Money Management

Companies that claim to repair your credit for you are best avoided. Learn how you can take matters into your own hands to boost your credit score. 

Credit scores are one of those things — like the price of groceries or how much you owe in taxes — that you never think about as a kid but can cause a lot of anxiety once you’re an adult. And if your credit score has seen better days, you’ve likely noticed some ripple effects in your personal finances. Having a lower credit score can mean paying more for auto insurance, having difficulty renting an apartment, and struggling to get a good interest rate when you borrow money. And many of the best credit cards out there are geared toward folks with good to excellent credit.

There’s a bevy of “credit repair” companies out there that are well-poised to take advantage of people who need help with their credit scores. They claim to negotiate with credit bureaus on behalf of consumers, but charge upfront fees for their services and don’t do anything that consumers can’t do on their own. And if the reports of late payments or delinquent accounts listed on your credit report are accurate, you’ll simply have to wait for them to fall off.

According to the Consumer Finance Protection Bureau (CFPB), most negative information stays on your credit report for seven years. And credit repair companies are squarely in the crosshairs of the CFPB for their predatory behavior.

Thankfully, there are some ways to take improving your credit score into your own hands. Here’s how.

1. Resolve to make all payments on time

Your payment history makes up 35% of your FICO® Score, which is the largest percentage. It makes sense — lenders want to know they’ll be repaid by people who borrow money, and a history of late or missed payments doesn’t reflect well on you as a borrower.

The good news is that you can decide, right now, to get better at making on-time payments. I use a paper wall calendar to keep track of bill due dates, but a lot of people have found success automating their finances with autopay.

2. Take a closer look at your credit report

You can access credit reports for free every week through the end of the year, so if you haven’t taken a look at yours lately, hop on over to AnnualCreditReport.com and do so. If you spot errors on your report (incredibly common), you can ask the credit bureaus to remove them yourself — no predatory credit repair company necessary.

It’s important to look at your credit report at least once a year (or more often if you’ve been the victim of credit card fraud or are going through a big life change, like a divorce) so you can stay on top of your financial picture.

3. Negotiate with creditors yourself

If you’re delinquent on a loan or credit card, you might feel the urge to throw up your hands and consider it a lost cause. But you can negotiate with creditors and debt collectors and arrange to pay a percentage of what you owe as a lump sum, or even work out a payment plan with more favorable terms.

Call them and ask, and whatever arrangement you come up with, be sure to get it in writing.

4. Consider getting a secured credit card

There’s a certain type of credit card that can be a big help if you’re on a quest to rebuild your credit. When you get a secured credit card, your credit limit is equal to a security deposit you pay to the credit card company. The card’s issuer reports your credit usage and payments to the credit bureaus, so if you don’t use too much of your credit limit and make on-time payments, you’ll see credit score improvement over time.

Many of the best secured credit cards also offer you the chance to “graduate” to an unsecured card (and likely a higher credit limit) later on and get your security deposit back.

5. Speak to a nonprofit credit counselor

If you’re struggling with managing your finances, it could be time to talk to a professional. And no, I still don’t recommend credit repair companies! Instead, seek out a nonprofit agency, like the National Foundation for Credit Counseling. It can match you with a credit counselor who can help you create a debt management plan, learn how to budget, and provide a neutral perspective on your money issues.

If your credit score is just poor or fair, you might feel hopeless about your financial prospects. But as someone who has been through more than her fair share of financial hiccups, you’re never too far gone to come back. Take a deep breath and tackle these tips to get your credit on firmer ground.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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The warehouse club giant has a program to make car buying less stressful and more affordable, but is it worth it? Read on to find out. 

The Costco Auto Program has been around since 1989 and offers members-only pricing on factory certified and select pre-owned vehicles through partnerships with dealers throughout the United States.

To use the program, you can either search for a specific vehicle model or a participating dealership near you, show your Costco membership card at the dealership, and view the Costco member-only price sheet on qualifying vehicles. Costco has claimed that the typical member saves about $1,000 through the program, although the actual savings can vary.

In addition to the broad members-only pricing, the Costco Auto Program often has special incentives on certain vehicles. For example, as of this writing, Costco members can get an incentive of $1,250 or $1,500 on certain pre-owned Volvo vehicles. There are several other offers on the program’s website for both new and used cars, and these can be combined with your member pricing or any other manufacturer’s offers.

Not only does the Costco Auto Program claim to offer members-only pricing, but it only offers pre-owned vehicles that are either factory certified or undergo a rigorous inspection and have at least six months remaining on their original factory warranty.

One of the biggest drawbacks to the program is that to see any actual pricing, you not only need to enter a bunch of information online, but you’ll need to make an appointment with a participating dealer and physically go there. Costco claims that members will not be pressured into buying, but it would certainly be preferable to be able to simply access members-only pricing online. It’s also worth noting that you may still have to negotiate when it comes to your trade-in, and other aspects of buying a car such as financing and obtaining auto insurance aren’t part of the program.

Does the Costco Auto Program actually save you money?

Ultimately, the Costco Auto Program is a way for dealerships to generate sales leads. Dealers pay Costco when they make a sale from the program. That’s not to say that you won’t get a good deal, but this isn’t entirely a member perk — it’s also designed to be an additional revenue stream for Costco.

The Costco member-only price list you’ll get from a participating dealer is designed to be a no-haggle price list. Could you get the same vehicle price anyway by negotiating? Maybe, or maybe not. There’s no way to know for sure if the pricing you get through the Costco Auto Program is actually less than you’d be able to negotiate on your own. That’s just the nature of the used car business. But not having to go back and forth with negotiations to get a fair price can be a big perk to many people.

The kind of savings you might expect

Because of the general lack of pricing transparency in the used car business, there are few definitive real-world examples of how much people save. According to Yelp reviews, here are just a few examples of specific deals members have reported:

$500 discount and some waived add-ons$800 discount on a new vehicle$500 off the advertised price on a pre-owned Honda

Having said that, by far the most common tone of customer reviews is that the value is in the no-haggle structure, not necessarily in the discounts themselves. And it’s worth noting that the average rating based on 461 customer reviews is 4.2 out of 5 stars, which indicates that members are generally quite satisfied.

The bottom line is that the Costco Auto Program can be a good way to buy a car — especially if you don’t like haggling over prices. But because of its no-negotiation nature and the fact that not all dealers participate, it’s not always likely to get you the best possible price. If you’re a good negotiator, you might be able to get a better deal than you’ll find on the Costco price sheet.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Racked up debt this past summer? Read on to see how to work your way out of it. 

Summer tends to be a popular time to travel. And if you took a vacation this summer, you may be paying the price now in the form of a lingering credit card balance.

Allianz data released earlier this year found that Americans were expecting to spend a whopping $214 billion on summer vacations in 2023. On a per-household basis, that’s $2,830.

Of course, the problem with carrying a credit card balance from a summer trip is that you might end up losing hundreds or even thousands of dollars to interest charges, depending on the rate your card charges and the sum of your balance. So it’s a good idea to try to rid yourself of that debt as quickly as possible. Here’s how you can do that in the coming months.

1. Get a seasonal side gig

The holidays are almost upon us. And in the coming months, consumers will no doubt be hitting the stores in an effort to make their holiday purchases.

That’s why now’s a good time to get yourself a side hustle. Chances are, if you start looking immediately, you can find a business in town that needs more seasonal help.

But don’t wait too long to get that side hustle. U.S. retailers are only expected to add 410,000 seasonal jobs this year, says Challenger, Gray & Christmas. That might sound like a large number, but it’s actually the lowest level of seasonal hiring since 2008.

2. Cut your spending

“Cut your spending” might come across as some of the most tone deaf advice you could get. After all, you can’t stop paying for food, rent, and the car you need to get to the office.

But there’s probably some amount of spending you can cut in the coming weeks — at least before the holiday season really kicks into gear. And if you can find expenses to cut that don’t really crimp your lifestyle, you can at least make a dent in your credit card balances.

A good bet, in fact, is to spend a few minutes doing a spending audit. Comb through your last few months of credit card bills and pay attention to every expense. You might realize there’s a streaming service costing you $20 a month you don’t really need. Canceling it could free up $60 for your credit card balance by the end of the year.

Now, if you owe a few thousand dollars on your credit card, you might think there’s no sense in pushing yourself to make a $60 dent. But remember, when you’re paying off debt, every little bit counts.

3. Bank year-end bonus cash

Not everyone receives a year-end bonus. So to be clear, this advice unfortunately won’t apply to everyone. But if you are someone who generally gets a modest payday during the holidays or at the tail end of the year, then it’s a good idea to earmark that money for debt payoff purposes.

You might also get a year-end bonus in very small increments. But that still counts. And it’s important to save that money for debt payoff purposes just as well.

For example, maybe you work as a hairdresser and your regular clients tend to give you an extra $10 here or $20 there during the holidays as a thank you. That’s not the same thing as getting a $500 or $1,000 year-end bonus from your employer. But those small bonuses could really add up.

If you’re carrying credit card debt from summertime travel, you’re no doubt in good company. In that case, use these tips to shed that debt as quickly as possible so you’re not still dealing with it by the time the summer of 2024 rolls around.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Inching closer to retirement? Here are some key moves to check off your list. 

Some people opt to retire in their early 60s. Others delay retirement until their 70s.

It’s important to land on a retirement age that works for you. If you’re someone who gets bored and restless easily, then retiring at 58 may not be the best idea, even if you can afford to do so based on the nest egg you’ve accumulated.

Of course, you might land on a specific retirement age only to change your mind once it arrives. But if you have a general idea of when you’d like to retire, then it’s important to make these key moves about 10 years out. Doing so could put you in a better position to retire when you want to, and how you want to.

1. Assess your savings

There’s no single retirement savings figure that guarantees you’ll have enough money without running out. But Fidelity suggests aiming to retire with 10 times your ending salary.

So if you’re 57 with an expected retirement age of 67, and you’re earning $90,000 a year now, it may be fair to assume that you’ll end up earning $100,000 by the time you retire. That would mean aiming for an IRA or 401(k) balance of $1 million.

Now, this is just a general guideline. And if Fidelity’s advice doesn’t work for you, so be it. You may decide you’ll be fine with seven times your ending salary. Or, you may decide you want 20 times that amount.

But either way, take a look at your savings balance and see how you’re doing relative to the goal you’ve set. If you’re 10 years from retirement with $500,000 and you’re aiming for $750,000, you’ll know you might need to take steps to ramp up over the next decade if you want to hit that target.

2. Consider a Roth IRA conversion

Many people opt to save for retirement in a traditional IRA because that way, contributions go in tax-free, whereas with a Roth IRA, they don’t. But the upside of having a Roth IRA is that withdrawals in retirement are tax-free. And Roth IRAs also don’t force you to take required minimum distributions. So if you want to leave your money invested for longer, that’s your right.

The good news, though, is that you’re allowed to convert a traditional IRA to a Roth as long as you’re willing to pay taxes on the sum you roll over. That’s something you may want to do 10 years before retirement, as opposed to right before it. That way, you won’t have to deal with a major tax bill when you’re on the cusp of wrapping up your career and saying goodbye to your paycheck.

3. Whittle down lingering debt

Many people experience a decline in income once they stop working. And that means it could work to your benefit to have fewer bills in retirement.

To this end, aim to start chipping away at existing loan or credit card balances. That way, you might manage to enter retirement without those debts holding you back.

You may even want to start making extra payments on your mortgage if your goal is to own your home outright by the time you retire. However, if you refinanced to a really low mortgage rate in 2020 or 2021, then it could pay to stick to your regular payment schedule, since you could instead invest that money or potentially even earn a higher return in your savings account than what you’re being charged on your home loan.

The 10-year mark before retirement is a crucial time to take action. Make these key moves so you’re able to set yourself up for the successful retirement you deserve.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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