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Credit Score Hacks for 2021

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It’s almost time for New Year’s Resolutions, and one of the biggest ones that people have is to get their personal finances in order. One big aspect of one’s overall financial profile is their credit score. Having a good credit score means that you’ll have access to lower interest rate loans. It’s also important for qualifying for mortgages and other large loans.

If you want to increase your credit score in 2021, we’ve got just the thing for you. In this article we will be going over some things that you can start in January to help you get a better credit score in 2021.

Although these aren’t so much “hacks” as they are “strategies”, we still feel it’s important to share these ways for you to improve your credit score in 2021.

Hacks To Improve Your Credit Score in 2021

Snowball your credit card debt

Your credit card debt is one of the biggest things holding your credit score back. If you have credit card debt, it should be the first debt that you tackle, as it’s the most impactful to your credit score and could cost you many times more than the principal in interest.

One of the best ways to see early credit score “wins” regarding your credit card debt is to snowball your debt. We wrote an entire article on snowballing debt, which we recommend that you read.

In short, to snowball your debt is to focus all your debt repayment efforts on the smallest balances in order to pay them off quickly. This does two things at once: first, it lowers your monthly debt repayment obligation as you snowball your debt (even though you’ll likely be committing the same total amount per month to your debt). Second, it reduces your overall balance which improves your credit score as you pay your debt balances down.

This strategy for reducing debt is one of the best ways to boost your credit score quickly while also taking care of a nagging debt obligation.

Remember: if you’re paying off your credit card debt, you want to keep old accounts open and available to you! There’s no need to close an old credit account; instead, keep them open and have statements sent to your email every month.

Refinance your debt

If you have debt with high interest rates, there are ways that you can refinance it. Refinancing is when you take out a new loan to pay off an old one. It’s commonly done when you can get lower interest rates to refinance a loan. It’s also done when consolidating multiple loans, which is a good way to get a handle on debt payments.

Refinancing your debt won’t increase your credit score right away: in fact, it may lower it in the short term. However, there are refinancing strategies that can help you increase your credit score this year. If you’re able to make payments whereas before you were unable to afford them, you should see your credit score slowly rise.

There are many different ways to refinance your debt obligations, including your mortgage, your student loans, and other large sources of debt.

The most important thing to remember when refinancing is to consider the long term implications. Refinancing your student loans could save you thousands of dollars over the lifetime of the loan.

Get your annual credit report & dispute items

If you don’t know what’s on your credit report, you might be an unwitting victim of fraud or clerical errors made by lenders or credit reporting agencies.

In 2020, the federal government was giving out unlimited copies of your credit report to make sure that people were able to get access to their credit history during these difficult times. You can still get one free credit report per year from each of the three bureaus from https://annualcreditreport.com. Check your credit report and see what’s on it: you might be surprised.

If you ARE surprised about anything you find on your credit report, it might be time to make some phone calls. First, you’ll want to contact the lender in question to see what they have on file in your name. This alone could clear up any mistakes. Next, you’ll want to call the credit bureau that issued your report (Experian, Equifax, TransUnion). They’ll then take you through the dispute process, which can take several weeks to resolve.

We at The Credit Pros can help you with the dispute process. Learn more about how the dispute process works!

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Credit Score Hacks for 2021

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Credit Score Hacks for 2021

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It is almost time for New Year’s Resolutions and having a good credit score means that you’ll have access to lower interest rate loans. Click to read more.

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Jason M. Kaplan, Esq.

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The Credit Pros

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Options for Student Loan Repayment in 2021

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Back in March, the US government announced that it would be suspending all payments on federal student loans. This moratorium on payments was extended until January 31, 2021.

Although we don’t rule out the possibility of this moratorium’s extension by the Biden administration, we wanted to teach you about your options for student loan repayment in 2021.

What Are My Options For Student Loan Repayment in 2021?

Income-based repayment

Income-based repayment is a great way to get started on paying down your student loans without making it impossible for you to afford basic living expenses. So what are income-based repayment programs, and how do they work?

With an income-driven repayment program, you only have to pay a small amount every month, less than your typical payment would be.The way they assign your payment amount is based on a percentage of your discretionary income. The US Federal Student Aid website defines discretionary income as “the difference between your annual income and 150% of the poverty guideline for your family size and state of residence”.

There are several different types of income-based repayment plans, and all of them will differ depending on your situation. To figure out which one is the best for you, you’ll want to apply for income-driven repayment by going here (directs you to the Federal Student Aid website).

Income-based repayment options may not be available for privately held student loans, such as loans issued by Sallie Mae.

For more information about income-driven repayment plans, go to the US Government Student Aid website.

Deferment and forbearance

After the moratorium ends, you may still be able to put your loans in forbearance. Forbearance is when you and the lender agree that you will stop payments on the loan for a set length of time (usually 3 months). Interest continues to accrue, but you don’t owe anything extra if your loan is in forbearance.

Deferment is a bit different, and usually you need to meet certain conditions to qualify for student loan deferment. Deferment is generally available to those who are current students, medical residents, or those who are working in professions such as teaching. In some situations, your interest may no longer accrue.

If you’re concerned about being able to make your payments in February, you may want to consider putting your loans in forbearance.

Refinancing or Consolidation

Many student borrowers find that their loan has an enormous interest rate, making it hard to afford the payments on them. Refinancing or consolidation can help you, providing low monthly payments with a fixed interest rate.

Refinancing and consolidation are similar, but they refer to different things. Refinancing is when you pay off one loan by taking a new one, often with lower payments and/or a lower interest rate. Consolidation takes multiple loans and bundles them together into one loan, often by using the new, large loan to pay off the smaller ones.

The US Government offers a Direct Consolidation Loan which you can apply for here. You can choose to consolidate your loans using a private lender instead. Depending on the interest rate you get and the payments you will have, you may decide to choose one over the other.

If you refinance or consolidate federal student loans using a private company, you may lose some of the benefits of taking out federal student loans such as subsidized interest rates and income-based repayment. We recommend saving refinancing for private student loans or federal loans with higher interest rates such as PLUS loans.

Learn more about paying for education in our guide to student loans!

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Options for Student Loan Repayment in 2021

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Options for Student Loan Repayment in 2021

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What are my options for student loan repayment in 2021? Read this blog as we wanted to teach you about your options for student loan repayment in 2021.

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Jason M. Kaplan, Esq.

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The Credit Pros

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2021 New Year’s Resolutions For Personal Finance (And How To Achieve Them)

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Most of us have thought about or written down our New Year’s resolutions back in January of this past year… but usually have forgotten them or given up on them by mid-March. Although 2020 was a strange year (gyms were closed, many people were laid off, and a lot of us had to cancel our wedding plans) there was still room for our resolutions. No sense dwelling on the past though: 2021 is almost here! Check out this blog on new year resolutions for personal finance.

If you’re wondering how you could get started on improving your financial situation in 2021, here’s our guide to new year’s resolutions for personal finance.

New Year’s Resolutions for Personal Finance in 2021

Getting Back to Work (Or Getting a New Job)

2020 really messed things up for a lot of people. Millions of Americans were either laid off, furloughed, or found themselves temporarily out of work due to the pandemic. If you’re one of them, it might be time to take back your life and start getting back to work.

This is important, especially now, because it won’t be long until the moratorium on evictions is lifted on December 31. Worse yet, COVID-19 economic relief will end soon. If you’re currently out of work or are unsatisfied with your current job, consider adding “Get A New Job” onto your resolution list.

There are a few things you can do to get started on achieving this resolution.

  • Get your resume updated or redone. This includes your LinkedIn profile. You may be able to find free resume clinics by searching on Google, Eventbrite, or LinkedIn.
  • Set a goal to send in a certain number of applications every day. Remember: if you’re open to remote work, feel free to apply to remote postings from places outside your area!
  • Practice interviews regularly. Have someone you trust (preferably someone who has actually hired or interviewed people before) take you through a mock interview. Research questions that people are likely to ask in your field. Doing this will help increase your confidence in interviewing.

Pay Off Credit Card Debt

Credit card debt can be a serious hindrance for those trying to get themselves back on their feet financially. If you’ve dealt with an extended period of unemployment, you may have racked up some of your bills on your credit card. The interest can add up significantly!

Set a resolution to pay off a certain amount of credit card debt. Depending on your income and your current balance, you might be able to set a resolution to pay off the entire thing!

Paying off your credit card debt is an important step to take for both improving your credit score AND eliminating your debt altogether. Credit card debt is typically the most expensive long-held debt that people have, and at rates as high as 24% APR, it’s easy to see why.

One way you can get started on clearing out your credit card debt is to use a technique that Dave Ramsey calls “snowballing your debt”. We wrote an article about snowballing your credit card debt: check it out!

Build Up Savings

If 2020 has taught us anything, it’s that savings could mean the difference between financial security and financial ruin in tough times. One great resolution for 2021 is to build up your savings to a comfortable amount.

A good barometer for savings is to have at least six month’s rent saved up for a rainy day. After all, 2020 was the longest rainy day that we’ve had to live through, and it’s possible that 2021 might be no different (especially as the economic relief stops and evictions start up again!)

We understand that you might not be able to build up your savings due to your situation. If that’s you, then you might want to look at your income and your expenses to see where you could improve.

To start building up your savings, you will want to do a few things. First, look at your expenses and see what you can eliminate. Second, look at your income and see what you could do to increase it (a higher-paying job, a 2nd job, side hustles, starting a business). Third, commit to a specific amount that you want to save every month. To make this easy, you can set up your online banking to send a certain amount of money to your savings every single month.

Improve Your Credit Score

Your credit score is an important part of your overall financial well-being. Without a good credit score, you won’t be able to get the best rates on loans or qualify for a mortgage for your dream home.

To start working on your credit score, take the following steps. First, use one of many credit score tools to get an estimate of your credit score. Then, get your free credit report from https://annualcreditreport.com (this is an official US government website).

Once you’ve done this, you can start working on steps to improve your credit score.

  1. Remove fraudulent or erroneous entries on your credit report by disputing them. We wrote an article explaining the dispute process here.
  2. Settle delinquent accounts. These will stay on your credit report for up to 10 years (7 in most cases), however your outstanding balance on these and your payment history will be reflected in your credit score.
  3. Resume or renegotiate payments on accounts that are past due.
  4. Pay down credit card debt. Credit card debt (and your credit utilization ratio) is a big part of your credit score.

We wrote several guides on how to improve your credit score: here’s one that explains what your credit score is made of!

The Credit Pros offers comprehensive credit repair and credit monitoring tools to help you improve your credit score in 2021. Learn more about credit repair here!

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2021 New Year’s Resolutions For Personal Finance (And How To Achieve Them)

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2021 New Year’s Resolutions For Personal Finance (And How To Achieve Them)

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If you’re wondering how you could get started on improving your financial situation in 2021, here’s our guide to new year’s resolutions for personal finance.

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Jason M. Kaplan, Esq.

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The Credit Pros

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Economic Trends to Follow in 2021

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2020 was the most interesting year that many of us have seen in our lifetimes. Coming into 2020, nobody expected global lockdowns and over 1 million deaths worldwide as a result of the COVID-19 outbreak. Nobody expected the world’s governments to respond the way they did. And yet, here we are, at the end of 2020, doing our best to figure out how economic trends 2021 is going to do.

One thing that 2020 has made clear is that nobody has a crystal ball. With that being said, there are trends and key people that Americans should watch closely in 2021.

Note: This is only an opinion of the author and is in no way to be construed as investing advice.

Economic Trends to Follow in 2021

Reference: https://www.morganstanley.com/ideas/global-economic-outlook-2021

Joe Biden, The Democrat-Controlled House & The Senate

As of December 2020, the Republicans are still vying for control over the Senate with only the Georgia senate race still left uncounted. However, the presidential election is over and Joe Biden is the President elect of the United States.

No matter what side of the political fence you’re on, it’s still important to watch what Biden and the House do. There are policies they could pass that could impact the economy in both the short and long terms. We will abstain from speculating, however if you watch closely and see what the Trump administration did versus what the Biden administration does, you’ll see how Biden’s election will affect the economy over the next four years.

One big area of interest is what Biden’s administration plans to do regarding China. Trump had been in a “trade war” with China, using tariffs to reduce the importation of Chinese goods into the US. Depending on what Biden does about these tariffs, we may see a change in US-China relations which could affect the economy positively.

Watch China Closely

China has been rapidly growing. China’s GDP growth rate was 6.11% in 2019, 6.75% in 2018, and 6.95% in 2017. They’re expected to see up to 8% GDP growth in 2021, according to Fitch Ratings. But GDP growth rate isn’t the only reason why we should be keeping an eye on China.

The Chinese government, led by President Xi Jinping, has made decisions that may affect its trade relationships. Its reported use of forced labor camps using Uighur Muslims as labor has caused some companies to cut ties with Chinese factories. Not only that, but China had responded to the Trump administration’s “trade war” with additional retaliatory tariffs.

Although China’s activities put it at odds with world powers, it’s unclear what (if anything) they plan to do about China in 2021. Watching China closely over the coming year will help us get an idea of the economic situation going forward. Keep reading this blog on economic trends 2021.

COVID-19 Vaccine Trials & Distribution

As of December 2020, several companies and organizations have completed trials for their COVID-19 vaccines. New York has begun its COVID-19 vaccination program in earnest, aiming to deal with the problem head on.

During 2021, more and more programs will be started to distribute the COVID-19 vaccine to people. The first ones to receive them will be healthcare workers and at-risk groups, followed by the rest of the population.

News regarding COVID-19 vaccinations should be watched closely. Some vaccines may not be as effective as others. Some countries, states, and municipalities may do a better job vaccinating their population. This could result in lopsided economic recovery.

Work From Home Might Be Here to Stay

COVID-19 changed a lot about the way we live our lives. We have quickly adapted to doing most of our shopping online, going out only when necessary, and doing both work and school from home. Our lives have been centered around the home, more so than ever before in our lifetimes.

With vaccines on the horizon, we may be able to see a “new normal” that more closely resembles the old. But there’s evidence that our working from home will be here to stay. About 56% of the US workforce holds a job that is at least partially compatible with working from home. Global Workplace Analytics expects that around 25-30% of the workforce will continue working from home for several days of the week by the end of 2021.

Some tech companies, including Microsoft and Reddit, have stopped adjusting pay to cost of living. This indicates that they may expect a large portion of their workforce to remain remote for the time being.

If you’re still trying to figure out how to make working from home work for you, check out this article we wrote earlier in 2020!

Conclusion: Keep An Eye On World Events!

2020 was an eye-opener. It showed us that it doesn’t take much for things to break down. It also showed us that even when things DO break down, we as a global society find a way to bounce back.

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Economic Trends to Follow in 2021

Article Name

Economic Trends to Follow in 2021

Description

2020 was an eye-opener. It showed us that it doesn’t take much for things to break down. Read this blog on economic trends 2021 to follow.

Author

Jason M. Kaplan, Esq.

Publisher Name

The Credit Pros

Publisher Logo

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