot of us don’t pay much attention to our credit score. It’s one of those boring things that we don’t think about until we need it.

The last thing that you want to happen is to find that you need to take out credit but you can’t because of your credit score. Therefore, it’s a savvy money move to understand how your credit score works.

Credit scores are generally used by lenders when you want to take out a line of credit with them—for example, when you are getting a mortgage or car loan. If you have a high credit score then you will have access to better rates and terms for your loans.

Your credit score is largely determined by whether you pay your bills on time, as any missed payments will go against you. Your score is also determined by how much credit you have used compared to the amount that you have been lent.

It’s essential that you check your credit report as there can be errors on there which you can rectify—the sooner the better. The longer you wait to repair your credit, the harder it can become.

You can get your Experian VantageScore 3.0 for free from Credit.com when you sign up for the free Credit Report Card. And if you want more details on your credit score, sign up for ExtraCredit. You’ll get 28 FICO® scores and your credit reports from all three major credit bureaus.

Try ExtraCredit Today

5. Start an Online Side Hustle

We are huge fans of starting side hustles because at the end of the day you can only cut your expenses so much. But your income has unlimited potential.

Side hustles are great because you can create an income stream for your goals, or even use it to leave your day job.

The benefit of starting an online side hustle is that there are so many possibilities, you pretty much only need to have access to the internet.

It’s worth brainstorming some side hustle ideas that you have an interest in doing. It’s also worth thinking about ideas that will be free or have a very low cost to start up. The last thing that you want to do is spend a lot of money on something that’s not going to take off.

You can determine how much time and effort you want to put into your side hustle—it doesn’t have to be a brand-new business, but can be getting an extra job or something small.

Some of our favorite side hustle ideas include:

  • Starting a blog
  • Proofreading
  • Facebook advertising for businesses
  • Teaching English online
  • Freelance writing

Savvy Money Moves throughout the Year

If you want to make some good money moves this year, this is a good place to start. These are some simple things that anyone can do to improve their finances greatly.

What are your best savvy money moves? Let us know in the comments!


Kelan and Brittany Kline are the creators and co-founders of The Savvy Couple. They write about personal finance, budgeting, making money online, entrepreneurship, and more.

The post 5 Savvy Money Moves to Make This Year appeared first on Credit.com.

Source: credit.com

Tips And Services To Help Your Bookkeeping Go Paperless

The COVID-19 pandemic wasn’t a catalyst to shift businesses toward digital transformation, it merely sped up the process. Businesses needed to scramble to move much of their operations online so workers could efficiently collaborate with each other and maintain business continuity during a difficult time.

Fortunately, departments not traditionally associated with the digital universe, like Bookkeeping, had an easier time adapting thanks to online services like Bookstime.com, a provider of digital bookkeeping tools with unique experience in difficult areas like sales tax automation, health benefits administration, and more.

Advantages of digital bookkeeping

Keeping track of every business transaction is among the most important and perhaps underappreciated tasks. Failure to keep track of transactions in a professional manner can result in a business owner making wrong decisions because they have inaccurate information.

Even worse, they might think they end the year with a profit but in reality, a bunch of small bookkeeping mistakes over several months means the business owner really lost money.

A shift to a digital platform eliminates these concerns. Online digital platforms make use of the most up-to-date accounting automation software that erases nearly every careless mistake. This is especially useful for a business owner who does the tedious but necessary job of bookkeeping themselves to save money. The more time a business owner spends on ancillary tasks, the less time they have to generate revenue and keep clients happy.

Some of the other advantages associated with going online include:

  • Eliminating clutter: keeping a clean home office is challenging enough but a digital platform means more space for higher priority files.
  • Save time: A digital bookkeeping platform is always available online with a few short clicks of the mouse. It can be accessed as needed and when needed in a few short seconds.
  • Environmental benefits: It isn’t unusual for a company to use at least 10,000 sheets of paper each year. Shifting resources online may seem like a small benefit but everyone has a responsibility to do a little bit more to protect our environment.

Case in point: Fill in a W-4

Every business owner is happy to hire new workers because it means they are expected to provide value to the company above and beyond their salary. But that doesn’t mean that the formal process is enjoyable.

One of the more undesirable parts of the hiring process is the pesky W-4 form that every employer has to ensure is properly filled in before a worker’s first day. Simply put, the W-4 form confirms how much income tax a worker wants to have withheld from their recurring paychecks. Under-withholding taxes means a worker will likely experience a shock come tax season as they owe money to the government. Over-withholding taxes means a worker is paying the government too much money and has to wait for a refund.

Digital bookkeeping can help simplify this process so you're less prone to errors. When other people’s finances are at stake, small careless mistakes could impact a worker’s desire to give the business owner 100% of their focus.

Businesses that shifted their bookkeeping process online to better navigate through the pandemic quickly realized this was a move that should have been done years ago. The advantages of having access to a clean and organized online tool far outweigh the costs.

Source: quickanddirtytips.com

5 Tips for Building a Side Business

You’ve probably noticed that people are embracing entrepreneurship like never before. Due to the widespread availability of technological business tools, there’s never been a better time to become your own boss. With an internet connection and a smart-phone or laptop, you can work from just about anywhere on the planet.

If you’ve been dreaming of quitting your day job to start a business, you might be wondering if taking such a big leap is worth it.

While there’s nothing wrong with holding down a W-2 job and getting a steady paycheck, having income from your own business comes with many upsides. But if you’ve been dreaming of quitting your day job to start a business, you might be wondering if taking such a big leap is worth it.

The good news is that there are incremental ways to become self-employed that are stable and reduce your risk, instead of plunging abruptly into a precarious financial position. In this chapter excerpt from Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers, you’ll learn practical strategies for building a solo business while keeping the security of a regular job.

Tips for building a business on the side

Becoming your own boss may seem glamorous from the outside, but it can have stressful pitfalls, such as little pay, no insurance benefits, and unpredictable clients. However, you can avoid or minimize some of the downsides by maintaining a reliable day job while you grow your solo business.

Having the security of a job and the excitement of becoming a solopreneur gives you lots of upside with much less risk. A steady paycheck may give you the confidence you need to take business risks—such as buying more advertising, equipment, or software—that will make your venture more profitable.

Having the security of a job and the excitement of becoming a solopreneur gives you lots of upside with much less risk.

Aside from maintaining a reliable income stream, being both an employee and an entrepreneur can make you a better worker. In my experience, growing a side business also builds skills and experiences that make you more effective at your regular job. You may even find your side hustle revives an appreciation for your day job. There’s a lot to like about having a salary, benefits, and other perks, after all.

Whether you decide to be both an employee and your own boss for weeks or years, it will take some juggling to manage successfully. Here are five tips to face your career fears responsibly and prepare for the future by adding entrepreneurship to your resume on the side.

Define your vision for success

Before changing your job or making the transition from employee to self-employed solopreneur, take the time to define what you truly want to achieve in your career. Sometimes your ideas about success come from other people, and they can cause you to follow a career path that never truly fulfills you.

Maybe your boss thinks you should regularly work late so you can climb the corporate ladder, or a parent says you should go to graduate school. You might take a lucrative job in a field you’re not crazy about because that’s what your friends are doing. But if that job requires frequent travel when all you truly want is to start a family, care for aging parents, or spend time enjoying where you live, you’ll never be happy.

Never let external markers of success, such as a big paycheck or a fancy job title, become more important than your heartfelt calling and goals for your life.

If you don’t pause periodically to reflect on what success means to you, it becomes easier to follow other people’s priorities when it comes to your work. If your decisions aren’t purposefully leading you toward a life that excites you, you’ll likely wander away from what you genuinely want.

Never let external markers of success, such as a big paycheck or a fancy job title, become more important than your heartfelt calling and goals for your life.

That said, getting in touch with your real desires isn’t always easy, and you might have to listen carefully to hear your inner voice. Try incorporating some quiet time into your daily routine. When you first wake up or when you’re settling down at bedtime, think about what you’re grateful for—but also what you’d like your life to be. Consider your definition of success and any changes you’d like to make to your life in the near and distant future.

Ask yourself the following questions to better understand your values and get clarity on your unique vision for success:

  • What type of work makes me happiest? 
  • Where do I want to live? 
  • What types of people do I want in my work life?
  • What does a good life mean to me?

This exercise isn’t something you do once to figure out the arc of your entire life. You need to come back to these fundamental questions during different seasons of your life and career, because the answers may change, sometimes repeatedly.

Over time, your working life is sure to change, in both good and bad ways. When you find yourself getting restless or feeling like you want more from your job, slow down and become more introspective. It can reveal a lot about what your next career or business move should be.

RELATED: How to Create Your Own Self-Employed Benefits Package 

Create a side gig

Even when you’re clear about what you want, one of the fastest ways to ruin your financial future is to take a flying leap from a steady paycheck. Jumping from a day job into an uncertain, full-time venture too early could mean trouble. You might face significant financial struggles and even get into debt. Many businesses take years of hard work before they’re profitable enough to support you.

If you slowly add entrepreneurial experience to your career, you’re likely to gain a variety of skills that will make you more valuable to employers.

Hanging on to your day job gives you the financial security you need to try out new business ideas, especially if you have a spouse, partner, or kids who depend on your income.

The best side gigs combine work that you’re excited about with something that you’re uniquely positioned to provide. These businesses may also come with a large existing customer base or appeal to customers who are willing to pay you well for the skills and experience you offer.

I was a part-time entrepreneur for a decade before I said goodbye to my employer. I enjoyed having a mix of job stability and entrepreneurial upside. Plus, I found that expanding my career by adding self-employment to a W-2 job made me much better at both.

If you slowly add entrepreneurial experience to your career, you’re likely to gain a variety of skills that will make you more valuable to employers. It may be easier to experiment with business-formation ideas when you have less financial stress or know a side gig could actually complement your existing career.

The bottom line is that creating a business on the side protects your income, diversifies your network, and improves your skills, instead of leaving you financially vulnerable. If you enjoy your entrepreneurial work and find that it pairs well with your day job, the benefits and personal growth can really pay off.

Negotiate your job flexibility

If you plan to start a business on the side, or you already have, you know you’ll be working more, perhaps a lot more. You might need to work early in the morning, late at night, or on weekends to fit it all in. That could stress your relationships or cause you to burn out if you don’t take some precautions.

Consider some different ways that you can tailor your business for your day job, and vice versa.

Once you’re confident about your business idea or begin seeing increasing revenues, you may find that you need more flexibility in your schedule. At that point, consider some different ways that you can tailor your business for your day job, and vice versa.

In 2008, my employer began feeling the financial pinch of the Great Recession. My podcasting and blogging career had started to take off by that point, so instead of allowing my position to get downsized, I proposed a solution that my boss liked. I’d work four days a week for a couple of months and then go down to three days a week for the rest of the year. Then we’d reevaluate where the company stood and discuss whether he could still afford to keep me on as an employee.

My employer would save money by paying me less, and I’d have more time to work on creating content, partnering with brands, and writing my first book, while still having a regular paycheck coming in. If I hadn’t suggested that solution, my company wouldn’t have known that I was willing to cut my hours. I didn’t offer to tell my boss what my plans were for my newfound free time, and he didn’t ask.

You may be able to negotiate with your employer for more schedule flexibility.

You too may be able to negotiate with your employer for more flexibility. You might ask to work fewer hours, to maintain the same total number of hours but work fewer days per week, or to work from home a day or two each week.

If you have a long commute or spend a significant amount of time getting ready, packing a lunch, and getting out the door in the morning, working remotely could save a lot more time than you think. Then you can invest that saved time in your side business.

Find more time in your day

If you can’t get more flexibility or you worry that even asking for it could put your day job in jeopardy, there are other options. One is to structure non-negotiable time for your business into your day. For instance, make a rule that you’ll step away from your desk for a solid hour (or longer if possible) during lunch to accomplish something meaningful for your business.

Find a nearby cafe or reserve a conference room in your office where you can work and eat undisturbed. I did that for many years, and it’s incredible how much you can accomplish in 45 minutes if you truly focus. If you can’t find enough quiet or privacy in your office, you could even work in your car.

It’s incredible how much you can accomplish in 45 minutes if you truly focus.

If working on your business during your lunch hour isn’t possible with your day job, consider coming to the office an hour earlier or staying later. You could also work on your business in a nearby coffee shop or a co-working space (where drop-in memberships can often be had for the same price as joining a gym) before or after your job. The idea is to create a routine that builds in regular time to focus entirely on your venture and to complete essential tasks.

Another option is to outsource a portion of your work. If you can afford to delegate tasks to freelancers, that can help you balance your to-do lists.

When your day job is so unpredictable that it prevents you from working on your side gig for long periods, consider getting a different job with a more reliable schedule. If you’re truly committed to getting your business off the ground, you may need a position with more flexibility so you can do both more easily.

Have a solid exit strategy

Having an exit strategy is a common concept in the business world. Partners and investors want to know what will happen after clearly defined milestones are reached, such as taking a company public or selling it after a certain profit margin is achieved.

But employees should create exit strategies, too. It’s a great way to force yourself to think about the future and what you would or should do next. With a W-2 job, you never know what’s around the corner.

It’s wise to start every professional relationship with an idea of how it could end.

Your company could suddenly downsize after a merger or an unexpected loss of market share. Your department could be reorganized after new leadership begins. All these scenarios have happened to me at some point in my career.

It’s wise to start every professional relationship with an idea of how it could end. This ensures that you’re never caught entirely off-guard. Knowing that you’ve thought about the end of a job or a business partnership can make you feel more secure about a potential split.

If you’re unprepared for an interruption in work or business income, it can be devastating to your emotional and financial life. So whether you’re laid off or you voluntarily quit, prepare for it now.

If you have a financial runway to find new opportunities or you’ve built an income from a side business, quitting or getting fired can be a positive experience. Having a good exit strategy can make the difference between feeling crushed by a job loss or becoming empowered by it.

Source: quickanddirtytips.com