The second round of stimulus checks is underway for qualifying Americans. Like many people, you might be wondering what to do with the money. We have a few suggestions on how you can use this windfall of money to build your credit.
How much can I get?
If you received the first set of stimulus checks, you probably qualify for the second set as well. The second stimulus check is less than the first go-around.
To be eligible for the maximum amount, you must have earned less than $ 75,000 in 2019. If you are married, your combined income and that of your spouse must be less than $ 150,000 in 2019 to be eligible.
For eligible Americans, the maximum amount a person can get is $ 600. Married couples can get a maximum of $ 1,200. If you have dependents, each child under 17 can earn you an additional $ 600, which is $ 100 more than last time. If you are an adult and your parents declared you as a dependent on their tax return (s) in 2019, unfortunately you are not eligible for the second round of dunning checks, like the first time.
If your finances are in good shape (hopefully!) And you qualify for the second stimulus check, you can put that money to good use. While it’s certainly tempting to buy some new tech or that big TV, it may be a better idea to invest that $ 600 in something with long-lasting lasting effects, like credit repair.
Repairing or improving your credit can save you money when you need to borrow credit. Most lenders charge interest rates on their loans and credit cards, and the better your credit rating, the lower the rates you are likely to qualify for. Your credit score is an important factor in determining your assigned rate and your overall chances of qualifying for credit.
If your credit rating isn’t great, or your credit history is scarce, maybe now is the time to use that second stimulus check to increase that three-digit number that weighs so heavily on your credit card power. ‘borrowing and buying.
Boost Your Credit Score
If your credit is low, but this stimulus is a start-of-the-year bonus for you, consider spending it wisely in ways that improve your credit:
- Pay off your credit card (s) – The Christmas season was upon us and you may have racked up some credit card debt. Instead of paying it off slowly each month and racking up interest charges, consider paying it off faster (or completely) with your stimulus check. Keeping your credit card balances below 30% of their spending limits is a great way to improve your credit score.
- Boost your savings – Do you have enough savings to cover three to four months of expenses? If you don’t, you’re on your own, but it’s a good idea to have an emergency fund for unforeseen circumstances, like job loss or a medical emergency. If something were to happen and you had to skip a few bills, your credit score could go down. You can also look for a savings account with a high APY (Annual Percentage Rate) so that you can also build up your savings passively.
- Manufacturer credit – Home equity loans involve setting up a savings account with “payments,” but the payments are put into a savings account that you get at the end of the term. These loans and payments are reported to the credit bureaus and, as the name suggests, can help you build your credit score. These are available at many credit unions and banks, and can be a great way for a new borrower to build up savings and credit.
- Secure credit card – Secured credit cards are different from unsecured credit cards in that you must make a deposit and that deposit determines your spending limit. If something should happen with the balance, or if you cannot pay it off, your deposit can cover any balance. With a $ 600 stimulus check, you can deposit to a secured credit card and open a new line of credit. If you manage your credit card balance and payments well, it can improve your credit.
- Automatic loan – Take charge a car loan can be a great way to improve your credit scorebecause they usually last for years with many payments which can add a lot of positive history to your credit reports. If your credit score is not good, you will likely need a down payment to qualify for financing. With a $ 600 stimulus check, he can help you meet a down payment requirement. Most bad credit auto lenders charge at least $ 1,000 or 10% of the vehicle’s sale price, and saving a large amount can be difficult, but the second stimulus check could help meet this stipulation and put you on the hook. way of a car loan that can credit.
Auto Building Credit
Down payments are often a big hurdle that newbie or low-credit borrowers face to get a car loan. Windfall cash flow such as stimulus checks and tax returns can be a great way to meet lender demands.
Putting money on the table is only part of the equation – finding a lender who can help you with poor credit is another hurdle. But here at Auto Express Credit, we want to help you!
We have created a nationwide network of dealers who are registered with subprime lenders. These lenders don’t just consider your credit score and want to find a dealer who has these resources. Start by completing our free car loan application form, and we will look for a dealer in your area without obligation.