Money Management

I have worked hard to get an 810 credit score so I can get affordable loans. Find out a few other perks I enjoy because of my high credit score. 

A good credit score also helps me keep my insurance premiums as low as possible.

My credit score is somewhere around 810, although it can vary a little here and there depending on my current credit card balance reported to the credit reporting agencies. Since the credit score scale only goes up to 850, that’s a pretty great score.

It’s not an accident that I have excellent credit — I’ve worked hard to get it. And there are a few key reasons why I made the effort.

1. I want to be able to borrow affordably

The most important reason to earn good credit is to be able to access affordable financing. See, there are times when you most likely have to borrow money — like if you’re buying a home. And the costs of a mortgage can be profoundly impacted by your credit score.

In fact, as of July 31, 2023, the average interest rate for a 30-year fixed-rate mortgage is 6.561% if your credit score is above 760. But if your score is in the 700 to 759 range, it’s 6.783%.

Those with the higher scores would have monthly payments of just $1,908 per month on a $300,000 loan, compared with $1,952 for people in the 700 to 759 range. And for people with even lower scores, like 620 to 639, the national average mortgage rate is 8.150%, and the monthly payment jumps all the way to $2,233.

Being able to borrow affordably is really important, as a lower monthly payment on big loans will leave you a lot more money for other financial goals. Even if you aren’t buying a house, this could still matter for things like car loans, so it’s absolutely worth trying to work hard to earn a good score.

2. I want access to the best credit cards

There are many credit cards that offer amazing rewards programs that provide generous cash back and other great perks like low rates for balance transfers. But, you usually have to have good credit to get the best credit cards. For example, The Ascent’s 2023 Award Winner — the Wells Fargo Active Cash® Card — typically requires you to have either good or excellent credit.

If you want to be approved for the most competitive rewards cards, you should aim to work hard for a good credit score. Since I do things like pay my bills on time and manage my debt well, I have my pick of cards and can get several that match my spending patterns.

3. I want low insurance premiums

Insurers also consider your credit record, and a desire to pay low premiums was one more reason why I made an effort to get an 810 credit score. It could cost as much as 72% more to get insurance with bad credit compared with good credit. That’s a lot of extra money I can now use for better things.

Most people need at least auto insurance and typically also home and renters insurance, so this is another reason everyone should aim to improve their credit.

4. I want other companies to trust I’ll pay as promised

Finally, many other companies check credit as well, including cellphone companies, utility providers, and landlords. I want anyone who checks my credit to trust that I’m a good person to do business with and to offer low deposits and customer-friendly terms because of it.

If you also want all the benefits of good credit, the good news is there are things you can do to try to earn a great score over time too. Paying all your bills on time, maintaining a low credit utilization ratio (below 30%), not applying for too much credit at once, having a mix of different kinds of credit, and avoiding closing old credit card accounts are all steps you can take.

It takes time to build a great credit score, but you can get started today by simply committing to make all your payments on time and committing to repay your debt if your utilization rate is too high. If you start working on these two things, your credit should improve steadily until you get the best rates and terms when borrowing.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 Read More 

There are nearly 10 million job openings right now. Read on to learn more about how to get a new job or boost your current salary. 

While some of the latest data shows that inflation is starting to cool down, there’s no getting around the fact that inflation has eroded many workers’ buying power over the past few years — and that’s caused a strain on many Americans’ personal finances.

Consider that annual grocery prices rose at their fastest pace in more than 40 years in 2022, and the current median monthly rent price of $2,029 is nearly 17% higher than the same period in 2020, according to research from Rent.com.

The rapid rise of inflation in such a short period may mean that the salary you were getting paid just a few years ago isn’t giving you the same standard of living it once was. If that’s the case, here are a few things you can do to improve your situation.

1. Negotiate for more pay

If you like your job but think you deserve more pay, consider negotiating a higher salary. The good news is that many companies are already open to paying workers more right now. A recent Salary.com survey said that 64% of companies are considering higher merit-based pay increases this year, a 23% increase from last year.

While this doesn’t have to be a complicated process, you should approach it with some finesse. For instance, do some research ahead of time to figure out what similar positions in your industry are getting paid.

Spend a little time on websites like Salary.com and Glassdoor, and compare your job title and years of experience to similar job postings and salary data. Not only will this help you find a good salary number, but it may also help convince your boss that you’re asking for a reasonable amount.

When discussing the raise, you’ll also want to give specific reasons why you believe you deserve it. Maybe you just completed an important project for the company, increased quarterly revenue, landed a large client, or surpassed an annual goal set by your boss.

While it can feel awkward for some people to promote their achievements, gathering all this information and asking at the right time can give you confidence that you’re making the right decision.

2. Take on a side job

If asking for a raise doesn’t work out, or it’s not a significant increase, you may want to consider taking on a side job. While there are a lot of different side hustle opportunities, it may be best to think of what skills you currently have that can easily be used to take on more work.

For example, if you work in public relations, taking on some side projects as a consultant may allow you to make more money without having to invest in new equipment or training. According to the freelancing platform Upwork, public relations consultants get paid between $50 to $100 per hour.

The same idea can be applied to people who have project management experience in their current job. Upwork’s data shows that project management work can pay between $19 to $45 per hour, and demand for the job is expected to grow by 7% through 2031.

The point here is to use your time and experience in the most efficient way. Landing one or two clients may be enough to increase your pay to the level you want without needing to take on a lot of additional work or spending time developing a new skill.

There’s a long list of websites you can use to find extra work, including Fiverr and Upwork, but it’s also a good idea to talk to friends and colleagues. I picked up some extra freelancing work a few months ago after casually mentioning the idea to a friend whose company needed help with some additional projects.

3. Look for a new job

If you need more money and your current job isn’t willing to pay more, it may be time to look at other permanent opportunities. The good news for job seekers is that the labor market is strong, and switching jobs is still a good way to boost income.

The latest data from Bank of America shows that people who job-hop earn an average of 13% more in their new positions. That percentage is down from a high of 20% during the Great Resignation, but it’s still higher than the average 10% pay raise people received when switching jobs before the COVID-19 pandemic.

The unemployment rate is currently at 3.6%, a nearly 50-year low, according to U.S. Bank, and as of last month, there were 9.8 million job openings in the U.S.

But the job market is showing signs of slowing down, which means that if you’re considering a new position, now may be a good time to look. Many employers are still looking for workers, and your chances of finding a higher-paying job may still be better than before the pandemic.

Just like asking for a raise, make sure you do your homework beforehand to figure out how much your skills and experience should help you earn.

And no matter which avenue you choose, remember that if you don’t score a raise, get a higher-paying job, or find a side project, there are budgeting apps out there to help you manage your money. There are also other resources available if you need help paying off debt.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

You should never pay a medical bill until you review it carefully to ensure it’s correct. Discover how medical providers and hospitals overcharge patients. 

Unfortunately, affordable healthcare can be hard to come by in the United States. For many Americans, costly bills after a hospital visit or procedure aren’t uncommon, even with health insurance. When you receive a medical bill, it’s essential to carefully review the charges to ensure it’s accurate. That’s because many hospitals charge you more than necessary. I’ll outline a few ways this happens below and explain how to avoid being overcharged.

1. Duplicate billing

A common way for patients to be overcharged for medical care is duplicate billing, which is when a medical provider bills for the same procedure, test, or treatment more than once. This could occur on one bill or when receiving multiple bills for hospitalization or a procedure. Double billing can be easy to miss, so it’s important to carefully review all medical bills.

2. Upcoding

Another way patients are charged more than necessary for medical care is through upcoding. This practice is when a health care provider submits codes for more expensive diagnoses or procedures than what was diagnosed or performed. Some medical providers and practices use this deceptive practice to receive higher reimbursement for care.

3. Data entry errors

Patients can also be overcharged for medical care because of data entry errors. For example, if a mistake is made while your health insurance information is entered into the billing system, you may be denied coverage for procedures or treatments. A mistake like this could significantly impact your checking account.

4. Medical coding errors

Medical providers use codes to explain diagnoses, treatments, and procedures. These codes determine the cost of medical care during the billing process. If the wrong code is used, a patient will receive an incorrect bill, and it could be more costly than necessary. If your bill feels overly expensive, it’s possible that a coding error occurred.

Do this to avoid being overcharged for medical care

No one likes to be billed more than necessary. When it comes to medical care, being overcharged can significantly impact your personal finances. Whenever you receive a bill in the mail for medical treatment, it’s essential to carefully review it to ensure it’s accurate before paying it. If you don’t do this, you may pay more.

If you think something looks off or have a question, it’s always worthwhile to reach out to the medical provider for further clarification. Often, patients are sent a lump sum bill. You can instead ask for an itemized bill to be sent to you. An itemized bill will show a breakdown of each charge, making it easier for you to confirm if the total is correct.

You can also contact your health insurance company to discuss the bill or charges. Before doing this, it’s best to review your insurance coverage in detail to ensure you understand your coverage. If a claim has been denied, and the insurance company won’t budge, you can file an appeal. Be sure to do so quickly, as there may be a timeline for the appeals process.

It’s important to be aware that overcharging for medical care happens and to be alert to some of the ways you could be affected by this practice. Keep this information in mind the next time you get a medical bill. Taking a few extra moments out of your day could help you keep more money in your pocket. Every bit of money saved makes a difference.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

 Read More 

You don’t have to put down 20% to get a mortgage loan — but if you can swing it, it’s worth it. Keep reading to learn why. 

A home purchase is likely to be the biggest expense you’ll ever have, and as such, it’s worth taking the time to truly reckon with the costs you’ll take on when you do. Along your journey to homeownership, the largest single cost you’ll incur could well be your down payment.

It’s a common misconception that you’re required to save up 20% of a home’s purchase price for a down payment. In reality, you might be able to pay as little as 3% down for a conventional mortgage loan or 3.5% for an FHA loan. If you qualify for a USDA or VA loan, you may not need a down payment at all to get into a house.

“Hooray!” you might be thinking. “A home can be mine for less than 20% down! Where do I sign?” Well, not so fast. There are a few things you should consider before making a smaller down payment on a home purchase.

1. Mortgage insurance will add to your costs

Putting less down for a home purchase can add to your ongoing costs in the form of mortgage insurance. This doesn’t protect you as the borrower, but rather, it protects your mortgage lender if you default on the loan and the lender must reclaim your home and sell it, potentially at a loss. There are different types of mortgage insurance for low down payments.

If you opt to put less than 20% down on a conventional loan, you’ll likely be charged for private mortgage insurance (PMI). This will generally amount to 0.5% to 1% annually of the amount you borrow. If you take out a mortgage loan for $250,000 and your PMI is 1% of that amount, you’re looking at paying $2,500 per year, or an additional $208 per month on top of your regular mortgage payment. Your PMI can be canceled once you reach 20% equity in your home.

If you’re buying with an FHA mortgage loan, you’ll pay mortgage insurance premiums (MIP). These come in the form of a monthly cost as well as an upfront cost at closing. Unfortunately, unless you make at least a 10% down payment, MIP is with you for the life of the loan (with a 10% down payment, it lasts 11 years). You may be able to refinance into a conventional loan once you reach 20% equity, though. USDA mortgage loans have mortgage insurance, too, but the cost is generally less than on an FHA loan. Of course, these loans also have strict income requirements to qualify, and you must be buying a home in an eligible rural or suburban area.

2. With no down payment, you’ll pay more for a VA loan, too

If you’re an active duty service member or a veteran, you might qualify for a VA mortgage loan. For qualified buyers, these loans have no down payment requirement at all. However, you will not get away scott free, as there is a funding fee to contend with. The VA funding fee is calculated based on whether this is your first home loan with the VA and whether you make a down payment.

Let’s say you’re still borrowing $250,000 for a home and not making a down payment. It’s your first VA loan purchase, and so you’re assessed a 2.3% upfront funding fee. That comes to $5,750. If you made a 5% down payment and borrowed that $250,000 to cover the rest of your home purchase, your funding fee would be 1.6%, or $4,125. Even on a loan with no hard down payment requirement, you will still have to cough up extra funds.

3. A lack of equity can be problematic

No matter what kind of home loan you’re getting, going in with a 20% down payment will help you get approved. Lenders like to see that you’ll have “some skin in the game,” so to speak — meaning you stand to lose a chunk of money if you stop making mortgage payments and lose the house to foreclosure. And it’s important to do whatever you can to reduce your mortgage costs, especially in this time of higher rates. As of this writing, the average rate on a 30-year fixed-rate loan is 6.81%, per Freddie Mac. With a down payment, your interest rate could be lower.

Plus, having little or no equity in your home increases the odds of ending up underwater on your mortgage loan. This is when you owe more on the home than what it’s worth. Home values do fluctuate, and this might not be a big deal if you’re not struggling to make payments and don’t need to sell right away. But if you do need to sell and won’t be able to command a high enough price to pay off your loan, that could be a real problem.

As you can see, making a lower down payment may save you money upfront, but it could cost you more in the course of buying a home. Be sure you’ve fully grasped these factors before proceeding with a down payment under 20%.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.

 Read More