How to Get Your $1,800 Stimulus Check if You’re a Recent Grad

The first and second stimulus checks left a lot of college-age students disappointed. If your parents claimed you as a dependent on their tax returns, you didn’t qualify for the $1,200 and $600 checks.

They also disappointed plenty of parents. The $500 and $600 child stimulus credits were only available for dependents 16 and younger.

But if you graduated from high school or college in 2020 and started supporting yourself, there’s a good chance you can still claim $1,800 of stimulus money. Here’s how.

Why Recent Grads May Qualify for $1,800 of Stimulus Money

Both rounds of stimulus checks were an advance on a tax credit for 2020 that were calculated using 2018 or 2019 returns. But if you qualify based on your 2020 tax situation, you could get $1,800 of stimulus money when you file your taxes as a Rebate Recovery Credit. That’s IRS speak for: “You’ll get it as a tax refund.”

So how do you know if you’re eligible? Basically, if you provided more than half of your own financial support in 2020, your parents can’t claim you as a dependent. If you no longer qualify as their dependent, you can most likely qualify for stimulus money by filing a tax return.

If you graduated last spring, found a job right away and immediately started paying all your own bills, you would probably qualify. The same applies even if you didn’t graduate but you started supporting yourself in 2020.

Where it gets murkier is if your parents still provided some support. For example, if you got a part-time job and moved back home with your parents in 2020, you may or may not qualify.

The best solution here is to use free tax software to file a tax return. The platform you choose will ask some basic questions to determine whether or not you count as someone else’s dependent. It will then figure out whether you’re eligible for stimulus money or any other tax credits and give you the money as a refund.

The deadline to file is April 15. As long as you file online, you’ll typically receive your refund within three weeks.

What About the Third Stimulus Check?

While a third stimulus check for $1,400 is looking likely, it hasn’t passed yet. If it happens, though, it will be a 2021 credit that will be processed using 2020 returns. By filing your tax return now, you’ll ensure that the IRS has the information it needs to get you your third stimulus check ASAP.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]

<!–

–>



Source: thepennyhoarder.com

61 Million Americans Cut Car Insurance Costs Last Year. Here’s How You Can, Too

There’s no question the pandemic was terrible — for a lot of reasons. But a silver lining managed to peek its way through the darkness for nearly 20% of the population:

Car insurance rates dropped significantly, saving 61 million people hundreds, if not thousands, of dollars each since last year.

So, why did rates drop so much?

First, fewer people were on the roads, so there was a lower chance of an accident or claim. Then, new car sales were down an estimated 40%, meaning the claims that did come through may not have been as expensive. And finally, insurance companies knew they needed to be more competitive, since it’s so easy for people to find a new, better policy.

All of those factors caused rates to drop in 2020 (and stay low). One Penny Hoarder took advantage of this situation over the summer and managed to cut her bill by more than half.

Wondering how you can cut your bill, too? It’s not too late. You just need to compare quotes.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using Insure.com, people save an average of $540 a year.

Yup. That could be more than $500 back in your pocket just for taking a few minutes to look at your options.

Kari Faber is a staff writer at The Penny Hoarder. She’s the one who saved 50% on her car insurance bill in the midst of COVID-19.

<!–

–>

Source: thepennyhoarder.com

What Is Revolving Credit?

There are many different ways to get financing in the world today. Revolving credit is a great way to do this and there are many ways in which you can access this type of credit.

woman using credit card

Ready to learn more about how revolving credit accounts can help meet your financial needs while building your credit score at the same time.

Then keep on reading.

What is revolving credit?

Revolving credit is when you have access to a line of credit from a lender and can withdraw and repay funds on your own schedule. As you pay off the outstanding balance, you then have access again to use those funds if and when you wish to do so.

One benefit of having a revolving credit account is that lenders typically report your positive payments to the major credit bureaus. So if you want to build your credit from scratch or repair it from past financial issues, then revolving credit is one way to do that.

Obviously, it’s important to use your revolving credit wisely. If you don’t pay off your balance in full each month, you’ll begin accruing interest. Depending on the types of revolving credit product you use, your interest rate could range widely.

What are some types of revolving credit available to consumers?

Examples of Revolving Credit

Credit Cards

Perhaps the most common type of revolving credit is a credit card. You have a credit limit, which is the maximum amount of credit you’re allowed to use each month. You can’t charge anymore once you hit that number. Credit card companies require a minimum payment each month, but you can set your own schedule for repaying the bulk of the balance.

Just as with any type of financing, you’ll pay interest on your outstanding credit card balance. The average APR for a credit card is around 16%, but it can also go much higher depending on your credit score and payment history on the credit card.

Home Equity Lines of Credit

Another type of revolving credit is a home equity line of credit or HELOC. If you own a home and have enough equity, you can apply to borrow funds up to a percentage of that equity. Rather than receiving a lump sum, you draw funds from your line of credit as you need them.

The benefit here is that you’re not paying interest on money you’re not using. So, for example, if you use your line of credit for a home renovation, you can withdraw funds each time you need to make a purchase or hire a contractor.

If the project is spread out over a period of time, you can save yourself money on accruing that interest. Plus, HELOC rates are typically much lower than those associated with credit cards and even personal loans.

Revolving Credit vs. Installment Credit

There’s a big difference between revolving credit and an installment loan — most notably in the way the borrowed funds are repaid. We discussed how you can pay revolving credit at your own pace while accruing interest.

With installment loans, on the other hand, you have fixed monthly payments. The principal and interest are spread out over a predetermined repayment term. For example, you may have an installment loan that lasts over the course of three years.

As long as you agreed to a fixed interest rate, your payment is due in full every month and the amount should be the same each time (assuming you’ve paid on time in the preceding months.

Variable Rates

Lines of revolving credit typically don’t have fixed interest rates but instead have variable APRs. Credit card issuers can increase your rate at certain times, including if you miss payments.

A HELOC is typically tied to the prime rate. So whatever that number is set at, you can usually expect to pay a point or two more. Depending on your lender, there may be a cap on how high the rate can go.

Used responsibly, a revolving line of credit can help strengthen your credit score. As long as you keep your available credit relatively low compared to your credit limit and make at least the minimum payment on time, you can successfully build a positive credit history.

What Is A Fico Score?

If you’ve ever tried to get a loan or applied for a credit card, you’ve likely heard the term “FICO score” mentioned on more than one occasion.

scores

However, if you’re just establishing your credit, or if you’ve never really paid attention to your credit in the past, understanding what the FICO is and what it means can be challenging.

This article covers everything about FICO scores. It includes what they are, how they are calculated, the different types of FICO scores, and what they are used for. We also cover some other, less commonly used types of credit scores and how they compare to the FICO.

What is a FICO score?

FICO scores are the most commonly used credit scores by lenders to determine whether or not to approve you for a loan or a credit card.

The Fair Isaac Corporation gets information from all three credit reporting agencies (Experian, Equifax, and TransUnion). They use the information in your credit file to calculate three different FICO scores – one for each credit bureau.

As the information in each credit report changes, your FICO scores will change as well. This means they can change month by month or even day by day as your creditors report new activity on your account.

Multiple Versions of FICO Scores

FICO regularly updates the algorithm they use to calculate your FICO scores. When they do this, they update to a new ‘version’ of the FICO. Currently, the newest version is FICO 9. It has several changes to how certain items are factored into your credit score. In particular:

  • Paid collections no longer have a negative impact.
  • Medical collection accounts have less of a negative impact.
  • Rental history, when reported by your landlord, is now factored in. This change can help renters to establish a positive credit history even if they don’t have other forms of credit.

What are the types of FICO scores?

Beyond the regular changes that happen as their credit scoring model is updated, there are also several different types of FICO scores. Each one is designed to help lenders determine specific kinds of credit risk. The most common types are:

  • Auto Score – determines how likely you are to default on an auto loan or lease
  • Mortgage Score – determines how likely you are to default on a mortgage loan
  • Credit Card Score – determines how likely you are to default on a credit card or store charge card account
  • Installment Loan Score – determines how likely you are to default on a large installment loan
  • Personal Finance Score – determines how likely you are to default on a smaller installment loan

For all of these different types of credit scores, a special set of FICO scores is used, which is not on the same scale as the general FICO score.

In addition, these scores assess the likelihood that you’ll default in the next two years, but only for their specific focus. For example, an Auto FICO score will only measure the risk of your default on your auto loan, not your mortgage.

Multiple Versions of Industry-Specific FICO Scores

To further complicate matters, FICO regularly updates these special industry-specific credit scores to be more accurate. Like the general FICO score, there are multiple versions of each industry-specific FICO score.

What this means is that a typical person doesn’t just have one or two FICO scores. Instead, everyone has dozens of FICO scores.

This is one of the many reasons why one lender may decline a credit application while another approves the same application. Different versions of the same FICO score or the same type of score taken from different credit bureaus will almost always be different.

How are FICO scores calculated?

Fortunately, standard FICO scores are calculated using a fairly consistent method from one version to the next. The general breakdown of how your standard FICO scores are calculated is as follows:

  • Payment History – 35%
  • Amounts Owed – 30%
  • Length of Credit History – 15%
  • New Credit – 10%
  • Credit Mix – 10%

As you can see, the vast majority of it boils down to how well you pay your bills, how much debt you carry, and how long you’ve had credit in your name.

While the industry-specific scores will weight things a bit differently, these main factors will still be important in calculating your FICO scores.

Factors That Do NOT Impact Your FICO Scores

There are also several factors that Fair Isaac says are never part of the calculations that determine your FICO score. These items are:

  • Age
  • Gender
  • Salary
  • Location

Lenders may factor in how much money you make, what kind of job you have, or other outside circumstances when it comes to approving your application for credit. However, FICO does not take these into account when calculating your credit score.

How do I check my FICO score?

If you want to know what your FICO score is, you can check your score before going to a lender to have peace of mind.

The simplest way to get access to your FICO score is to order it. Unlike credit reports, you will have to pay for it, either through a third-party service or directly through Fair Isaac.

We recommend going directly through FICO if you need a full overview of the various credit scores. However, if you decide to go the third-party route, make certain the credit score you are purchasing is an authentic FICO score.

FICO Score vs. VantageScore

VantageScore is a credit score created by the three credit bureaus (Experian, Equifax and TransUnion) to compete FICO.

It has many similarities including using the same score range (300 to 850) and using past payment information to predict the risk of future defaults. However, there are a few key differences, including:

  • The VantageScore does not weigh paid collection accounts negatively. The latest version of the FICO also reduces the impact of paid collections. However, the new version of FICO is not widely used at the time of this writing.
  • The VantageScore counts late mortgage payments against your credit more than other types of delinquent payments.
  • If you are hit by a natural disaster, the VantageScore takes that into consideration
  • You have only 14 days to rate shop with a VantageScore – with a FICO, you may have up to 45 days to find the best loan.

Given that roughly 90% of lenders are still using FICO, VantageScore isn’t a major player yet. Need to know for certain whether or not a lender will approve your credit application? Check your FICO scores as these are the ones most likely to be used by any creditor you choose.

FICO vs. TransRisk

TransRisk credit scores are provided by TransUnion only, and specifically through Credit Karma. The algorithm of how the credit score is calculated and what factors into improving the credit scores isn’t well-known.

Aside from being freely available to consumers via the Credit Karma website, there is not much benefit to the TransRisk score.

It is not used by lenders or creditors, and therefore knowing your credit score isn’t useful for getting approved. It can, however, help you track the general improvement of your credit over time, so it can be useful as a monitoring aid if nothing else.

What’s a good FICO score?

What counts as a “good” depends on what you want to do with your credit. Do you want to be able to get a new home? A $25,000-limit credit card? A $5000 personal loan?

For each of these different scenarios, a different FICO score range applies when talking about a good score versus a fair one.

That being said, there are some rough and ready guidelines for determining what FICO score you need to get approved types of credit:

  • Mortgage – 640 is the minimum to qualify, 720+ gives the best rates
  • Car loan – 620 is basic rate, 740+ gives the best rates
  • Credit cards with low interest rates – 640 is the minimum, 720+ gives the best rates

Bear in mind that different lenders may pull your FICO score from more than one credit bureau. They may also use more than one version of the FICO to make their lending decisions alongside your personal financial history.

For those reasons, it is useful to shop around for the best rates, particularly when you know your credit scores are close to prime, or super-prime rates.

How can I improve my FICO score?

If on the other hand, your FICO scores are too low to qualify for the rates you deserve, there are several things you can do to boost your scores:

  • Reduce your credit card balances – Carrying a high balance can signal significant risk of default and lower your credit scores all around.
  • Make your payments on time consistently – a six-month history of on-time payments will raise your credit scores by several points
  • Remove negative accounts on your credit file – are there late payments that were actually on time? Multiple collection accounts for the same debt? Debt listed as higher than your records indicate? All of these are errors that are hurting your credit and getting them removed can help you to qualify for credit sooner rather than later.

Because there are so many different types of FICO scores, don’t be discouraged if the scores you’re seeing aren’t the same as the ones you see in the bank or the auto dealership – just be prepared to keep working at it, and building your credit over time.

What to Look for During a Self-Guided Apartment Tour

White and light wood L-shaped decorated kitchenA self-guided apartment tour allows you to explore a space at your leisure, taking your time to check out all the features or amenities the apartment has to offer. Learn how to make the most out of one of these self-guided tours, and ensure you cover all your bases before you sign a lease or make a deposit!

What to look for on a self-guided apartment tour

There’s really nothing that beats the in-person experience of walking through an available unit. A self-guided apartment tour is a flexible option that works with your schedule by allowing you to select a time to see the rental all on your own. But with this solo venture comes a bit more responsibility since you won’t have an agent or property manager there by your side.

Fortunately, we’ve come up with a list of five things to look for during your self-guided tour, so you can feel prepared to make the right decision for you.

1.The condition of the appliances

Appearances can be deceiving, especially when you’re looking at expertly-retouched photos taken for the sole purpose of renting a unit. As you’re doing research online, it may be hard to tell how updated the oven is or how well that fridge has been cleaned.

When you take the tour for yourself, be sure to inspect each appliance’s condition, even opening the door or cabinets to see what’s inside. If anything looks like it’s coming up at the end of its lifecycle, it may be worth asking about getting a replacement before you move in.

Additionally, before you even start the tour, ensure that you’re looking at the available unit rather than a model. If the property manager only allows you to walk through the model, take all the glam features with a grain of salt — models are often decked out with better finishes, appliances, and views than available units.

2. The closet and storage space

If a place is listed as a two-bedroom apartment, you can probably expect it to have two closets — but are there any extra drawers, linen closets, or shelves in the hallway or bathroom? Depending on how much stuff you’re moving in with you, the amount of storage space might be a make-or-break factor in your decision-making process.

During your self-guided tour, be sure to check out the dimensions of each closet. Consider whether your belongings will fit comfortably or whether you’ll need an apartment with additional storage potential.

3. The safety or security measures

Regardless of if you’re living alone, with a romantic partner, or with a group of friends, you’ll want to feel safe inside your home and within your apartment complex. Online listings often leave out information regarding the security measures around the property, which means it’ll be up to you to make some mental notes on your tour.

Is the building located behind a gate, with a special code to get in? Does the door to your apartment lead directly outside, or is there an exterior front door you enter to access each unit? Does the unit you’re renting face the street or the apartment courtyard? Everyone’s requirements for what puts them at ease will vary, so just make sure you feel comfortable with the situation as you envision yourself living there.

4. The neighbors

It’s easy to look at a picture of a beautifully furnished model apartment and get your hopes up without seeing it in-person. But what a photo can’t tell you is what kind of activity that residence brings with it. When you’re taking a self-guided apartment tour, listen for any loud noises in the hallways or stairwells, as well as the noise from neighboring buildings or businesses.

It could be that everything is quiet and respectful, but if you hear excess commotion, it’s something to think about (especially if you work from home or tend to spend the majority of your time there).

5. The parking arrangement

If and where there’s parking available will have a significant impact on your quality of life. After all, ease of parking makes it easier to walk to your apartment on dark nights, stormy days, or whenever you’re toting six bags worth of groceries in one trip! So when you’re touring a new complex, pay attention to where the cars are parked in relation to each building.

Is there a covered garage where you’re protected from the elements, or is there a private lot for residents to use? Where can overnight guests park? And can you pay a little extra to opt-in for a closer space? If these questions can’t be answered through your own observations, you’re smart to ask the property manager for additional clarity.

What to ask when searching for an apartment

Knowing which questions to ask before signing a lease is vital to finding an apartment you’ll thrive in. The following are just a handful of things you can bring up, but of course, feel free to ask whatever applies to your unique situation.

  • Are the lease terms negotiable (length of commitment, adding a roommate, etc.)?
  • Is the available unit a different layout than the model apartment you toured?
  • Are furnished apartments available?
  • Who do you contact for maintenance issues or repairs?
  • What are the consequences for a missed (or late) rent payment?
  • Are pets allowed, and if so, are there guidelines as to their size/weight?
  • Are there any group activities or outings for tenants in this building?
  • Do they offer any discounts for signing a long-term contract?
  • What do tenants say they love most about living here?

Love where you live!

Finding a new apartment can be a real challenge, especially if the space you rent turns out to look nothing like the model you toured a few months back. Next time, skip the unpleasant surprises by vetting your rental options with ApartmentSearch!

ApartmentSearch can help you secure your next place with ease, so you can focus on all the fun that comes with settling in. Check out our list of city guides and apartment resources today, and start planning your move in no time!

Source: blog.apartmentsearch.com