The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
PayPal is an online payment system that’s been a major part of online transactions since 1998, and you may have seen that they offer a credit card. Before applying for a PayPal credit card, it’s helpful to ask, “How much does a PayPal credit card affect my credit score?” Every credit card has pros and cons, and they can also have an impact on your credit score.
A good credit score helps you get lower interest rates on credit cards and can improve your financial well-being.
Read on to learn more about what a PayPal credit card is, how it affects your credit score and what score you need to improve your chances of getting approved.
How a PayPal credit card affects your credit score
Having a PayPal credit card can positively and negatively affect your credit score, depending on how you use it. Your credit score indicates how financially responsible you are to lenders and other businesses that check your score. Before learning how a PayPal credit card can affect your score, knowing how your credit score is weighted is beneficial.
One of the most popular scoring models is the FICO® scoring model, and it’s based on five factors:
Payment history (35 percent)
Credit utilization (30 percent)
Length of credit history (15 percent)
Credit mix (10 percent)
New credit applications (10 percent)
As you can see, your payment history is the most important aspect, so paying your credit card on time is crucial to having a good score. PayPal reports to the credit bureaus, so your activity will show up on your credit reports, which determines your score.
Should you miss payments on your PayPal credit card, it can negatively affect your score. Next is credit utilization, which is the percentage you owe based on your max credit limit. Making your payments on time and keeping your utilization percentage low are the best ways to have this credit card work in your favor.
How does PayPal Credit work?
A PayPal credit card works similarly to a regular credit card, but you don’t need the physical card when making online payments that have a PayPal option.
If the website accepts PayPal, the checkout option will show you the various accounts you have attached, like your bank accounts and your PayPal balance. If you have a PayPal credit card, it will show you the credit option as well.
You’ll also receive a physical version of the credit card, which you can use in person.
Similar to a regular credit card, you will receive a statement each month with all of your transactions and the minimum payment due. You can also pay the statement balance or current balance if you’d like to pay more than the minimum. To pay, you’ll use your PayPal balance or a linked bank account.
Does PayPal do a hard pull for a credit application?
Applying for a PayPal credit card triggers a hard inquiry on your credit report. New credit is worth 10 percent of your credit score and reflects how often you apply for new lines of credit. Multiple credit card applications in a short period indicate to lenders that you may have money problems and could struggle to make payments.
Although a PayPal credit card application will trigger a hard inquiry and reduce your score, it’s only temporary. Regular, on-time payments and low utilization will eventually balance out the negative impact of the hard inquiry. The inquiry will show as SYNCB/PPC on your report as well as on your credit card statements when you make purchases.
What credit score is needed for a PayPal credit card?
PayPal doesn’t list a specific credit score you need to get approved for their credit card, but in an article, they do say a score of 670 can help your approval odds for good credit cards. Now that you know that hard inquiries can lower your credit score, it’s helpful to get a free credit assessment. This includes your credit score and other helpful information about your credit health.
PayPal may approve you for a credit card with a score lower than 670, but a lower score often means that you pay higher interest fees when you make your purchases. Whether you’re applying for a PayPal credit card or other credit cards, it’s often helpful to use tools like a secured credit card to boost your score so you can get better interest rates.
Improving your credit score can help your PayPal credit card approval odds
PayPal has multiple credit cards to choose from, and one of them may be right for you. Before applying for a PayPal credit card, check your credit score. A hard inquiry into your credit report lowers your score, which you should avoid if you may be denied.
Fortunately, Lexington Law Firm offers a free credit assessment so you can check your credit score and other aspects of your credit health. We also offer credit repair services for those who may have errors on their credit report. Sign up to get your free credit assessment today.
So, pretend you’re wanting to rent an apartment in Phoenix, considering renting a house in Denver, or looking to move into a brand-new condo in Portland – and it’s time to submit your rental application. However, your poor credit history doesn’t qualify you to sign the dotted line alone, or maybe your income doesn’t meet the required threshold.
Depending on your circumstances, you might need someone else to co-sign your lease to qualify for the apartment. This ApartmentGuide article will help you understand the situations where a co-signer might be necessary and explain how having one can help you secure the rental you want.
What is a co-signer for an apartment?
A co-signer is a third-party, usually a person closest to you or a friend, who co-signs the lease with you. This person typically has a stronger financial standing,, has a robust credit history, and a good credit score.
As a co-signer, this third party has a legal obligation to pay if you default on your monthly rent. They don’t have to live in the apartment, but their name will be on the lease.
This arrangement serves as insurance for your potential landlord, especially if your credit check reveals a low credit score or an eviction history. It’s important to note that a co-signer is different from a guarantor, who merely promises to cover the rent if you fail to pay.
What does it mean to co-sign an apartment?
Co-signing an apartment means that you, as the co-signer, agree to share legal responsibility for the lease along with the primary tenant. As a co-signer, you are vouching for the tenant’s ability to pay rent and adhere to the lease terms. This includes covering any missed rent payments and potentially any damages to the property. Although you won’t reside in the apartment, your credit and financial history will be assessed during the application process.
Co-signing is a significant commitment because it involves a serious financial obligation to support the tenant and provide assurance to the landlord. If the tenant fails to pay rent or damages the property, you will be responsible for covering these costs. This means that any default by the tenant can affect your credit score and financial standing. Therefore, it’s essential to fully understand the risks and responsibilities before agreeing to co-sign an apartment lease.
When do you need a co-signer for an apartment?
But when exactly do you need a co-signer to secure your lease? Let’s explore the scenarios where having a co-signer might be necessary.
You might need a co-signer to secure an apartment lease if:
Low credit score: A credit score that falls below the landlord’s minimum requirement.
Insufficient income: Monthly income that doesn’t meet the landlord’s criteria, often less than three times the rent.
Lack of rental history: Little to no previous rental experience, especially for first-time renters.
Past evictions: A history of evictions on your rental record.
Unstable employment: Short-term employment history or frequent job changes.
High debt levels: Significant existing debt that impacts your ability to pay rent.
Citizenship: New to the country with no established credit or rental history.
Self-employment: Income that is harder to verify, such as being self-employed or freelance work.
Who should you ask to co-sign your apartment
The first people to approach are loved ones or close friends, who would be willing to do it.
It’s vital that they trust you, but you also trust them. They will have the same legal right as you to the apartment. This includes the ability to access the space, transfer the lease, and potentially live there if they choose.
It’s important to have an open and honest conversation with potential co-signers about your financial situation and the responsibilities they will be taking on. This ensures that they are fully aware of the obligations and risks associated with co-signing your lease. These risks include being held liable for missed rent payments and potential damage to the property, which could impact their own credit score and financial stability..
You should also discuss every scenario you can think of with your potential co-signer to ensure this won’t destroy your relationship. Signing a legal agreement to take on someone else’s significant amount of debt isn’t a simple favor.
What is needed from a co-signer for an apartment?
Now that you found someone to offer support and help you pay your rent, what do they need to complete the process?
The property manager will require the co-signer to submit a rental application, a background check, proof of income, and a report from at least one of the credit bureaus for a credit check.
Proof of income will include at least two documents to verify that the co-signer’s income covers their own housing and the tenant’s. They will confirm the co-signer paid all previous bills, there are no past evictions or issues with their credit.
What’s the difference between a co-signer and a guarantor?
You may hear these terms interchangeably, but there are some fundamental differences. Think of co-signing as just another person who has access to the apartment and is held responsible for the rent. Every month, both the co-signer and the tenant are equally accountable for the money as they are both on the lease.
A guarantor, however, does not have access to the apartment and is really just a “guarantee” that the landlord will get their money. Guarantors are responsible for the rent money only after the tenant defaulted on the rental property payments. A guarantor is there to alleviate the financial burden when you fall short.
The guarantor can take you to court for not paying your rent, as well.
What to do if you can’t find a co-signer
So, you’ve gone through everyone you know and no one can or will co-sign for you. You’re not entirely out of luck yet.
You can still make a case for yourself with the property manager. For instance, try explaining why you have this issue in your credit score and what you’re doing to fix it. If you try this, it’s important to show proof, like recent payment streaks on your credit report.
If that doesn’t work, see if you can negotiate with your landlord. Offer to pay more rent upfront or a larger security deposit.
What about co-signer services?
Be careful before signing anything if you’re considering co-signing companies. The service can act as a co-signer, but adds on a hefty fee to your monthly rent.Some services charge a one-time percentage of your rent, around 10 percent. While others charge a monthly fee that can equal up to 110 percent of rent payment.
Co-signing FAQs
Is it bad to co-sign for an apartment?
The short answer is no – as long as rent payments are made in full every month. For tenants, having a co-signer can help you secure a lease that you might not qualify for on your own. For co-signers, it’s important to understand that while co-signing itself doesn’t negatively impact your credit report, any missed or late payments by the tenant will. As long as the rent is paid on time, there will be no adverse effects on either party’s credit score.
Is it easier to get an apartment with a co-signer?
Absolutely. If the rental property accepts co-signers, it will be much easier for you to move in. Not guaranteed, but definitely much easier. This is particularly applicable for first-time renters (think college students), people on a credit-building journey, people with low credit scores or an eviction that was outside their control.
Are there alternatives to having a co-signer?
Some alternatives include offering a larger security deposit, paying several months’ rent upfront, or providing references from previous landlords or employers.
How to get around needing a co-signer for an apartment?
You can offer a larger security deposit, pay several months’ rent upfront, provide strong references, or look for properties with more lenient rental requirements.
How does co-signing affect your credit?
As the co-signer, co-signing can impact your credit positively or negatively. If the primary tenant pays on time, it can improve your credit. However, if they default, it can negatively affect your credit score.
How to take a co-signer out of your lease?
To remove a co-signer from your lease, you typically need to prove financial stability on your own, such as demonstrating a good credit score, stable income, and positive rental history. You will also need to get the landlord’s approval and possibly sign a new lease agreement.
Do you need a co-signer if you’re legally an adult?
You might need a co-signer if you’re legally an adult, especially if you have no credit history, limited income, or no prior rental history. Landlords often require a co-signer to mitigate the risk associated with younger tenants.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
It’s tough to afford a home these days. If you’re looking at a $275,000 mortgage, you’ll have a monthly payment of around $2,400 with today’s interest rates at 7% on a 30-year loan. You’ll need an income of about $80,000 per year to afford this mortgage.
This can change if you have a significant amount of debt, a low down payment amount, or a less-than-perfect credit history. We’ll run through a few scenarios to show you how much income is needed for a $275K mortgage.
Income Needed for a $275,000 Mortgage
The income needed for a $275K mortgage is around $80,000. If you have more debt, the lender will need to factor that in before calculating how much income you’ll need to afford the $275,000 mortgage. For example, if you have $400 in debt payments each month, you’ll need to earn more money each month to be able to afford the $275K mortgage and still stay within the 36% debt-to-income ceiling most lenders prefer. A closer look:
$2,402 (mortgage) + $400 (other debt payments) = $2,802 total debt payments per month
For $2,802 to be 36% of your monthly income, you would need to make $7,783 each month, or $93,400 per year to qualify for the $275,000 mortgage. This estimate is based on a mortgage calculator with taxes and insurance. If you would like to see what a lender can do for you, explore getting prequalified for a home mortgage loan.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
How Much Do You Need to Make to Get a $275K Mortgage?
How much income you need for a $275K mortgage also depends on your debt-to-income (DTI) ratio, down payment, loan type, lender, and credit score. Let’s take a look at these each in detail.
What Is a Good Debt-to-Income Ratio?
The gold standard for debt-to-income ratios is 36%. However, there are lenders who are able to originate loans for borrowers with a DTI ratio up to 45%. Lenders who fall outside the norm in DTI and credit score requirements will influence how much you need for a $275K mortgage.
What Determines How Much House You Can Afford?
Home affordability isn’t a simple equation. There are a number of factors that go into a lender’s decision about your loan.
Income
Reliable income is the largest determinant in loan approval. The more you make, the more you have to work with each month. However, your income and home affordability are affected by how much debt you have.
Debt
Your lender will take into account any monthly debt obligations you have. These will be added to the maximum DTI. If you have debt, your monthly mortgage will need to be lower.
Down Payment
A larger down payment can afford you a larger mortgage. If you’re able to put down 20%, you won’t need to pay for private mortgage insurance (PMI), which saves you money every month. However, 20% could be a big chunk of change to come up with, and most loans accept lower than a 20% down payment to start. See this mortgage calculator for examples.
Loan Type
Home affordability is also affected by the different types of mortgage loans. Fixed-rate loans will have a different monthly payment than adjustable-rate loans, for example. Likewise, the monthly payment on a 15-year mortgage is far different from the payment on a 30-year mortgage.
Lender and Interest Rate
Interest rates will vary from lender to lender. You may also see a different acceptable DTI ratio from lender to lender. When a lender is able to offer a lower interest rate, you’ll see your home affordability improve. When a lender has a higher acceptable DTI ratio, you may be able to qualify for a higher mortgage amount.
Recommended: Cost of Living by State
What Mortgage Lenders Look For
Worried about qualifying for a $275K mortgage? Here’s what your lender will look for during the mortgage preapproval process. These are right in line with home affordability requirements.
• Income Your income needs to be reliable and sufficient to qualify for the loan you want.
• Credit score A good credit score helps with approval and lower interest rates.
• Debt-to-income ratio Too much debt could prevent you from securing the loan you want. Before you apply for a loan, work on paying off debt as best you can.
• Down payment A higher down payment can help you qualify for a larger purchase price on a home. A down payment over 20% can help you avoid the monthly mortgage insurance payment as well.
• Loan-to-value ratio Lenders also want to be sure the property you’re buying qualifies for a loan. They don’t want to loan more on the property than it’s worth.
$275,000 Mortgage Breakdown Examples
Your individual situation will influence the income needed for the mortgage you want. Here are a few examples created with a home affordability calculator to show you how this works. In each case, the interest rate is 7% on a 30-year mortgage.
With no debt
• Principal and interest: $1,830
• Taxes and insurance: $573
• Total monthly payment: $2,403
Income needed to afford the monthly payment: $6,672 per month, or $80,064 per year.
Assumptions: 20% down payment. The original purchase price would be $343,750 to get a $275,000 mortgage with a 20% down payment.
With $1,000 per month in debt
• Principal and interest: $1,830
• Taxes and insurance: $573
• Total monthly payment: $2,403
Add monthly debt obligations to the monthly mortgage payment. $2,402 + $1,000 = $3,402 monthly debts.
Income needed to afford the monthly payment: $9,450 per month, or $113,400 per year.
Assumptions: 20% down payment. The original purchase price would be $343,750 to get a $275,000 mortgage with a 20% down payment.
With no down payment and $600 in monthly debt payments
• Principal and interest: $1,830
• Taxes and insurance: $458
• PMI: $252
• Total monthly payment: $2,540
Add monthly debt obligations to the monthly mortgage payment. $2,540 + $600 = $3,140
Income needed to afford the monthly payment: $8,722 per month, or $104,664 per year.
Assumptions: No down payment. The original purchase price would be $275,000.
Pros and Cons of a $275,000 Mortgage
Pros
• Lower mortgage payment than for the median home price in the U.S.
• Lower income requirement than a higher-priced mortgage
Cons
• Few homes can be found for $275,000
• May still be unaffordable for many families
How Much Will You Need for a Down Payment?
If you’re deciding how much of your hard-earned money to put down for a down payment on a property that you plan to buy with a mortgage of $275,000, here’s how it breaks down by loan program.
Program
Minimum down payment percentage
Amount for $275,000
VA, USDA
0%
$0
Conventional
3% or more
$8,250 or more
FHA
3.5% or more
$9,625 or more
Keep in mind, when you make a payment lower than 20%, you’ll need to pay PMI each month. For some loans, like the Federal Housing Administration (FHA) mortgage, you’ll need a mortgage refinance to get rid of PMI.
Can You Buy a $275K Home With No Money Down?
Yes, you can buy a $275K home for no money down. The two main programs that don’t require a down payment include:
• VA (U.S. Department of Veterans Affairs) mortgages
• USDA (U.S. Department of Agriculture) mortgages
Beyond these two programs, you may also find local housing programs that offer down payment assistance that may be able to help get you into a home with no money down (or close to it).
Can You Buy a $275K Home With a Small Down Payment?
Since a $275K mortgage loan falls under the conforming loan limits, it qualifies for loan programs with lower down payment requirements. These include conventional financing with a minimum 3% down payment for qualified first-time buyers, FHA with a 3.5% minimum down payment, as well as VA and USDA loans which have no down payment requirement.
Recommended: Best Affordable Places to Live
Is a $275K Mortgage with No Down Payment a Good Idea
It’s possible to get a $275K mortgage with no down payment. It also may help you get into a home that you otherwise wouldn’t be able to.
If you’ve run your numbers through a mortgage calculator and have worked closely with a lender to determine if the monthly payment is affordable for you, you shouldn’t hesitate to get a mortgage with no down payment.
The major downside to getting a mortgage with no down payment is the amount of mortgage insurance you’ll pay every month. That will need to be factored in when the lender determines how much mortgage you’ll be able to afford.
Can’t Afford a $275K Mortgage With No Down Payment?
If you still have a little work to get qualified for a $275K mortgage, especially if the cost of living in your state is high, there are some smart moves you can make to help your odds of approval.
Pay Off Debt
You may qualify for more house by paying down debt. Let’s take a look at our previous examples:
With no debt, a $275K mortgage will cost $2,402 per month, and you’ll need to earn $6,672 per month, or $80,064 per year.
With $1,000 monthly debt obligations, a $275K mortgage will have a total of $3,402 monthly debts and you’ll need $9,450 per month, or $113,400 per year to afford a $275K mortgage.
With a reduced debt load of $600 instead of $1,000, and a $275K mortgage, you’ll have a total debt load of $3,002. You’ll need $8,339 in income per month, or $100,067 per year to afford your debt load. This is much less than the previous example where the debt load was $1,000 per month.
Look into First-Time Homebuyer Programs
Most states and local housing programs have some type of first-time homebuyer program. It may be a down payment assistance program or a forgivable second mortgage that helps cover closing costs.
Build Up Credit
There’s nothing you can do about the current interest rates, but you can work on your credit to get the best rate you can. A better credit score translates into a better interest rate almost every time, which helps immensely with affording a $275K mortgage.
Start Budgeting
Good old-fashioned budgeting can help you zero in on your goals and save a large enough down payment to afford a $275K home. It helps to think of budgeting as a tool for achieving goals, rather than a punishment or restrictive way of life.
Alternatives to Conventional Mortgage Loans
If you’re not able to qualify for one of the different types of mortgage loans just yet, you might want to look into the following alternative financing methods:
Seller financing Seller financing is where the seller agrees to carry the mortgage and acts as lender. Usually, it’s a short-term agreement and the seller may charge a higher interest rate than what a traditional lender would. The details of the arrangements are made between buyer and seller, and can be quite complex. But it also avoids many closing costs and can be a faster transaction than a traditional sale.
Private lending A private lender is any lender not associated with a bank or lending institution. They may be more flexible with qualification and offer a wider range of lending tools, such as bridge loans to help you get from one house to another.
Recommended: Home Loan Help Center
Mortgage Tips
Getting a mortgage is intimidating at first. Once you’re done reading tips to qualify for a mortgage, you’ll want to start talking to lenders. Here’s what you’ll do to find the best rate.
1. Shop around for a loan. Shopping around for a loan within a 45-day window only counts as a single credit inquiry on your credit report, so you can check out as many mortgage lenders as you want. This can help you find one with a great deal and terms that work for you.
2. Compare loan estimates. A loan estimate is a document that outlines the different loan costs the lender charges. You’ll be able to compare origination fees, underwriting fees, and other closing costs in determining which loan will work best for you.
3. Don’t get caught up in analysis paralysis. After you’ve looked at a handful of lenders, it’s time to pick one. Make a decision and go forward with excitement about moving into your home.
The Takeaway
Affording a home in today’s economy seems hard, and the amount of income needed for a $275K mortgage may feel like a heavy lift. But it’s not impossible to qualify for the mortgage you want. Even after you’ve worked out all the numbers online, you’ll still want to talk to a lender. They may have more options than you’d expect, and it’s worthwhile to start the process sooner rather than later.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Can I afford a $275K house on a $60K salary?
If you have a large enough down payment, you may be able to afford a $275,000 house on a $60,000 salary. For a $5,000 monthly income, you’ll need your mortgage amount to be around $1,800. To get to that payment, you’ll need a 20% down payment ($55,000) and a 6% interest rate (if rates don’t drop to that level, you can buy down your rate by paying mortgage points to your lender).
How much does a $275K mortgage cost over 10 years?
With an interest rate of 7%, a $275,000 mortgage will cost $383,158 over 10 years. So your total interest paid on this loan will top $108,000.
What credit score is needed to buy a $275K house?
Your credit score is only one factor in determining whether or not you can afford to buy a $275K house. FHA loans, for example, allow borrowers with credit scores as low as 500 (with a 10% down payment) and 580 (with a 3.5% down payment) to apply. Lenders also look at your debt-to-income ratio, income, employment history, and loan-to-value ratio.
Photo credit: iStock/FG Trade Latin
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
While not all of Gen Z may be financially ready or old enough to buy a home, many are exploring their options, making it essential to understand the basics of real estate to navigate these decisions wisely. Here’s our guide to the basics you should know about the home-buying process, once you’re ready to make the plunge.
When Is The Best Time To Buy?
Choosing the best moment to buy might be difficult. The financial turmoil of the 2007-2008 housing crisis and the dangers of purchasing a home at the wrong time —and with inadequate funds—are vivid memories for a large number of Millennials and Gen Zers. But instead of letting that deter you from making a purchase, it’s crucial to take some time to consider your unique situation and gain as much knowledge as you can about the process.
The best time to buy a home largely comes down to individual circumstances and your financial readiness. Ensure you have a stable income, manageable debt levels, and a good credit score before browsing for homes.
You’ll also want to stay on top of local market conditions. Some useful questions to ask a real estate professional include how recent trends in interest rates might impact mortgage affordability, what the current competition is like for homes in your desired area, and what the typical closing costs and timelines are for home purchases in your city. These factors can all influence the timing and success of your home purchase.
Employment History
From the standpoint of the lender, as well as to make sure you’ll be prepared for the financial demands of homeownership, a consistent work history is crucial. Even though a lot of lenders demand two years of prior work experience, keep in mind that a college education can contribute to that ideal pattern. Past tax returns and profit and loss statements are necessary for self-employed or gig workers to prove a steady income.
Credit Scores
Make sure your credit score is as high as it can be if you haven’t already. Get copies of your credit report as soon as possible from all of the main reporting organizations. Pay your debts off, pay your obligations on time, and make sure your credit report is accurate.
Evaluate Your Expectations
A good real estate agent will help you determine what is essential and what is optional. Recall that your first house is just a place to start when building equity; it doesn’t have to be your permanent residence. Being flexible with your expectations and keeping an open mind can give you an advantage when looking for a home. You could also think about less expensive places, out of big cities and wealthier communities. This will likely decrease your cost of living as well, even by just a bit. Even a slightly lower monthly mortgage payment can make a significant difference in your budget and overall affordability.
Tax-Free Savings Account
Invest in a TFSA to increase your tax-free savings for a down payment on a house. There is no tax on any interest, dividends, or capital gains received within the account. To increase your savings in a tax-efficient manner, take advantage of employer-sponsored retirement programs like RRSPs (Registered Retirement Savings programs). On payday, schedule automatic transfers from your bank account. Ten percent of your wage, for example, is a good starting point, and you can raise it gradually over time. By doing this, you’ll be able to monitor your development and keep the money for other needs.
Are you looking to enter the real estate market this summer? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
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Contact us today to talk to a Realtor in your area
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Credit card fraud and identity theft are major problems for people throughout the United States. In 2023, the Federal Trade Commission (FTC) received over 410,000 reports of credit card fraud. One solution to this problem is to use the best credit monitoring services.
In addition to helping you spot fraud, they’re also a great tool to use when you’re trying to improve your credit. Here, we teach you about what credit monitoring is and how to find the best services.
What is credit monitoring?
Credit monitoring is a great way to stay informed about everything happening with your credit report and your credit score. Credit monitoring is a tool to stop identity theft before it’s too late, but these services monitor other aspects of your credit as well. This can include:
Credit utilization
Missed payments
New credit accounts
New credit inquiries
Many different factors affect your credit score, and credit monitoring companies offer an all-in-one service to help you stay up to date.
What are the benefits of credit monitoring?
Credit monitoring services track your credit score and credit report. Many people take steps to prevent identity theft, but it can still happen. The problem many people run into is that they catch it too late. Using credit monitoring services can help you detect identity theft early on so you can take action.
Credit monitoring is also helpful because it alerts you to changes to your credit report, and if you’re trying to improve your credit score, this is a simple way to see what’s helping or harming your credit.
Sometimes, your information is stolen from a company that also has your data. For example, a report from the Identity Theft Resource Center (ITRC) shows that there were over 1,800 data breaches in 2022 that affected 422 million people total.
Not only can this type of fraud harm your credit, but those who steal your information can use it to create new accounts that may put you in debt.
Do free credit monitoring services work?
Free credit monitoring services are available, but they require a more do-it-yourself approach. The free services provide information about your credit score and report, but they won’t act on your behalf. For example, if you receive an alert about identity theft, you should freeze your credit accounts.
The free services may not monitor all of the major credit bureaus, either. Some of these services only check one or two bureaus. Your score may be different for different bureaus, so it’s important to keep an eye on all three.
On the other hand, paid services typically provide:
Advanced alerts: Some paid services will tell you if your information is part of a data breach or is on the dark web. They may also monitor bank account activity and public records.
More frequent credit updates: Free services may only update your credit score once a month, but some paid services update daily or weekly.
Identity theft protection: Many paid services include ID theft insurance for additional protection.
If you don’t mind doing some of the work, some of the free services may be right for you. You can try a paid service for some additional credit monitoring features and services.
How to find the best credit monitoring service
There are many different credit monitoring services to choose from. They can vary by price as well as the tools they offer. Each person’s situation is different, so choosing the best credit monitoring service depends on what you’re looking for.
Consider the following before choosing one:
Cost: You should compare prices, but also keep in mind that the least expensive option may not be the best option.
Free trials and guarantees: Some services offer a free trial or money-back guarantee.
Credit-building tools: If you’re trying to build credit, look for services that provide tools like additional credit reporting and credit monitoring.
Credit report and score updates: The frequency of updates may differ from service to service.
Additional monitoring: You may not be aware of data breaches or other situations where your information is leaked. If this is a concern, additional monitoring can help.
Discounts: There are some services that offer discounts for families looking for credit protection and monitoring.
Should you pay for a credit monitoring service?
For those who pay for a credit monitoring service, it can be worth it and can also offer some additional peace of mind. Many of the paid services provide additional monitoring and protection in the case of identity theft. They can also take on the task of freezing your credit cards if your identity is stolen.
Each of the credit monitoring services offers different tools, so it’s important to decide which ones matter the most to you.
Credit monitoring services from the credit bureaus
The three major credit bureaus are TransUnion®, Experian® and Equifax®. Keep in mind that they often cost more than other services while providing less value, and they may not have high levels of security to protect your information as well. In the past, there have been major news stories about data breaches leaking customer information, many of which have resulted in a settlement for affected customers.
What credit monitoring services can’t do
Before signing up for a credit monitoring service, it’s helpful to know the limitations of these services as well. While credit monitoring can help provide you with alerts and some protections, there are things they can’t do.
These services are unable to prevent:
Someone opening up accounts in your name
Identity theft
Credit card fraud
Taxpayer identity theft
Credit repair services
Can credit monitoring prevent identity theft?
Credit monitoring services can’t prevent identity theft, but they’re useful for knowing when it happens. The consequences of ID theft get worse as time goes on. When you’re unaware of the theft, nefarious individuals can put you further into debt, open up new accounts and commit other illegal acts with your information.
When you use credit monitoring, you can apply a credit freeze to your accounts before things get too bad. Preventing identity theft requires additional due diligence. This can include:
Avoiding phishing emails designed to steal your information
Using complex passwords
Not reusing passwords for multiple accounts
Keeping your information private whenever possible
Is credit monitoring right for you?
Everyone can benefit from credit monitoring. It helps you keep tabs on your credit score and report, which is an important aspect of improving and maintaining a good credit score. In addition, credit monitoring also lets you know if there are issues like derogatory marks or errors on your report, and it can help you spot identity theft. So the primary question you should ask yourself is whether you can benefit from the additional tools a paid service provides.
Get started with credit monitoring today
At Lexington Law Firm, we offer credit repair. As a client, you also have access to credit monitoring, identity theft insurance, creditor interventions and lost wallet protection. To get started with credit monitoring, sign up today. We also offer a free credit assessment so you can see exactly where your credit score is at.
ChexSystems is a nationwide credit reporting system that collects information about bank accounts that are now closed. It compiles data on red flags, such as whether a bank account was closed due to numerous overdrafts or suspicious financial transactions.
Many (but not all) financial institutions rely on ChexSystems data to decide whether or not to approve an application for a new checking or savings account. If you have a bank account or plan to open one, it’s helpful to understand what goes into a ChexSystems report and why it might matter to you.
What Is ChexSystems?
Authorized by provisions in the Fair Credit Reporting Act (FCRA), ChexSystems is a risk-management tool for financial entities that are checking an individual’s banking history.
ChexSystems compiles information that can help financial institutions gauge whether a customer is creditworthy before granting them an account. The information that ChexSystems compiles is based only on closed accounts, not current ones, and can reveal whether past accounts were closed voluntarily or due to negative behavior, such as repeated overdrafts or suspected fraud.
Negative marks typically stay on a ChexSystems report for up to five years. If a financial institution sees any kind of negative activity on a ChexSystems report, the applicant may be denied a bank account.
The information in your ChexSystems report can also be used to generate a ChexSystems consumer credit score. This is separate from consumer credit scores generated using information from the three major credit reporting bureaus to help lenders decide who may qualify for a loan.
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What Is In a ChexSystems Report?
Not everyone will have a file with ChexSystems. Those who have a clean banking record may not be listed. However, those who have had bank accounts closed in the past for negative reasons will likely have a report with ChexSystems.
A report will usually include basic identifying information, such as name, address, phone number, and date of birth. It will also include details about your banking history, such as:
• Suspected fraudulent activity
• Non-sufficient funds (NSF) or overdraft activity
• Inquiries (when someone has viewed your ChexSystems report)
• Check cashing inquiries
• Returned checks reported by retailers
• History of checks ordered
• Checking account closures
ChexSystems only collects information for closed accounts, and negative behaviors typically stay on file for five years, as noted above. Current checking accounts do not show up on a ChexSystems report.
Worth noting: If you’ve ever had a security freeze in place, that will usually show up on your ChexSystems report, as will identity theft alerts.
Recommended: Why Is Having a Good Credit Score Important?
How to Get a Copy of Your ChexSystems Report
You can get a copy of your ChexSystems report for free once every 12 months under the Fair and Accurate Credit Transaction Act (FACTA), similar to the way you can request a free copy of your credit reports once a year from the three main credit bureaus.
You can request your ChexSystems report online, by phone, or by mail:
• You can complete and submit the Consumer Request for Disclosure Form online.
• You can call 1-800-428-9623 Monday through Friday, 8:00 am to 7:00 pm CST.
• You can mail a Consumer Request for Disclosure Form to ChexSystems, Inc., Attn: Consumer Relations, PO Box 583399, Minneapolis, MN 55458.
ChexSystems also offers options for people with visual or hearing impairments. In addition, the ChexSystems website details ways to obtain a report for those under age 18 or for an adult for whom you have power of attorney.
There is an exception to this “once a year” free report rule: If you’ve been denied a bank account, you can request a copy of your ChexSystems report to understand the factors behind the bank’s decision, even if less than a year has passed since the last time you pulled a report. The bank is required to specify the reason for the denial, too.
How to Clean Up Your ChexSystems Report
To clean up your ChexSystems report, you’ll first need to get a copy of it, if you haven’t done so already. You can then dispute any negative information you may find. This can help improve your ChexSystems profile if you can get the information removed.
You can reach out to the bank that shared any negative information about your past account and offer to make good on any outstanding obligations. The bank could agree to remove the negative information.
Going forward, you can prevent any further negative information from being reported by practicing good banking habits, such as:
• Maintaining positive balances across accounts so you don’t land in overdraft
• Keeping of checks and deposits to avoid bounced checks
• Protecting your banking information to prevent fraud
• Reporting any suspected fraud to your bank right away
Those actions won’t erase a negative ChexSystems file. But they can help you to stay on your bank’s good side.
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Does a ChexSystems Report Affect Your Credit Score?
Your ChexSystems report doesn’t affect your consumer credit scores directly. FICO® credit scores, for example, are based on how responsibly you manage credit and debt. For example, it can reveal how often you pay bills late, how much of your available credit you’re using, and how often a hard credit inquiry shows up on your report.
Those are some of the main factors that affect credit scores.
But there could be a ripple effect. If your ChexSystems report makes it difficult or impossible to open a bank account, you might have a hard time paying bills when they are due. If, as a result, you send payments late, that could lower your credit score.
Options if You’ve Been Denied a Bank Account Due to ChexSystems
If you’ve been denied a checking account because of a negative ChexSystems report, it helps to know what to do next. You have a few options:
• Clean up your ChexSystems file. Request a copy of your ChexSystems report to understand why you were denied. Review your report for any errors or inaccuracies, and dispute any errors you find. Or, if you owe a debt to your previous bank, you could pay it off and request that the bank remove the mark against you.
If successful in cleaning up your report, you can ask the financial institution you recently applied to if they would reconsider the denial. You might also try opening a savings account with the new bank first, see if you can build a relationship, and then add a checking account.
• Try another bank. Find a bank that doesn’t rely on ChexSystems reports to evaluate potential clients. They are out there and can be found with a little research.
• Consider a second chance bank account. These are designed for people who have been denied a checking account previously. These accounts may have higher fees or more restrictions than regular bank accounts. They can, however, help you establish a positive banking history and, if managed well, transition to a standard checking account in the future.
• Use prepaid debit cards in the short term for spending and bill payment. You can load funds onto these cards (which typically charge fees) and then take care of daily needs with that money.
The Takeaway
ChexSystems is a nationwide reporting system for closed bank accounts. Qualified institutions may access ChexSystems reports to evaluate individuals who are applying for new checking or savings accounts. Being listed in ChexSystems means you likely have negative incidents on your closed accounts (e.g., overdrafts, fraud, unpaid negative balances). This can prevent you from opening new accounts. In this situation, you can focus on cleaning up your ChexSystems report or try some workarounds so you can manage daily financial transactions.
SoFi is among the banks that do not rely on ChexSystems when reviewing account applications.
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FAQ
What happens if you are on ChexSystems?
If you have a file on ChexSystems, you may find it hard to open a bank account. ChexSystems gathers negative information about past bank accounts, such as past overdrafts or involuntary account closings.
Can you remove yourself from ChexSystems?
It may be possible to remove yourself from ChexSystems if your report includes information that’s inaccurate or reported in error. You’ll need to dispute the information through ChexSystems in order to have it corrected or removed from your file. Or if, say, you owe overdraft charges on a now-closed account, you could contact your former bank, pay what you owe, and see if they would remove the negative information from ChexSystems.
How do I know if I am in ChexSystems?
You can request a free copy of your ChexSystems report annually. If there is a report on file for you (those in good standing may not be listed), getting this record can reveal the details of negative information.
How long does a person stay in ChexSystems?
Generally, negative information can stay on a ChexSystems report for up to five years. If you have multiple negative items on your ChexSystems report, the five-year reporting time frame applies separately to each one.
Which banks report to ChexSystems?
ChexSystems doesn’t specify which banks use its reporting system. If you’re unsure whether a bank reports to ChexSystems or reviews ChexSystems reports when you apply for a new account, you can call the bank and ask. You can also ask whether second-chance banking is an option, in case you’re denied a traditional bank account.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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For many Americans, one of the best ways to get closer to their ideal annual income is to learn how to make money online.
According to a 2024 study from Smart Asset, individual Americans need an annual salary of $96,500 to live comfortably in a major city, and families with two children need to make about $235,000.
However, the Bureau of Labor Statistics (BLS) recently reported that the weekly median earnings for Americans was $1,139. This makes the median annual salary a little less than $60,000—far below the annual cost of living in many cities.
Some leverage the thriving “gig economy,” where you find contracted gigs in a virtual marketplace, and others generate passive income. Regardless of your skill set and interests, you’re sure to find something that works for you.
We put together a list of 27 different ways you can make money from home to supplement your income. You’ll also learn what it takes to get started and whether or not it’s right for you.
1. Find miscellaneous freelance jobs
A great place to start when learning how to make money online is by looking at platforms that offer a wide range of work. Before diving into the rest of the list, it’s helpful to know about popular platforms like Upwork and Fiverr. Every day, people and companies post jobs you may be perfect for.
At these sites, you can type in some of your various skills to see if any jobs are available. You can also create a detailed profile marketing your skills so people can find you more easily and offer you work.
Best for: People with a wide range of skills.
What you need to get started: Skills will vary depending on the specific job.
2. Take online surveys
Many companies out there want to get opinions from specific demographics and will pay you to take these surveys. While these don’t pay as much as many of the other options on the list, they also don’t take that long to do, so they are a simple way to make extra money. You can sign up to take these surveys at websites like Survey Junkie or Swagbucks.
Best for: Anyone with access to the internet.
What you need to get started: Access to a web browser.
3. Perform data entry
Data entry is a skill that many people can learn if they don’t already have experience. Doing data entry typically involves inputting data from different sources into a spreadsheet. Sometimes, you can find businesses looking for long-term workers, which can offer a little more stability than finding “gig work.” In addition to sites like Upwork and Fiverr, you can find data entry work at TechSpeed and Oworkers.
Best for: Well-organized individuals.
What you need to get started: Some proficiency with spreadsheet programs like Excel and Google Sheets.
4. Become an online tutor
For teachers looking for online side hustles, becoming an online tutor is a great option. Even if you’re not a teacher, you may be able to find some subjects that you can help students with. The platforms that link tutors with students usually cover school subjects like math, English, foreign languages, writing, and more. You can sign up to tutor on websites like TutorMe, Skooli, and Preply.
Best for: Those who love to teach.
What you need to get started: Experience teaching and expertise in the subject matter.
5. Be a virtual assistant
Many businesses of all sizes need additional help, so they hire virtual assistants. Virtual assistant tasks can vary depending on the gig. Some of these opportunities may be for one day of work, but others may need help for longer stretches of time.
These may pay you per job or per hour, and you can find these gigs on any freelance website. As of 2024, the average hourly rate for virtual assistants is $24 per hour and can be upward of almost $34 per hour.
Best for: People with a wide range of skills.
What you need to get started: Skills will vary depending on the specific job, but some skills can be helpful for many gigs like project management, organization skills, and data entry.
6. Get paid for your perspective
Focus groups are a key aspect of marketing, but it’s no longer just for new products hitting store shelves. In the digital age, companies are looking for people to review the user experience for their websites.
Sites like UserTesting pay you to share your opinions about different products from a variety of different brands. There are also sites like Userbrain that allow you to test different websites, applications, and software.
Best for: Individuals who like sharing their opinions.
What you need to get started: Access to a web browser.
7. Rent out your stuff
Do you have things that you don’t mind renting out? Well, websites like FriendWithA connect you with people who are looking to rent various items. Some of the main items people rent include cameras and film equipment, tools, generators, bikes, and other items people may only need for a day or two.
Best for: People with items they aren’t regularly using.
What you need to get started: Items in good condition to rent.
8. Rent out a room
In addition to apps like Uber, Airbnb is one of the most popular platforms in the new “sharing economy.” Many people use Airbnb as an alternative to hotels while traveling, but some people need a room to rent for longer periods.
Joining a platform like Airbnb allows you to make use of the extra room in your home for both travelers and long-term renters.
Best for: People with an extra room or home.
What you need to get started: A well-maintained room or home.
9. Sell used items
Selling used items is one of the best ways to make money because we all have things we no longer use. You no longer need to have a garage sale to sell your old items because there are platforms that can help you find buyers. There’s a long list of platforms that allow you to sell your used items like:
One of the primary advantages is that you’re no longer limited to your neighborhood and can reach a larger pool of potential buyers. If you have unique novelty items you’re willing to sell, you may want to consider a platform like eBay, where people are regularly looking for hard-to-find items. This is also a great way for kids to make extra money by selling old toys.
Some of these sites are also a great way to make money fast online because they have quick payouts once an item is sold. If the buyer is local, you can get paid the same day.
Best for: Those with old items they no longer need.
What you need to get started: Supplies to ship orders or transportation to deliver locally.
10. Sell graphic design services
There’s no shortage of graphic design jobs, and you can find these jobs through freelance websites or directly with businesses. Many businesses of all sizes need people who can design advertisements, logos, and more. If you’re a graphic designer, it may be a good idea to create a website that hosts a portfolio of your work where people can contact you directly as well.
Although it’s helpful if you have a background in graphic design, you can learn many graphic design skills on your own. There are many helpful tutorials for popular programs like Photoshop on YouTube and other social media sites.
Best for: Graphic designers.
What you need to get started: Graphic design software.
11. Create online courses
Is there something you know quite a bit about that you can teach to others? If so, you can create and sell online courses. From work-related topics to yoga to parenting strategies, offering classes for something you are a subject matter expert in can help you make money while doing something you love! Some of the best websites to sell your courses include Udemy, Skillshare, and Teachable.
You may want to familiarize yourself with online course platforms because they are a great resource to broaden your skills. If you’re willing to invest some time and a little money, there are many courses to teach you new skills that you can turn into more ways to make money online.
Best for: Those who love to teach.
What you need to get started: Expertise in the subject matter you want to teach.
12.Self-publish books
There are many ways for writers to make money online, and writing books is easier than ever. You no longer need to go through a publisher to make money selling books. Today, there are many different websites that allow you to self-publish and sell your books.
The most popular site is Amazon’s Kindle Direct Publishing (KDP), but you can also sell your books on websites like Apple, Google Play books, Kobo, and more. If you have a microphone, you can turn your books into audiobooks as a way to make even more money from your writing.
Best for: Writers.
What you need to get started: Writing software.
13. Start a blog
Blogging became big as a way to make extra money online in the early days of the internet, and it’s still very viable. The great thing about blogging is that you can write about anything you’re interested in and just need to find others who are interested in the same topic.
There are different ways to make money from a blog. You can create your own website and sell Google Ad space or find sponsors. You can also use platforms like Medium, which has a built-in audience, and you can earn revenue as more people read your posts.
Best for: Those who like to write.
What you need to get started: Writing skills and knowledge about a topic.
14. Do freelance writing
Although many news outlets and websites have dedicated journalists, there is also a lot of work out there for freelance writing. Some of the biggest websites out there, from the Washington Post to the New York Times, take submissions from freelance writers.
One of the best ways to find freelance writing work is by following editors on X (formerly known as Twitter). They’ll often post asking for people who can write on a specific topic. Sometimes, these gigs will pay hundreds of dollars for a single article. If you’re a fast writer and can write articles within a couple of hours, you could earn an hourly rate of $100 an hour or more.
If there’s a specific website you’d like to write for, just check and see if they have a page that tells you how to submit pitches for articles. Keep in mind that each publication pays different rates, and sometimes, the work can be inconsistent.
Best for: Writers. What you need to get started: Writing software.
15. Find voice-over work
There are many people looking for voice-over work in advertisements, presentations, or audiobooks. If you can read a script, there may be people out there who will hire you for your voice work. Freelance platforms like Upwork often have miscellaneous voiceover job postings, but you can make more with longer-form content.
ACX is the platform Amazon’s Audible uses for authors to find people to read their audiobooks. The prices vary, but you can sometimes make significantly more there than on the freelance websites.
Best for: Anyone with a great voice.
What you need to get started: A microphone with good quality.
16. Sell arts and crafts
There are many different marketplaces online for those who love making arts and crafts. One of the most popular marketplaces is Etsy, and there’s a market for just about anything you enjoy making. You can make your own prices, and the platform takes a small percentage of the sale.
Best for: Creatives and artists.
What you need to get started: Materials to create items.
17. Sell stock photography and videos
Have you ever wondered where websites get their high-quality photos or videos? Many of them don’t have in-house photographers or videographers. They buy stock photos and stock video footage for a variety of projects.
For those who love photography and videography, there are a variety of websites that will buy your photos and videos. Websites like SmugMug Pro, 500px, Getty Images, and many others will pay you for the rights to your photos and videos.
Best for: Photographers and videographers.
What you need to get started: A camera.
18. Sell royalty-free music
Similar to photography and videography, many websites will pay you for your music. This type of music goes in the background of YouTube videos, advertisements, and anywhere else people may need some background music. Websites like Epidemic Sound and Pond5 are good places to start when it comes to selling your tunes.
Best for: Musicians.
What you need to get started: Instruments and recording equipment. Royalty and licensing information is available on the websites.
19. Create an e-commerce website
There are many websites that allow you to sell your product, but each one takes a percentage of the profits for using their platform. You can keep a larger portion of your profits by creating an e-commerce website.
When you create your own website, you’ll hold onto most of the profits. One of the most popular ways to sell is with Shopify, which easily plugs into your website. Shopify and similar services have fees as well, but it’s less than using a platform like Etsy.
The primary downside is that marketplaces like Etsy have a built-in user base, so you would have to do your own marketing to get the word out about your website.
Best for: People with something to sell who want a larger portion of the profits.
What you need to get started: The ability to create a website.
20. Utilize affiliate links
Affiliate links are a way to make additional money that work in conjunction with many of the other jobs on this list. An affiliate link is a special link that you use for a product or service from a company, and each time someone uses your link, you get a commission. This is how many stay-at-home parents popularized blogging in the 2000s. You can easily make passive income by using affiliate links with any of the following:
Personal blogs and websites
Social media profiles and content
Podcasts
In an interview with Business Insider, creative entrepreneur and YouTuber Roberto Blake explained how he started making $5,000 a month from affiliate marketing. “I fell into affiliate marketing from the Amazon affiliate program, but then I realized a lot of subscriptions and software I was using had programs, too,” said Blake while discussing additional ways to do affiliate marketing.
Best for: Those who also make money from creating a platform like a blog, YouTube channel, or podcast.
What you need to get started: Discussing other products and services that you can link to.
21. Edit audio or video
There are many different job postings on freelance websites for audio and video editing. Many companies find freelancers through sites like Upwork and Fiverr to help them with their marketing content.
In addition to companies hiring audio and video editors, many social media influencers on platforms like YouTube and TikTok outsource their editing. Podcasters often hire audio editors as well.
This is another one of the skills that you can potentially learn if you don’t have experience yet.
Best for: People who enjoy editing audio and video.
What you need to get started: Software to edit audio and video.
22. Edit copy
People are always looking for editors. Whether it’s an author looking for someone to edit their next book or a company that needs an editor for something they’re publishing for the public, people need their words to look excellent. Previously mentioned websites like Upwork and Fiverr regularly have jobs for editors, but you can also find work at Reedsy and Wordvice.
Best for: Those who love language.
What you need to get started: Familiarity with the English language and various types of grammar rules, such as Chicago or AP style.
23. Become a social media influencer
Currently, it’s easier than ever to make money online through social media platforms. Platforms like YouTube and TikTok pay creators directly through their creator programs. Typically, you have to meet certain criteria to be eligible for these programs, but some people make hundreds or even thousands of dollars each month through them.
If you’re an online business owner, a writer, or anyone who sells products or services, social media is a great way to find new buyers. On these platforms, you can provide links to your products, and you can also include affiliate links as a way to earn even more.
Best for: People who don’t mind being on camera.
What you need to get started: Some or all of the following: a camera, smartphone, and editing software.
24. Start a podcast
Podcasting is an easy way to start making content that could potentially make you money. You have a lot of creative freedom with podcasts as well. You can talk about topics that you’re interested in, tell stories, or interview people. Then, you can broadcast it to thousands or even millions of potential listeners on apps like Apple Podcasts and Spotify.
It can take some time to make money from podcasting. Unlike social media platforms like YouTube or TikTok, podcasting platforms don’t have a program to pay creators. Podcasters primarily make their money from advertisements and affiliate links. Once you have a dedicated audience, you can reach out to companies to sell ad space on your podcast.
Best for: People who enjoy talking.
What you need to get started: A microphone and audio-editing software.
25. Create a newsletter
Newsletters were some of the first ways for people to make money online. Services like Mailchimp and others allow you to create an email list and send a newsletter out to your subscribers.
The newsletter can be as frequent as you’d like, you can discuss different topics that interest you, and you can put it behind a paywall on your website. Substack is a newer platform that combines blogging with newsletters, and you can charge readers a monthly or annual subscription. This is a helpful tool for those who don’t want to build their own website.
You can also use a newsletter as a way to promote your online business and alert your customers of new products or discounts.
Anne Janzer is a self-published author and discusses how she uses her newsletter to sell more books. “When I have something new going on, I can go and ask those folks, ‘Hey, can you share the word about this?’ and they’re the first ones to go out and post about my new book,” Janzer said in an interview about how her newsletter leads to more sales.
Best for: Writers and people with an online business. What you need to get started: The ability to write.
26. Walk or board dogs
If you’re a dog lover, this may be the right option for you. There are apps like Wag and Rover that connect dog walkers with people, but you can board dogs as well. For those who rent, you may need your landlord’s approval before boarding dogs, but this is a great option for those who want to make money from home.
Both Wag and Rover offer additional dog services for those with other dog specialties. These include:
Drop-in visits to check on dogs while the owner is away
Dog training
Dog sitting
Best for: People who love dogs.
What you need to get started: Possibly transportation to get to clients and a home that allows pets if you choose to board them.
27. Trade stocks
This path of making money from home is on the riskier side, but it can also come with higher rewards. The difference between investing and day trading stocks is that investments are long term, whereas trading involves buying and selling stocks on a daily basis.
To make money trading stocks, you’ll need to stay updated on all of the latest stock news and learn when to buy and sell properly. There’s a learning curve to trading stocks, but some people make full-time income trading stocks through brokerages like Charles Schwab, Vanguard, or Robinhood.
Best for: People with a high risk tolerance.
What you need to get started: Before trading, you’ll want to learn as much as you can about various stocks and how to read the market to minimize losses. Then, you need a computer to trade, or you can trade on apps like Robinhood.
Making money online can help you pay off your debts
If you have a lot of debt, allocating funds from your paycheck can be difficult. Making money online is a great way to earn extra income that you can put toward your debts and potentially improve your credit. Some people are even able to make more money online than they would in an office job.
Having a good credit score is also a way to get access to credit cards and loans. You can use these to fund your online business or better equipment. This all starts with knowing your credit health and having the right tools.
At Credit.com, you can get your free credit report card to check your credit. Sign up for ExtraCredit for additional tools like credit monitoring and ways to report additional payments to the major credit bureaus.
If you’re trying to perfect your credit score, it’s important first to understand what makes up your credit report and credit score. Your credit score is determined by an advanced algorithm developed by FICO and pulls the data from your credit report to determine your score. When calculating your credit score, the following information is going to affect your credit score in the corresponding percentages:
35 percent: History of on-time or late payments of credit.
30 percent: Available credit on your open credit cards
15 percent: The age of your lines of credit (old = good)
10 percent: How often do you apply for new credit?
10 percent: Variable factors, such as the types of open credit lines you have
Many of this may be common sense or information that you’ve already learned over time, resulting in a good credit score but possibly not a perfect score. If you have a bad credit score, it could take a lot of time and work to increase your score and you may first want to consider repairing your credit. If your credit score is already above 700 but you’re trying to shoot for that perfect score of 850 to ensure the best deals and interest rates, here are 5 ways to perfect your credit score:
5 Ways to Get a Higher Credit Score
1. Maintaining Debt-To-Limit Ratio
To increase your credit score, it’s recommended that you keep your debt-to-credit ratio below 30% and, if possible, as low as 10%. The debt-to-limit ratio is the difference between how much you owe on a credit card versus how much your credit limit is. For example, if one of your credit cards has a credit limit of $5,000, then you should always keep the balance below $1,500 but preferably around $500. As you can see above, 30% of your credit score is determined by the available credit on your open credit cards, so keeping the debt-to-limit ratio will increase your available credit and also show that you’re responsible with your credit.
2. Keep Your Credit Cards Active
Make sure that you use your cards at least once a year to keep them shown as “active” credit and make sure that you never cancel your credit cards. 15% of your credit score is determined by the age of your lines of credit, so you should always keep your credit cards active to lengthen the age of your line of credit. Many people tend to cancel cards that they no longer use – many times because the rates aren’t very good or because they have another card with better benefits – but even if you don’t use the cards very often (just once a year is fine), you should keep them active. Typically, someone with a credit score over 800 has credit lines with at least 10 years of positive activity.
3. Always Pay Bills On Time
Probably the most well-known factor of a credit score and the factor that has the biggest impact on your credit score (35% of your score) is your history of paying your credit payments on-time. If you have a history of always making your credit card, mortgage, and car payments on time, you will greatly improve your credit score. This can also have an adverse effect as well, should you ever make a late payment. Unfortunately, it only takes one late payment to severely reduce your credit score so it’s crucial that you make sure to always make credit payments on time.
4. Dispute Errors On Your Credit Report
If you don’t already, make sure that you request a copy of your credit report once every year and review it for errors. It is actually quite common for credit reports to contain errors which can be disputed and potentially allow you to have negative items removed from your credit report. If, for instance, your credit report shows a late payment on a credit card but contained errors in the record, you can dispute the negative item and request to have it removed from your report. Having a negative item, like a late payment, removed from your report can improve your credit score significantly. While disputing errors on your credit report can be tedious and take a lot of time, it is usually worth it. Another option would be to contact a credit repair agency to help you dispute any negative items on your credit report.
5. Reduce The Number of Credit Inquiries
While this may only affect 10% of your credit score, keeping the number of credit inquiries down can still help to build that perfect credit score but is often ignored. You should never have more than one credit inquiry per year but many people do not realize how often this is done and often times have their credit checked more than once per year. If you’re applying for a car loan, checking your credit score online, or applying for a new credit card, these type of actions will almost always result in a credit inquiry and should be avoided if you’ve already had a credit inquiry earlier in the year. Make sure you do your research on what will result in a credit inquiry so that you don’t accidentally have more than one a year without realizing it.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
The average credit score of each state ranges from Mississippi’s score of 680 to Minnesota’s 742, and we’ve got details for every state below. Plus, discover helpful tips to improve your credit score no matter what state you live in.
The average credit score by state varies quite a bit — the difference between the highest and lowest average scores is more than 60 points. Minnesota has the highest average score at 742, with Wisconsin (737), Vermont (737), New Hampshire (736) and Washington (735) also in the top five.
The average score of each state ranges from 680 to 742, and we’ve got details for every state below. Knowing the average credit score in your state can help you evaluate your own score and gauge your credit standing relative to the other residents in your area.
Read on to see this data, as well as helpful tips for improving your own credit.
State-by-state average credit scores
The average credit score for each state varies, though most states are within 30 points of the national average score of 717.
Below is a list of the average American credit score by state as well as how the average changed between 2022 and 2023, according to data from Experian®.
Over the past year, credit scores remained the same or increased by just one point in most of the 50 states, although some states saw a decrease of a point. The average increase was one point, though some of the states saw a slightly larger increase. The biggest increases were in Kentucky, Maine, Oklahoma, South Carolina, New Mexico, Tennessee, and West Virginia, where the average scores increased by 3 points in one year.
States with the highest and lowest credit scores
The states with the highest average credit scores include:
Minnesota: 742
Wisconsin: 737
Vermont: 737
New Hampshire: 736
Washington: 735
On the other hand, these states had the lowest average credit scores:
Mississippi: 680
Louisiana: 690
Alabama: 692
Georgia: 695
Texas: 695
Average credit scores by state vary due to economic conditions and the financial habits of each state’s residents. Notably, the variation in credit scores doesn’t necessarily correspond with the amount of credit card debt. For example, the states with the highest and lowest average credit scores—Minnesota and Mississippi, respectively—are within $500 of each other when it comes to average credit card debt data (Minnesota’s average is around $5,900, Mississippi’s average is around $5,400).
Regardless of current placement, the vast majority of states saw a slight increase in average credit score over the past year. Individuals can make an impact on their own credit by learning a bit more about how scores are calculated and taking small steps to manage their credit more favorably.
How to improve your credit regardless of your state’s average
No matter what the average credit score in your state is, your own score comes down to your individual choices with credit. Understanding the factors that affect your score—payment history, credit utilization, length of credit history, different types of credit, and new credit—can help you make savvy decisions that may improve your credit.
Experian, one of the three credit bureaus, reported that Americans increased their credit card debt by 10 percent from 2022 to 2023. In turn, this raised overall credit utilization by 2 percent—this means that Americans are using slightly more of the credit available to them, which can potentially lead to lower credit scores.
According to FICO®, a credit score between 670 and 739 is a good credit score, a score between 740 and 799 is very good and a score above 800 is exceptional. If you’re looking to improve your own credit, consider starting with these tips:
Lower your credit utilization. Consistently using less than 30 percent of your total available credit can significantly improve your credit health.
Make on-time payments. Late payments and delinquent accounts can negatively affect your credit, but paying on time will improve your payment history, which is one of the most important credit factors.
Avoid carrying a balance. As we explained, carrying a balance can hurt your credit utilization, but it can also cause your debt to swell over time due to costly interest payments. While difficult financial circumstances can sometimes make this impossible, try to make all payments on time and in full to avoid late payments or being sent to collections.
In addition to regularly monitoring your credit score, you’ll want to consistently review copies of your credit report, which lists your credit history, including both open and closed accounts. Scanning your report can help prevent inaccurate negative items from unfairly hurting your credit.
Consider working with a credit repair consultant to look for errors on your credit report and identify other ways you can help your credit. Get started with your free credit assessment now.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Even if you have bad credit, you can still get student loans. Most federal loans don’t require a credit check, which means you can borrow funds for education regardless of your credit history.
The Education Data Initiative found that the average cost of college is $36,436 per year in the United States. This includes tuition, living expenses, books and supplies. This isn’t the same at all colleges, and you can pay significantly less. The average cost for in-state tuition is $9,678, but over the years spent in school, these costs add up. Many people don’t have this kind of cash on hand, so many take out student loans.
If you have a bad credit score, you may want to know about student loans for bad credit, but you may have better options. Bad credit loans come with much higher interest rates, so it’s beneficial to research all of the options so you don’t graduate with more debt than necessary.
Today, you’ll learn about how to get student loans with bad credit as well as which options are right for you.
How to get a student loan with bad credit
If you have a bad credit history, you have two options if you want to take out a student loan. You can apply for federal student loans or find a cosigner for a private student loan.
Federal student loans are funded by the U.S. Department of Education, and they’re basically no-credit student loans since you can apply regardless of your credit history.
Private student loans are offered by a variety of nongovernment financial institutions, and they’re often limited to people with higher credit scores or cosigners.
Federal student loans are often the better option because they’re low-interest loans for students with no credit or bad credit. Private student loans have much higher interest rates, which makes them more expensive as a whole. In some cases, students may need to take out both of these loans, depending on the cost of their school.
In order to receive a federal student loan, you need to meet the eligibility requirements first. Some of the requirements include:
Proof of financial need
Proof of U.S. citizenship
Have a valid Social Security number
Enrolled in a degree or certificate program
Your financial aid is based on need. This is known as “need-based aid,” which uses a calculation to determine how much you can receive based on your Student Aid Index (SAI) and Expected Family Contribution (EFC).
In addition to United States citizens, DACA recipients may also qualify for federal student loans.
Federal student loans for bad credit
Federal student loans are an excellent option for many people, including those with bad credit, because they are based on financial need rather than credit scores.
You may be eligible for any of the following types of federal student loans:
Direct Subsidized Loans: These loans are available based on financial need, and they include the benefit of having the Department of Education pay interest while you’re enrolled in school as an undergraduate.
Direct Unsubsidized Loans: Unsubsidized loans are offered regardless of financial need, and they will accrue interest even when you’re enrolled in school. With these loans, you don’t need to show financial need.
Direct PLUS Loans: These loans are available to graduate students or the parents of undergraduates, and they are the only federal loans that require a credit check. You may still qualify with a bad credit score, but these have higher interest rates than other federal loans.
Direct Consolidation Loans: These loans enable you to combine all of your federal loans into a single loan, which can reduce the complexity of your payments.
Private student loans for bad credit
Your credit score matters if you want a private student loan. To apply for a private student loan, you can go through regular lenders like banks or credit unions. Unlike many other private loans, you may not be able to find bad credit loans for student loans.
One of the best ways to qualify for a private student loan with no credit or bad credit is to find a cosigner. A cosigner is someone with a good credit score, so the lender uses their score rather than yours. The cosigner needs to have a good credit score to help you qualify, and it’s important to note that if you miss your payments, it can harm both of your credit scores.
Federal loans vs. private loans
Federal student loans are typically the best option if you’re trying to figure out how to get a student loan with bad credit. You don’t need to find a friend or family member to cosign on the loan with you, and the interest rates are lower. If the school you choose is more expensive, you may need to take out a private loan in addition to your federal student loan.
It’s also beneficial to understand the difference between the interest rates. The average interest rate for fixed-rate student loans is between 4.8 and 12 percent. If the private loan has a variable interest rate, the average is between 5.9 and 15 percent. However, the average interest rate for federal student loans is only 5.5 percent.
For example, the average student loan debt is $37,787. If you took out a federal student loan for this amount and paid it off over the course of 10 years, it would cost a total of $49,211, including interest. That same loan could cost as much as $73,156 with a private student loan.
How FAFSA works
The Free Application for Federal Student Aid (FAFSA®) is what student borrowers use to receive federal student loans. When taking out federal student loans, you need to fill out the FAFSA each year because it’s a needs-based program, so the amount may vary depending on different factors. They’re mainly looking at your personal finances and your family’s financial situation.
Each year, enrollment for the FAFSA opens on October 1st, and the deadlines are on the FAFSA website. Deadlines can vary by state and by college, so the site also lists additional information for every state.
How to improve your credit before applying for a student loan
You may need to take out student loans regardless of your situation, and one of the best things you can do is improve your credit score. When you have good credit, you can worry less about finding bad credit student loans and get better interest rates as well.
The following are some simple ways you can start improving your credit:
Make your payments on time
Pay off your debts
Pay off collection accounts
Keep your credit utilization low
Piggyback on someone’s credit as an authorized user
How to apply for bad credit student loans
Prior to applying for federal or private student loans, there are some steps you can take to make the process a little easier:
Calculate the loan amount: Before applying, you should know how much you’ll need.
Fill out the FAFSA form: Federal student loans are often the better choice, so it’s helpful to start here. If you need more, you can consider private student loans.
Compare private student loans: If you need additional money from a private student loan, shop around. Compare the loans to find the lowest interest rate and best loan terms.
Try to find fixed-rate loans: Variable interest rates mean the interest can change. A fixed-rate loan means that your payments will stay consistent.
Assess repayment options: Understand your loan as best as possible. Look into the grace period and if there are enrollment restrictions on the loan. Some federal loans require you to be enrolled to qualify for deferred payments.
Find a cosigner: Talk to potential cosigners before applying for private student loans for bad credit.
Alternatives to student loans for bad credit
Whether you get a federal student loan, a private loan or both, it’s always best to minimize your debt. Some alternatives to student loans you can consider include:
Working while attending school: Some schools cost less than others, especially in-state schools. You may be able to afford school by working and paying your tuition with cash.
Work-study programs: You may be able to do a work-study program, which allows you to work part-time for the school while attending. This gives you experience and a way to earn money.
Scholarships: There are many different scholarships out there. With some time and research, you can apply for different scholarships to help cover the cost.
Personal loans: Although these are also loans, this is a good option if you have some college savings and only need to borrow a small amount for a shorter period of time.
Check your credit before applying for student loans
Another way to work on your credit is to check your credit report for any errors harming your credit score. Inaccurate derogatory marks can usually be challenged and removed from your report.
Lexington Law Firm has a team of credit professionals who could help you address errors on your credit reports, and if you’re unsure of your credit score, you can get your free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.