Credit Professional 2018 Spring_2018_magazine | Page 5

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Try to build and keep an
emergency fund of at least
$1,000. Your refund can help
you start this step toward
financial security. You can
also use this emergency fund
cushion while you determine
where all your money is going
and help you make any new
changes to your spending and
saving habits. To learn where
your money is going, save all
receipts for a month. At the
end of the month, divide your
receipts into spending
categories. This can be
eye-opening because it may
show you the spending leaks or
at least places you might decide
to economize. Typically, people
have some expenses that they
can curtail if they have a goal
to change their financial future.
Even one beverage from a
vending machine each day
during the work week at $1.25
each adds up to $326 in a year.
Has poor credit prohibited you
from making a purchase or
caused you to have a high
interest rate?
Use your refund to pay back at
least a portion of your debts,
which will begin to improve
your credit score. The factors
making up your credit score
with the biggest impact are
your payment history and your
amounts owed. You may be
able to negotiate with your
creditors to settle your debt
with a lower amount than you
actually owe. Be sure to get
agreements in writing before
you send money and don't give
access to your accounts.
rates. This only really works,
though, if you stop adding to
the balances.
If you are not sure what is on
your credit report, get your
report from each of the three
This idea accelerates the payoff reporting agencies—Equifax,
dates if you commit your
Experian and TransUnion.
minimum payment amounts to These are free at
additional amounts to be paid
www.annualcreditreport.com
on the remaining accounts.
for all consumers one time
Do you have debt and feel like
each year. Purchasing your
it’s controlling your life?
Organize your debt by making
There are online programs and score is not necessary because
a list of accounts, including the smart phone applications, such information on the report is
creditor’s name, APR, minimum as PowerPay:
what you need to know in order
payment, account balance, and https://powerpay.org/
to make a repayment plan or
payoff date.
that can assist you in seeing
address incorrect information.
how quickly this strategy can
You could use the refund (or
get you out of debt.
If you are considering a large
part of it) to determine to pay
UT Extension also has
purchase such as a home, save
off or pay down on the accounts publications that can help you your refund for a larger down
with the lowest balances or the with your debt repayment plan. payment or for costs associated
ones with the highest interest
(see list in chart below)
with moving.
UT Extension debt repayment publications
https://extension.tennessee.edu/publications/Documents/SP710-A.pdf
https://extension.tennessee.edu/publications/Documents/SP710-B.pdf
https://extension.tennessee.edu/publications/Documents/SP709-A.pdf
https://extension.tennessee.edu/publications/Documents/SP709-B.pdf
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The Credit Professional
4
Spring 2018