I know my credit score could be better, but so far my 620 score has seemed OK. I don't really see how it affects my life on a day to day basis. So, when a friend with a 670 score started using Lexington Law to improve her credit report and raise her score while she was house hunting, I thought she must be overreacting. Lexington Law is a team of attorneys that specialize in removing inaccurate negative line items from your credit report, raising people's scores on average 40 points in 4 months (though some people report 100+ difference).
I was confused; her score was higher than mine and I thought I was doing OK. Plus, I didn't think 40 or so points could really make that much of a difference. My friend told me I should check out their online calculator, to get a feel for how much my credit score could be costing me in higher interest rates and more. I took a look, and here's what I found (TLDR; I could be saving a TON of money with a small difference in credit):
1. Home Loan Payments
Right now I rent an apartment, and I know that my subpar credit got me denied from several apartments when I was looking to move. But I want to buy a house someday, and I was curious how much my 620 credit score could affect my ability to get a home loan. I used Lexington Law's online calculator, told them my credit score and how many line items are on my report, to see how much more I would really be paying in interest on a typical home loan one day. The results shocked me.
I was absolutely surprised that credit I thought was OK, but not that bad, would cost me so much. But Lexington Law explained exactly how they estimated the payment based on the kinds of loans their calculator assumed I would take out (30 years fixed), my FICO score and more, so I knew that it was legit.
2. Buying A Car
Right now I'm still driving around in my grandma's old Honda Civic, but it's clear that all the years and miles haven't been good to it, and I'm going to need to buy a car in the next few years. So I used Lexington Law's calculator to see how much my credit would cost me at the auto dealership.
I honestly had no idea my meh credit score made this much of a difference, or that as little as 60 points could make this much of a difference for my financial life. But again, I trusted their calculator because they explained exactly how they calculated the number.
3. Personal Loan Or Credit Card
Emergencies happen to everyone, and I wanted to know if I would be able to get a personal loan or line of credit if I was injured and couldn't work, needed money to pursue a higher degree, etc.
I can't imagine how devastating it would be to be burdened by such a high-interest rate, just because of a few little points on my credit report. And if I wanted a credit card, I wouldn't qualify for many options.
After checking out the online calculator, it was clear to me that raising my subpar 620 credit score by just 40-60 points could easily save me $100,000 over the next few decades. I knew I was going to need help, and since Lexington Law's attorneys raise people's scores on average by 40 points in as little as 4 months, I feel like I'll be in good hands with them.
If you're like me and don't know how much your credit score is really affecting you, I recommend checking out Lexington Law's online calculator. After that, if you have peace of mind that your credit score isn't affecting your life, good! But if you're like me and discover that a handful of points could save you a ton of money, Lexington Law's attorneys will give you a free phone consultation to see if they can come up with a plan for you.
Update: Lexington Law is offering our readers free credit repair consultation, which includes a complete review of your FREE credit report summary and score. You can follow this link or call 833-335-5239 to take advantage of this no-obligation offer.
Call anytime between 7am and 11:59pm EST to get your free credit report and score!
Whether you are looking for a new job or trying to grow in your current one, getting a certification can be a great way to improve your skills.
Anyone can put that they are proficient in a computer program on their resume but having a certificate can help you stand out amongst the competition and give credence to the strength of your skills.
But what's the best way to invest in yourself without breaking the bank? Some certification programs can cost hundreds if not thousands of dollars. We are going to walk through six of the best certifications you can get for $100 or less.
Who is it best for: Those who work with analyzing and presenting data.
Cost: $100 for Tableau Desktop Specialist; additional certifications are available for a larger fee.
More companies than ever see themselves as data companies. Being able to understand data and use it to guide decisions at your company is often critical to taking on a leadership role. Not to mention, being able to present the data in a clean, attractive, and compelling way can help get buy-in from others in your organization or clients. That's why Tableau is a great tool to have in your toolbox.
Tableau allows you to create interactive visual analytics dashboards. In layman's terms, you can take data; create graphs, maps, or charts; and then allow end-users to interact with these graphics to better understand the information. It's a fantastic tool allowing non-technical users to gain insights for data-driven decision-making.
Tableau Desktop Specialist certification starts at $100 and has no expiration date. There are many videos on Tableau's site to prepare for your exam as well as Tableau Starter Kits allowing you to play around and learn the different capabilities of the program. Tableau offers a 14-day free trial as well as free license for one year for students.
Additional certifications after Desktop Specialist are Desktop Associate and Desktop Professional. Those working with a Tableau server may also be interested in a separate certification as a Server Associate or Server Professional.
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When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.