What’s The Fastest Way to Increase My Credit Score?

What's The Fastest Way to Increase My Credit Score?Credit scores – they’re basically report cards for adults. And for better or worse, your credit score dictates your creditworthiness. Banks, insurance companies, and private lenders will all use your credit score for determining whether or not you qualify for a loan. As you may already know, the higher your three-digit grade – which ranges from 300 to 850 – the better. Below, we’ll briefly talk about what qualifies as a good score, as well as teach you the fastest ways for bringing your credit score back to a respectable number.

What is a “Good” Credit Score?

At 751 or higher, you can expect to receive extremely competitive low-interest rates from lenders. Anything between 711 and 750, and you’re still looking at pretty low interest rates. A credit score of 651 to 710 qualifies you for moderate interest rates, while anything from 581 to 650 qualifies you for high interest rates.

Anything less than 580, and there’s a good chance that you’ll A) Be denied the loan, or B) You’ll receive the very highest interest rates legally allowed in the United States. If you can keep your credit score at a minimum of 711, then you’ll not only qualify for higher loans, but you’ll also pay far less in interest on them.

Dispute Errors

First and foremost, start by disputing errors through TransUnion, Experian, or Equifax. Mistakes happen, and if you can fix these foul-ups early, it’s definitely going to help you increase your credit score fast.

Negotiate

There’s no denying that when you got laid off last year, you may have had to stop paying your credit card bill. But there is a possibility that a creditor can “erase” any debt that went to collection. The catch? You will have to pay the balance in full on the spot. Make sure that your creditor agrees to this in writing before you make the payment. Otherwise, yes, you’ll be paying off your debt but it’s not necessarily going to increase your credit score.

Get a Credit Card

You’re probably thinking, “Wait a minute! Credit cards are what got me into this mess. Won’t getting another just makes thing worse?” It’s certainly possible, but it’s also the fastest way to increase your credit score. Just remember: don’t charge too much and always pay your bills on time. In other words, just be responsible.

Having trouble getting a traditional card due to a low credit score? Try a secured credit card instead. With a secured credit card, you pay upfront. So if you pay $200, and you now have a secured credit card with $200 on it. Think of it like a pre-paid debit card, except the main difference is that it has to potential to help (or hurt) your credit score. With these, the same advice applies: don’t max it out and make your monthly payments on time.

Increase Your Credit Limit

Be very careful with this one. It only works if you trust yourself to not overspend your new line of credit. Basically, just call your creditor and ask for an increase in your limit (i.e. making your credit card good for up to $5,000). The reason this tip works is because it lowers your debt-to-credit ratio (assuming that you don’t spend any more than you’ve normally been spending).

Conclusion

There’s no magic formula that’s going to increase your credit score overnight. The most important thing is that you stay persistent on these strategies and trust that they’ll work. While it’s impossible to say exactly when you’ll be back at a reasonable credit score, know that you can be back in the mid-600s within a year or two if you work hard, avoid taking on more debt, and follow the strategies above.

Salary vs Commission: Which Do You Prefer?

Salary vs Commission: Which Do You Prefer?Everyone’s job situation is different. Some people are paid hourly, others a flat rate for the year, and others on commission. There are advantages and disadvantages to each payment system, and it definitely takes some getting used to when changing from one system to another.

Here are the pros and cons for the 3 most popular compensation structures:

Hourly

Pros: It’s very easy to see that the more you work, the more you earn. If you are a hard worker, you have the potential to earn even more money for working overtime, which is often at a rate of 1.5 times the normal rate.

Cons: There is very little stability. Also, if you are sick or need a vacation day, you may feel guilty and go to work when you shouldn’t.

Salary

Pros: There is more stability here and it’s easy to know exactly how much you’ll make every pay period. You are likely entitled to benefits, which can help you take off work without having to worry about making less money.

Cons: There is not much ability to increase earnings since performance reviews are often once a year. Also, you may have to work more than 40 hours a week without being compensated for it.

Commission

Pros: The better you are at your job, the more you will get paid. There is no limit to how much you can earn.

Cons: You can never be sure how much money you will make in a given month, which makes planning difficult. Sometimes, factors outside of your control will determine if you have a good or bad month.

Throughout high school, I worked summer jobs, all of which paid me hourly. The more I worked, the more I got paid. So when I wanted to leave my job picking fruits and vegetables on a local farm at noon, it meant that I wouldn’t be making money during the afternoon.

After college, my first job was a set salary for the year. There was definitely a sense of security which I appreciated.

Now, my compensation consists of a base salary in addition to commission based on a percentage of sales. There’s no limit to how much I can make, which I like. I am able to motivate myself because I know that the harder I work, the better I will do, and the more I will earn.

What payment structure do you have? Do you like it? Which is your favorite?

Updated August 23, 2015 and originally published March 26, 2012.

Before You Buy Your Dream Vacation Home…

Property ownership has been a tried and true investment strategy for many years now – open any investment guru’s book and the advice to buy an investment property will certainly appear there. Combining your investment property and a vacation home seems to be a match made in heaven – after all, you get to save money on accommodation while on vacation and get to derive an income from the property the rest of the time. You also stand to make a packet of money when you sell the home later.

But before you rush off to Lend Lease home builders in Melbourne to get started on building your dream vacation home, there are some things that you need to consider.

How Much Time Will You Spend There?

Are you going to spend every annual vacation there for a long time to come? How many times are you going to actually be able to get away to stay there? Who looks after the house for the rest of the year? Then, we have the next dilemma, what if it makes more sense to you to rent the place out rather than staying there on holiday? You might end up needing to take your vacation in the off-season and this may not be a pleasant situation for you.

The Cost of Running Two Homes

This is something that one usually forgets about, especially when it comes to an investment property but when there are two properties, there are two lots of expenses in terms of property taxes, maintenance, mortgages, etc.

Now ideally speaking, the rental income that you derive from the property should cover the costs for that property but what if it doesn’t? What if you end up with a dead beat tenant, or you cannot rent the house out?

Getting Tenants

If this is a vacation home that you plan to use yourself, even if it is only for two weeks out of the year, you are committing to short-term leases rather than long-term ones. After all, what long-term tenant will obligingly let you crash on the couch when it is time for your vacation? And if you get a series of short-term tenants, you could be looking at additional charges in terms of cleaning and fixing the place up between tenants.

Maintenance

Maintenance is something that most of us tend to forget about and it is something that we might allow to slide a little in our own homes. After all, we can put up with that window that sticks in our own homes. Again, you will need to consider the tenants – they won’t put up with you neglecting to maintain the home for long.

And whereas at your home it is easy to oversee the repairs or possibly do them yourself, if your vacation home is in a different town, you are going to need to hire someone to do the necessary repairs. This could end up proving costly for you.

What About the Off-Season?

Think of the area that you are considering buying your home in. There will be a busy season and an off-season. Whilst you can reduce rental costs during the off-season to encourage tenants, is anyone going to want to come off-season?

Let’s say that you buy a beach house – will people want to go there in the middle of winter?

Managing the Property

Because you will not be onsite, you will need to hire an agent to oversee the property and collect rentals, etc. This all adds to the cost.

At the end of the day, owning your own vacation property could really round out your investment portfolio nicely but you really do need to do your homework before jumping in.

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