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Top 4 apps for credit building to improve credit scores

Top 4 apps for credit building to improve credit scores

A credit score is a number between 300 and 850 that records one’s creditworthiness. Those with higher credit scores are more likely to receive loan approval and reduced interest rates. This score is based on one’s credit history, drawn from factors such as the total number of accounts in their name, types of loans, length of credit history, debt utilization, etc. Several credit-building apps have emerged on the market to help people improve their credit scores.

How credit-building apps work
Credit-building apps tend to offer three distinct services. These are as follows:

1. Credit monitoring
With major credit bureaus, there are restrictions on how often one can access their credit score. However, some apps offer credit monitoring services to allow one to check their score daily, weekly, or monthly. They also offer tips and suggestions for how to improve one’s score. Lastly, they also monitor activity on one’s accounts, sending alerts for any new accounts or suspicious activity that may occur.

2. Credit building lenders
Some apps also offer credit-building loans. As the name suggests, these are meant to help build one’s credit score. Since one makes regular payments in a short period of time, these loans can significantly improve one’s credit score.

3. Credit reporting
Several apps also help boost credit scores by reporting alternative payment data. Since these payments (such as rent or utilities) are not considered in traditional credit reports, they may help improve credit scores.
Top credit-building apps to use
Here are some top apps to use to boost one’s credit score:

1. Experian Boost
Hosted by the credit bureau Experian, this app is ideal for those with a history of rent and utility payments. It works on the premise of credit reporting, including alternative payments that aren’t usually reflected in one’s credit score. To use this, one only needs to sign up, link their payment accounts, and choose their positive payments to be reported. While it may not be able to fix poor credit, it is a great, inexpensive way of boosting one’s score instantly.

2. SeedFi
Those who do not have any credit or borrowing history must try using SeedFi to boost their credit scores. This app offers lender services, with interest-free loans beginning at as little as $10. Users can pay this loan back within the payment cycle. SeedFi then reports this positive payment to credit bureaus, helping improve credit scores. Additionally, this service is free to use, helping first-timers build their credit without breaking the bank.

SeedFi also offers Borrow and Grow loans, which offer users cash immediately upon approval. This loan includes a sum that goes into a savings account. Once the loan is paid off, users access this account, effectively acting as an emergency fund. However, this service typically has high interest rates (12.96-29.99%), which could prove costly over time.

3. KikOff
KikOff is ideal for those looking to make small monthly payments. According to experts, this service can help users improve their credit score by 58 points. Sign-up on KickOff does not require a credit check. With their credit account, users are offered a small line of credit ($750 per month) to make purchases from the KikOff store. Users can pay these back in the form of small monthly payments to help boost their credit score.

The account has a $5 monthly fee that is part of the credit line. This helps one build credit, even if they do not borrow anything else. Additionally, the service does not have associated interest charges or late fees, letting one focus on covering the principal amount easily.

4. CreditSesame
CreditSesame is a great option for those looking for a credit reporting app. This free service also offers personalized advice to help users improve their financial standing and boost their credit scores. It operates by recording and reporting a portion of one’s payments to the major credit bureaus. This evidence of on-time payments helps improve one’s credit scores. The app also offers cash rewards for services one avails themselves of on their platform. Users can also avail themselves of a free checking account and a new debit card linked to it for improved cash rewards on the app.

Credit scores can have a significant effect on one’s life. They are used to determine one’s reliability by prospective employers and to decide interest rates and approvals on loans, credit cards, mortgages, etc. by lenders. Using the credit-building apps mentioned above can help people improve their scores and establish sound financial footing for the future.

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Prepaid debit cards – Benefits and top picks

If you think prepaid debit cards have no value, you might want to reassess your theory and catch up with this smart budgeting tool. Prepaid cards can save you from overspending and help you budget without much hassle. You also won't have to worry much about transaction fraud or losing millions from the account in case of theft. That's not all. A prepaid debit card can come in handy in many other situations too. Easier money management Prepaid debit cards are an effective tool to curb unnecessary expenses. If you cannot help but go a little crazy on your retail therapy spree, this card might be the perfect solution. Once you load your card with a certain amount, you know without a doubt that there's no extra spending you can indulge in. Since the card encourages people to manage their money well, many have opted for it as a go-to payment method. Help with business budgeting If you're bad at tracking how much you spend or often fail to meet business expenses without spending out of pocket, prepaid debit cards can help organize your finances. Getting a prepaid card for business expenses means you no longer have to worry about either spending your personal cash or going over budget with business spending. At the same time, you can communally use the card for your startup without having to remind the team members to stay within spending limits. Reliable travel buddy One of the top reasons to invest in a prepaid debit card is that it makes for a nifty travel companion. Want to spend a weekend out of town partaking in adventures? Headed on a long vacation to another country? A prepaid debit card is an answer to your money-carrying concerns. Most prepaid or reloaded cards are accepted in various countries at payment points and ATMs. Some even offer payment options in local currency and USD. No account necessary Another great benefit of getting a prepaid debit card is that you might not need to sign up with a credit union or open a bank account. This is especially useful for people who don't want to go through the hassle of managing an additional account or already have to take care of a checking account. Since there's no bank account, prepaid cards provide the convenience of paying in plastic without bothering about the bank's processing fees. Moreover, you might be surprised to find out that transactions via certain prepaid cards cost less than bank debit cards! Besides providing the above benefits, prepaid cards are a fantastic source of rewards and rebates. Some even let you convert your rewards to cash, further contributing to your savings. But it's crucial to choose the right card. Some top prepaid debit card options you might want to look at are: Netspend® Visa® Prepaid Debit Card The Netspend® Visa® Prepaid Card works like any other traditional card, except it isn't linked to a bank account. If a poor credit history is in your way of getting a checking account, this might be the solution to your problems. By getting a Netspend® Visa® or Mastercard® prepaid card, you can access all banking features in the same place without hassle. In addition, you can load up $1,000 or more cyclically on the card without paying a monthly fee. Bluebird® American Express® Prepaid Debit With a monthly fee of $0 and free withdrawals from in-network ATMs, the Bluebird® card is among the sought-after prepaid debit cards. The cash loading limit for temporary cards starts from $1 and goes up to $500; however, when your card is activated, your reload limits range from $20-$1,999. In addition to these benefits, American Express® users can reload their cards a couple of days earlier than the originally scheduled date. Greenlight Debit Card With no ATM fee or reload fee, the Greenlight Debit Card is a great choice for parents looking to hand over the card to their kids. The card even comes with its own range of money management lessons to help children learn about responsible spending and saving behavior. However, you will have to shell out some money to pay the monthly fees, and it can't be reloaded with cash. Many banks offer cash cards as an alternative to debit cards. Cash cards can be used at ATMs to withdraw money, but unlike other prepaid debit cards, you won't be able to make payments in most cases.

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Avoid these 7 mistakes when trying to get debt-free

Financial freedom and debt-free living are attainable goals. To achieve these goals, it's important to manage one's finances, savings, and especially debts wisely. Paying off debt requires a thoughtful and disciplined approach. But some mistakes can not only prolong this journey but also get in the way of building essential emergency funds for a secure financial future. Here are some debt repayment mistakes and suggestions for better financial planning for lasting financial well-being. Not changing spending habits Maintaining the same spending habits can affect one's financial stability and efforts to reduce debt. It's essential to reassess and adjust one's expenditure patterns, which involves curbing impulsive purchases or unnecessary luxuries like the latest gadgets or insistence on eating out every day. Simple changes in one's spending habits and adding on a few ways to save and invest more can expedite one's debt repayment and build a foundation for future financial well-being. Not contributing to a retirement account A retirement account is like a safety net for an individual once their income from a regular job comes to a standstill. These funds are often undervalued during the younger working years, but they build a solid foundation that gives an individual much financial stability and mental peace in old age. Those with a debt at times make the mistake of spending every dollar they earn towards repaying a debt. This can, in turn, lead to financial stress during later years. Since a retirement account grows slowly over time, contributing steadily is important. As per experts, one should always dedicate about 15% of their annual income towards a retirement account, irrespective of the debt amount. Using retirement account money to pay off debt One is allowed to take a loan off the 401(k) account, which is one's retirement account. Using the retirement fund to pay off current debts may seem like a solution, but it's not recommended. Early withdrawals often lead to hefty penalties. Additionally, many companies match one's retirement contributions, which appreciates over time. So, one should avoid jeopardizing this long-term financial security and focus on other ways of paying off debt. Signing up for debt relief programs Many debt relief companies offer programs that allow debt-ridden individuals to negotiate with their lenders. These negotiations include reducing the overall debt amount, extending the repayment period, or even applying for bankruptcy. However, it might take up to 5 years for their solutions to bear results, and the debt relief companies also have their own fees and charges. On the other hand, the negotiations also come with inevitable repercussions. For example, debt settlement is known to negatively impact one's credit score, while extending the repayment period may hike the amount one pays in interest. Lastly, filing for bankruptcy destroys one's credit score and may require one to relinquish all assets. In addition, if the debt relief program is illegitimate, it can cause heavy financial losses. So, it's important to research thoroughly before opting for these options. Not monitoring credit Another mistake people often make is not regularly checking one's credit report. Three government companies, Experian, Equifax, and TransUnion, allow people to download their yearly credit reports for free. One is advised to use such tools, evaluate one's spending habits, and check for any discrepancies in the report. These inaccuracies, if left unaddressed, can impact one's credit and lead to financial losses. Using cards with debt repayment Trying to pay off credit cards while still using them is another common mistake. They can manage new charges and reduce the existing balance. These steps can be driven by certain rewards the credit card company promotes. However, this approach can cause one to accrue extra interest, which can balance out or even exceed the rewards. So, it's advised to stop using the credit card when working towards paying it off. Making extra payments Some people may make extra money from side gigs or some businesses. To pay off debt early, they need to direct these new earnings towards repaying the down debt. This is often a mistake because it can leave one vulnerable to unexpected financial emergencies in the future. So, one is advised to have an emergency fund in place as it often creates a safety net for holistic financial well-being. By avoiding these common mistakes and adopting sound financial practices, one can streamline their journey to financial freedom. One can also take professional guidance to manage one's finances better. This additional support can increase one's success rate in the pursuit of being financially healthy.

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