Money Management

Don’t assume any of these will help (or hurt) that important three-digit number. 

Your credit score says a lot about your financial past, and can have a huge impact on your future financial prospects. After all, credit scores are used to determine how much interest you’ll pay when you borrow money, whether you’ll be approved for that sweet rewards credit card, and even how much you’ll be charged for auto insurance. In short, it pays to keep on top of your credit score.

With that in mind, here are a few factors that you might think have an impact on your credit score, but actually don’t.

1. Getting married — or divorced

Being married (or not) doesn’t matter for your credit score. Your marital status doesn’t even appear on your credit report. The only way you and your spouse are linked via your credit is if you apply for credit together (such as a mortgage loan). Then the lender will consider both of your credit histories and likely base approval (and interest rate) on the lower score.

2. Paying your rent or utility bills

Except in very select circumstances (such as signing up for a credit-boosting service), paying your rent, utilities, or other bills doesn’t improve your credit. These payments aren’t reported to the credit bureaus the way payments on loans and credit cards are. This is also why in most cases, banks don’t have evidence of all the years of rent you paid on time when it comes to approving you for a mortgage loan.

3. Increasing your income

While a lender may ask you for your income, or even request pay stubs or a W-2 to see evidence of your earnings, your salary doesn’t impact your credit score. So if you’ve just scored a big raise at work or switched jobs to something that pays better and are now expecting a credit score boost, well, you’ll be disappointed. However, having more income can help your credit by allowing you to pay off existing debt.

4. Having a low interest rate on a loan

If you have a low interest rate on an existing loan, your credit score will not improve directly as a result of this. The inverse can be true, however. If your interest rate on a personal loan is low enough that you can make higher payments toward your principal balance, you’ll pay the loan off faster. As your debt decreases, your credit score will increase.

5. Ignoring it

Pretending your credit score doesn’t exist at all is absolutely the opposite of productive when it comes to improving it. The best way to address a low credit score is to tackle it head on, because you absolutely do have ways to improve it.

How can you actually improve your credit score?

Your credit score is made up of five different factors that you have influence over, and they’re weighted differently.

Payment history (35%): If you haven’t always been good about paying your credit card bills on time, work at it, because payment history has the biggest impact on your score.Credit utilization ratio (30%): Credit utilization ratio refers to the percentage of your credit you’re using. If you can pay down some existing debt, it’ll improve your credit score.Age of credit history (15%): How old are your accounts? Try to keep credit accounts open and in good standing for as long as you can.Credit mix (10%): It’s not a good idea to borrow money in different ways only to boost your credit score. But if you have an auto loan, a mortgage, and a few credit cards, and all are in good standing, you have a good credit mix.New credit inquiries (10%): You can keep this in good shape by applying for new credit sparingly. Every time a lender does a hard credit check, it dings your credit score by a few points.

Credit scores aren’t such a mystery. Treat yours with TLC by focusing on the weighted factors above, rather than worrying about those that don’t impact it.

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These tips can save you hundreds of dollars on your monthly mortgage. 

With interest rates rising, it’s more important than ever to make sure your mortgage rate is as low as possible. The monthly payment for a $500,000 home is now $1,000 higher than the same loan a year ago, due to higher interest rates. Here are four tips that can help you get the lowest mortgage rate possible this year.

1. Pay down points

One way to get a lower rate is by paying points. A point is equal to 1% of the total loan amount and lowers your rate by 0.25%. The points are paid at closing and the more points you pay, the lower your interest rate. Of course, this means you have to have a sufficient amount of cash available to cover the cost of the points, but it could be worth it if you plan on staying in your home for at least five years or longer.

For example, let’s say you have a 30-year fixed-rate mortgage with an interest rate of 6% on a $500,000 loan. With a buydown, one point is typically 1% of the loan amount. So paying an additional 2% upfront ($10,000) would reduce your interest rate to 5.5%. This means that instead of paying $3,300 per month for a $500,000 loan, you’d only be paying $3,100 per month. Over time, this could add up to significant savings on your total mortgage payments.

2. Get pre-approved

Getting pre-approved for a loan is not the same thing as getting pre-qualified. Pre-approval means that mortgage lenders have reviewed your financial information and credit score and given you the green light for a loan before you start house hunting. Having pre-approval gives you bargaining power when negotiating with potential sellers and can help guarantee that your offer will be accepted. Plus, lenders tend to offer better rates when they feel confident about a borrower’s ability to repay the loan.

3. Get your finances in order

Before applying for a mortgage loan, take steps to make sure all of your finances are in order. This includes checking your credit reports (which are free from all three major credit bureaus) and making sure there aren’t any errors that could hurt your credit score or cause issues when applying for a loan. Additionally, try to pay down any existing debt so lenders view you as an attractive borrower who will be able to repay their loan on time each month.

4. Raise your credit score

Your credit score plays an important role when it comes to determining what kind of mortgage rate you can qualify for. Work on raising your score by using credit responsibly (such as by paying bills on time and not exceeding 30% utilization), monitoring your reports regularly, and disputing errors if necessary. It may take some time but having a higher score can help ensure that you get the best possible rate on your mortgage loan.

Getting a lower mortgage rate isn’t always easy, especially in today’s market. But if you follow these tips, then you should be able to find yourself better rates this year. With these steps taken care of ahead of time, finding yourself an excellent mortgage deal should be much smoother sailing!

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Are you struggling to afford this basic grocery staple? 

Inflation has been driving the cost of living way up. And that extends to everything from utilities to apparel to food.

In February, grocery prices were up 10.2% on an annual basis, according to that month’s Consumer Price Index summary. And while egg prices fell 6.7% in February compared to January, they’re still about twice as expensive as they were a year ago. It’s for this reason that Dollar Tree has made the decision to stop carrying eggs — at least for the time being.

A necessary business decision

Dollar Tree prides itself on its low price points. Most of the items it sells retail for $1.25 — not $1. But select items are priced even higher.

However, Dollar Tree doesn’t like to stray from its $1.25 price point all that much. And at this point, it can’t sell eggs for a price it’s comfortable with. As such, the discount store chain has made the decision to pull eggs from its shelves for now, and it will look at reintroducing them in the fall. The hope is that prices will have come down by then.

In February, the average cost of a carton of a dozen eggs was $4.21. That’s an improvement from January, when the same purchase would have resulted in a credit card tab of $4.82. But back in February of 2022, you could buy eggs for about $2 a carton. So right now, a lot of consumers are feeling the strain, since eggs are such a staple item.

How to combat higher egg and grocery prices

It’s not just eggs that have inflated prices right now — it’s groceries in general. So if you’re struggling to keep up with your costs, and you’re tired of having to dip into your savings account just to put food on the table, then a little strategic shopping could go a long way.

For one thing, you may not be able to buy eggs at Dollar Tree. But you can look to Dollar Tree for other low-cost groceries and household staples.

It also pays to try buying in bulk when it comes to products you consume frequently in your household. If you eat a lot of eggs, see if your supermarket carries a discounted bulk carton. And warehouse club stores like Sam’s Club and Costco commonly have eggs in stock. You might pay more than you would’ve a year ago, but if you buy your eggs in bulk, they might cost less per unit.

Finally, if you’re really struggling with the cost of eggs, try cutting back on them. Many baking recipes, for example, can be adjusted to become egg-free (though you might end up paying a comparable price for certain substitutes).

That said, for many people, eating eggs less frequently is pretty difficult. But remember — you might be spending an extra $2 or $2.50 for a carton of eggs now, but that’s comparable to the cost of a single store-bought coffee. So if you’re struggling with higher egg and grocery prices but you buy coffee twice a week, cutting those purchases in half could help make up the difference, as least as far as eggs are concerned.

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If your Dollar General is offering it, you may want to add it to your cart. 

Dollar General is best known for offering affordable household products, along with some grocery items.

Unlike other dollar stores such as Dollar Tree, not all items at Dollar General are $1. But, the products they sell usually do have competitive prices that are easy on your checking account. And, the stores are often conveniently located.

That’s why it’s good news that many Dollar General stores are adding a product that many people could stand to buy more of. Here’s what it is.

Dollar General is branching out into a new product line

For those looking for a more affordable place to buy an important grocery-list item, Dollar General’s new addition is very good news. Dollar General has begun adding fresh produce to its stores.

There are already more than 3,000 Dollar General stores offering fresh fruits and vegetables and another 2,000 stores will be getting these grocery items on their shelves this year.

The push to add produce to its stores is part of the store’s “DG Fresh” initiative, which was launched in 2021. The store’s goal is to provide more affordable groceries by owning the distribution channels for fresh and frozen foods, thus cutting out the middleman and allowing Dollar General to sell produce (and other items) at a lower price than consumers would traditionally pay while still making a profit.

With as much as 75% of the U.S. population living five miles or less from a Dollar General store, the store’s commitment to “increase affordable access to food through new stores and product availability,” could make a meaningful difference for people who do not live close to grocery stores and who therefore often struggle to find healthy foods at a reasonable price that they can buy regularly.

Should you buy your produce at Dollar General?

If your Dollar General has already made produce available, or if it will do so this year, then it’s worth giving the store aisles a look to see what its offerings are.

The produce section of Dollar General stores has gotten some mixed reviews on Reddit, with one user describing it as a “joke,” because “Half the bins were empty and dirty, the ones that had stuff in them were a joke — limes that were as big as a quarter. Some red onions that were rotten clean through.” Other Redditors, however, said their product sections had pretty good product offerings. “The produce is surprisingly good-looking when shipped in.”

Since there could be regional variation from one store to the next, it’s worth checking out what your local store has available. You may be pleasantly surprised to discover that you can get some of your fruits and veggies at a low price from a store that’s convenient to shop at. While you shouldn’t necessarily expect the same selection as you’d find at a bigger grocery store with a full produce section, picking up some items from Dollar General could be an affordable way to add more of these healthy items to your diet without giving your credit cards too much of a workout.

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It’s an easy way for me to benefit financially. 

U.S consumers aren’t strangers to credit card usage. As of 2022’s fourth quarter, Americans had racked up a total of $930 billion in credit card balances, according to Transunion.

You’ll often hear that putting too many expenses on a credit card could lead to a world of financial hurt. That’s because credit card interest can accrue quickly, trapping you in a cycle of debt. But I actually make a point to put every medical bill I get on my credit cards for one big reason.

It’s all about benefiting from bills I’m forced to pay

Healthcare is one of those things I refuse to neglect. Meanwhile, last year, my husband switched jobs, and with that came a new health insurance plan that took some getting used to.

For the first time in my adult life, I’m now enrolled in a high-deductible health insurance plan. In the past, I’ve been able to largely avoid deductibles for in-network service, whereas now, I have to meet a pretty high family-level deductible before my insurer starts to pick up the tab for my family’s care.

As such, in recent months, my healthcare spending has gone up a lot. But rather than write out a check for those medical bills or swipe a debit card, I make sure to put them on my credit cards.

All of my credit cards offer cash back on the purchases I make. And the way I see it, if I have to pay for medical care, I might as well get rewarded.

Now, if you don’t manage to pay off your credit cards in full every month, you can start to accrue interest on your balances that well exceeds the amount of cash back you get from your cards. But because I budget carefully for medical bills, and I spent less in other categories to be able to swing them, I’m able to pay my credit cards in full and avoid carrying a balance. Because of this, I get all of the upside of charging healthcare expenses on my credit cards, and I get to steer clear of the downside.

I use credit cards even with an HSA

Since my family is now enrolled in a high-deductible health insurance plan, we’re able to contribute money to a health savings account, or HSA. We’ve been doing so since last year and have some funds we can access already to pay for medical care.

But even so, I still make a point to use my credit cards for healthcare spending because my goal is actually to leave my HSA alone for as long as possible. HSAs let you invest money you don’t need to withdraw right away, and gains in your HSA are yours to enjoy tax-free. So the way I see it, as long as I can afford my medical bills, I might as well pay for them out of pocket and put them on my credit cards. That way, I can grow my HSA and score cash back at the same time.

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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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