If Your Credit Score Is Under 700, Make These 3 Moves This Week

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You work hard to be a responsible credit user. 

You pay your bills on time; you try to use your credit card only when you have to; and you have a few different credit accounts, all in good standing. You even know what a credit utilization ratio is and why it matters. That’s some next-level credit card management!

But no matter what you do, your credit score never budges over 700.  And you are so, so frustrated by the whole dang thing.

We don’t blame you. It’s hard to feel like you’re doing everything you’re supposed to, only to have an algorithm spit out a seemingly inexplicable three-digit number that brands you as “lesser than” in the eyes of the world’s financial institutions — especially when that three-digit number controls so much of your life.

But don’t give up! These three moves might be the kickstart you need to get your credit score moving in the right direction — and best of all, you can do them right this week.

1. Write a “Goodwill Letter” to Your Creditors

If your credit history is generally pretty good, save for a couple of missteps, then a well-executed goodwill letter may be one way to get those slip-ups removed from your report. 

You’ll want to cover the following bases when writing your goodwill letter:

• Explain why and how long you have been a loyal customer of the creditor.
• Take responsibility for the mistakes that led to the blemishes on your credit history.
• Describe the steps you are taking to ensure they don’t happen again.
• Appeal to your audience’s sense of empathy. Show that you want forgiveness but also that you are determined to do better going forward. Show them you deserve this!
• Keep your letter concise, clear and to the point.

Don’t forget to include important information, like your account number and the date and amount of the missed payment you want removed from your credit history.

Once you’ve written your goodwill letter, address it using the information on the creditor’s website, cross your fingers for good luck, and drop it in the mailbox.  

2. Check Your Credit Report for Errors

Credit reporting agencies generally do a pretty thorough job of collecting your credit history, but that doesn’t mean they are infallible. In fact, one out of five credit reports has an error, according to a study by the Federal Trade Commission.

And those errors could mean the difference between a credit score in the 600s and one in the 700s.

Jamie Cattanach saw this firsthand as a victim of identity theft. She pulled her credit report and saw her score had plummeted to just below 600 after someone opened an AT&T account using her information. She got to work disputing the errors, and after writing just one letter, she was on the road to rebuilding her credit. Within a few years, her credit score was well over 700.

To keep a closer eye on your credit, get your credit score and a “credit report card” for free from Credit Sesame. It breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how to address it.

Because it simplifies everything, you should be able to spot any errors. For instance, if you find an “unpaid” credit card that you know you paid, or a bill in collections you know never existed, you can dispute the incorrect information and raise your credit score.

The proof is in the numbers: 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.*

3. Consolidate Your Debt With a Better Loan

So now you’ve appealed to the better angels of your creditor’s nature, and you’ve gone over your credit report with a fine-tooth comb and a magnifying glass in search of errors you can dispute.

Now what?

Your next step is to take your high-interest debt and consolidate it into a single loan with a lower interest rate. One payment per month is way easier to keep track of than three or four, right? That means fewer chances to be late on a payment, which means fewer opportunities for your credit score to take a hit.

And best of all: The lower interest rate means you’ll be spending less money on your debt in the long run.

Through Upgrade, you can borrow between $1,000 and $50,000, at interest rates of 7.99% to 35.89%, depending on your credit history.

What if you’ve been turned down for a loan? Wouldn’t it be helpful to have access to advice on how to improve your credit to be approved next time? And wouldn’t it be nice to have free credit monitoring thrown into the deal?

Those are some of the benefits of going with Upgrade, an online lending platform. 

Upgrade will throw in free credit monitoring, alerts and educational features. If your loan application through Upgrade is denied, these credit tools will still guide you to improve your credit to help you get approved in the future.

Now you’ve got three tactics you can use to get your credit score right where you want it. Good luck — you’ve got this!

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Live in Chicago? This Side Gig Could Earn You Money All Year Long

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So you live in Chicago — home of Millennium Park, Navy Pier, a Tyrannosaurus rex skeleton named Sue and the tallest skyscraper in the country.

Have you thought about becoming an Airbnb host? Thousands of Airbnb hosts list places in and around Chicago, according to data from the home sharing platform.

Chicago is a great place to host because it has countless tourist attractions — although the tourism is really seasonal. 

“No one comes to Chicago in January. In the spring, it starts going up. By summer, we’re booked 90% of the time,” says Jorge Goldwater, an Airbnb Superhost. 

In a city that’s so expensive to live in, listing your home can be a great way to supplement your income. Between sporting events, conventions, attractions like the Field Museum of Natural History, and annual events like the Lollapalooza and the Chicago Blues Festival, there’s often a high demand for space.

If you’re curious to see how much money you could make by listing your Chicago space, use the Airbnb calculator:

Then, follow our step-by-step guide to set up a listing in the Chicago area.

How to Create the Best Airbnb Listing in Chicago

Before becoming an Airbnb host, you’ll want to check your local laws and prepare your space for guests. (We’ll get into that later.) Creating a listing itself is simple, but you’ll want to put some thought into it, so your space stands out from all the others.

We’ll walk you through the process, plus share some pro tips from Goldwater, a software manager who lists two bedrooms in his three-bedroom rental house near DePaul University. He’s been hosting for four years.

Answer Some Quick Questions About Your Space/Amenities

In this first part of setting up your listing, you’ll answer some basic questions about your space, which could be anything — an apartment, an extra bedroom or house, a campsite, yurt or even an RV, depending on your local laws.

Basic questions in this section include the number of guests your space can accommodate and the included amenities.

If you don’t have an entire place, list your spare room.

Set the Scene With Photos

With Airbnb listings, photos are everything. 

“Make your pictures bright,” says Goldwater. “Don’t skimp on the pictures. Try hard to make it look pretty. Then, when guests come, make sure the reality matches what the pictures look like.”

The platform offers some basic photo tips, which include utilizing natural light, avoiding flash, and shooting in landscape mode from the corners of rooms, so you add perspective.

“Declutter the house,” Goldwater advises. “No one likes clutter.”

Think about what makes your space and your location appealing, and illustrate those elements through photos. You might also include photos of the surrounding neighborhood and nearby tourist attractions. Specific locations and neighborhoods mean a lot in Chicago, so be sure to highlight that.

Write a Description

Once you hook people with your photos, continue to lead them through your listing with the description.

Here, you’ll be able to highlight what makes your space unique. If you’re not sure where to start, take a look at other Airbnb listings in your area to see what other hosts highlight. 

After you host several guests, you’ll get to know your audience, so you can lean into that. 

Name Your Listing

This might seem like a small task, but naming your listing is just as important as nailing your photos. Airbnb urges hosts to create a title that highlights what’s unique about the space.

Chicago hosts often include their specific neighborhood in their listing. You’ll see lots of listings with names like “Sunny Bedroom in Logan Square Area” or “Hyde Park Studio” or “South Loop Suite.”

Set Expectations

Make sure the reality matches what your listing promises. Your guests won’t want surprises.

“We’re right next to a train station,” Goldwater says. “Most people get used to it very fast, but every once in a while we get someone who can’t sleep.

“So I set the expectations in a very straightforward way. I tell people upfront that we are very close to a train station. There is one brick wall between us and the station.”

Set House Rules

Airbnb has a set list of rules you can opt into if you’d like them included in your listing. A few of these include: suitable for pets, smoking not allowed and events or parties not allowed. You also have the option to write in additional rules.

“I only have one house rule,” says Goldwater. “Be polite.” 

Set up Your Calendar

Taking time to set up your calendar is important, because if you cancel on your guests, Airbnb will charge you a penalty fee.

A few questions you’ll answer include:

• How often do you want to have guests?
• How much notice do you need before a guest arrives?
• When can guests check in?
• How far in advance can guests book?
• How long can guests stay?

You’ll be able to adjust these settings as you go, so you can find out what works best for you.

Price Your Space

Airbnb has a Smart Pricing tool, which you can opt into to automatically adjust the price of your listing according to demand. For example, when the demand spikes during the Chicago Blues Festival every June, Airbnb will likely increase the price of your listing automatically.

You can set price minimums and maximums, so your listing won’t dip below a certain amount or spike to something unrealistic. Although Airbnb will suggest these amounts when you’re signing up, Goldwater urges new hosts to do their own research.

“For me, the pricing tool has been very helpful,” Goldwater says. “Especially when I first started doing this.”

Here are a few tips to help you determine these numbers:

• Consider your expenses, i.e. utilities, cleaning and any maintenance requirements.
• Be realistic.
• Search other Airbnb listings in your area and price just below those.

When you’re starting out, you’ll want to price your place lower, so you can get guests in and accumulate reviews, which will help increase bookings in the long run.

Note Your Local Laws

Airbnb advises you to follow your local laws about short-term rentals, whatever they may say.

In Chicago, you are required to register your home with the city. But Airbnb lets you complete this process on its platform.

“In Chicago, it’s easy,” Goldwater says. “You make your listing in Airbnb, and they take care of all the work. The city processes it.”

Airbnb also collects and remits all relevant taxes in the city of Chicago on your behalf.

Also Consider…

In addition to hosting laws, you’ll also want to check with your condo association, landlord or homeowners association to make sure short-term rentals are permitted.

Also note that short-term rentals could invalidate some homeowner’s insurance, so check these policies with your provider.

As you start booking guests, you’ll also want to keep tabs on expenses and revenue for tax purposes.

Goldwater also reminds hosts to take advantage of tax deductions. Because he has guests staying in his space, he can deduct many charges as business expenses, including utilities, furniture, home improvement, even electronics — basically anything guests will also benefit from or use.

Ready to Give This Whole Hosting Thing a Try?

How are you feeling? Like we said, listing your place on Airbnb is simple — but it does require some creativity and strategy. The good news is you can adjust or change your information and settings at any time, so you’re not locked into anything permanently.

Goldwater’s favorite part of hosting has been all the interesting people he’s met. Many of his guests are parents and their college-age children who are on college tours and who stay with him while they visit DePaul and other nearby colleges. He also gets Cubs fans and visitors who are in town for various summer festivals.

“People are nice and polite,” he says. “I’ve been doing this for a long time, and I’ve never had any negative experiences. It’s been overwhelmingly positive.”

“Try it out, because you have nothing to lose,” he says. “If you decide you don’t like it, just stop listing your place.”

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Stocks or Bonds? We Break Down the Risk and Reward to Help You Choose Well

US Stocks Fall as Hiring Pickup Dims Hopes for a Rate Cut

Stocks fell broadly and bond yields rose on Wall Street in early trading Friday after the government reported a strong pickup in hiring last month, complicating the Federal Reserve’s decision later this month on whether to lower interest rates.

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Some Thoughts on Subscription-Based Software

Last week, I shared my review of Jesse Mecham’s excellent book You Need a Budget. In the review, I lauded the You Need a Budget system and discussed how I was an avid user of early versions of the software but haven’t subscribed since YNAB switched to a subscription-based model. I wanted to delve into the ins and outs of subscription-based software a little because it’s a model that many software companies use today, from Microsoft with their Office 365 system, Adobe with their Creative Cloud software, and many other companies that offer “free” and “pro” versions of their software where the “pro” version requires a subscription.

So, let’s start from the beginning.

What Is Subscription-Based Software?

In the past, most software was purchased with a single up-front price. You’d often go down to your local store and purchase it on discs or, in recent years, you might buy it from an online software shop like the App Store. After that, you’d own the software forever, as long as it continued to run on your computer.

In recent years, the internet has opened the door to many other models of buying software, and one fairly popular model is subscription based software.

With a subscription based model, you never actually own the software. Instead, you pay a regular fee – often monthly, but sometimes quarterly or annually – and this gives you access to the most current version of that software package that runs on your computer. The software is regularly updated and you can use it freely as long as you keep your subscription up to date. However, when you stop paying, the software no longer functions.

Usually, the annual price of the software is significantly lower than what similar software would have cost prior to the subscription model, and you do always have the latest version of the software to use. However, if you stop paying, you can’t just keep using whatever version you happen to have until it’s no longer supported (usually many years) – it’s just gone.

What Are You Really Getting By Paying Up?

It’s important to note that there are some advantages to the subscription model that don’t exist with the pay-once model.

For starters, you’re basically ensuring you’ll always have security patches and software updates. If you buy software up front, they might patch it for a while but eventually they’ll move on to new versions and you’re hung out to dry. You’re stuck with software that gradually becomes less and less secure and then eventually doesn’t run at all, as updates to the underlying operating system cause the software to break.

You’re providing financial motivation to keep adding features. With a one-time purchase, there’s no real motivation for the software maker to continue to improve your version. They’re going to add features to the next version. With subscription software, they’re motivated to continue to add features to the version you’re using.

You’re providing financial motivation to continue providing back-end resources. If the software you want to use is web-based or stores data in the cloud, those resources have an ongoing cost, and with up-front software purchases, there’s no continual income once the software sales start to slow. With subscription software, the makers have a continual financial motivation to keep the back end running.

These things are particularly true for companies outside of the “big five” (Microsoft, Google, Facebook, Amazon, and Apple). Often, smaller companies don’t have enormous staff or a wide array of software projects, so declining revenue from a particular piece of software often results in a quick end to support for that software. Subscriptions get around that.

Is It a Good Deal?

So, is this a good model for users compared to just buying a one-time software package up front?

Well, it depends on the exact pricing, but my opinion is that software you use daily (or at least several times a week) that uses a reasonably priced subscription model is generally worth it. This needs to be software that’s very important to the work you do or to some other aspect of your life.

On the other hand, software you use less frequently or is less critical to the things you do isn’t worth the subscription fee. If you only use a particular piece of software every week or two or less frequently than that, you should either look for a one-time cost solution or a free/open source solution to the problem you’re trying to solve.

For me, virtually every piece of software I use fits into one of those two categories.

Do I Use Subscription-Based Software?

Yes, I do, but it’s only for stuff I use basically every day.

The two pieces of subscription software I use are Dropbox and Evernote. I use Dropbox to keep my writing files (and a lot of personal files) organized and synchronized across several devices, and I use Evernote to store and organize ideas. They’re both reasonably priced and they’re both things I use literally every day, often several times a day.

There are many other software packages that currently exist as subscription software that I don’t use every day and I don’t rely on, so for those I’ve found other solutions that work for me.

For example, I love You Need a Budget, but it’s not currently an “everyday” piece of software for me, so I’m still using the old non-subscription version that they phased out a couple of years ago (it happens to still work).

Another example: I prefer Microsoft Office to other office software solutions, but I don’t want to subscribe to Office 365, so I use Google Docs, Google Sheets, and Keynote for the things I’d otherwise use Office for. If Office were the ONLY source for word processing, spreadsheet, and presentation software, I’d probably subscribe, but the other free solutions out there are good enough to meet my needs, so I don’t subscribe.

Yet another example is Adobe’s Creative Cloud software. I know how to use several pieces of Adobe software reasonably well and I have somewhat regular need to do minor photo editing, but the need is irregular and I just use the one-time purchase and much less expensive Photoshop Elements to take care of what I need to do. So, I don’t subscribe to Creative Cloud, even though I might actually use it.

It’s simple: if I rely on a specific piece of software every day, I’m likely to subscribe to it for the reasons listed above, mostly that it ensures the long term health of the software. If I don’t rely on it, I’m generally not willing to subscribe.

Final Thoughts

I don’t think subscription-based software is inherently a rip-off or inherently a bad thing for consumers. However, I think it’s only a good deal when you’re subscribing to software you use extremely frequently. Otherwise, you’re probably better off looking for other solutions.

This is similar to how I feel about a gym membership. If you go to the gym like clockwork several times a week, it’s probably worth it. If you buy a gym membership and rarely go, it’s not worth it and you’d save a bunch of money by just buying a day pass whenever you get up the initiative (or exercise elsewhere). The only time you should “subscribe” to the gym is if the cost of your day passes regularly exceeds a monthly pass, or if the cost of your monthly passes begins to exceed an annual pass.

In the software world, there are generally lots of options out there that can solve the problem you’re trying to tackle. Subscriptions only make sense if there is a particular piece of software that solves a problem for you that’s so important that you rely on it daily. In that situation, you want that software to exist for a long time and you want it to be constantly updated with new features and security patches. Subscriptions give that to you. If you’re not that reliant on one particular piece of software, explore other options and see if something else works for you. I look into alternatives to Dropbox and Evernote frequently, but I never find a solution that just effortlessly nails what I want like those two do.

Good luck!

The post Some Thoughts on Subscription-Based Software appeared first on The Simple Dollar.

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Overhaul inheritance tax rules and ditch complex gift allowances, urge government advisers

This week's best current accounts

This week's best current accounts Stephen Little Fri, 07/05/2019 - 08:51

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First published on 8 May 2013

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Dear Penny: What Are the Risks of Opening Store Credit Card for a Discount?

Dear C.,

Getting your first credit card is a pretty big deal. And it’s usually best not to make major financial decisions because a slightly pushy salesperson is telling you you’ll save six bucks on a pair of shoes.

Let’s start by setting a goal: You need to establish a credit history, and a store credit card is one option for doing so. Any discount you get is a bonus and should not be the determining factor in what card you choose.

When you refer to store credit cards, I’ll assume you’re referring to closed-loop store cards, which you can only use at a certain retailer. Other store credit cards are co-branded with a sponsoring retailer but feature a Visa or Mastercard logo and can be used wherever credit cards are accepted.

Store cards can be good for credit newbies because the requirements to get approved are usually less stringent compared with regular cards. Payments are typically reported to the credit bureaus, meaning they’ll help you build a credit history.

But wait! Store credit cards also have some serious drawbacks.

For starters, the interest rates are usually higher than what you’d pay with a regular credit card. The 2018 Retail Store Card Survey by CreditCards.com found that the average annual percentage rate (APR) for store cards is about 5 percentage points higher than for regular cards.

It can be tempting to ignore those sky-high APRs, though, because store cards often advertise 0% interest for the first six months or so. But here’s where things get really tricky.

Often, that “interest-free” window isn’t really interest-free; instead, it’s deferred interest, where if you don’t pay your balance in full by the end of the promotional period, you’ll pay interest not just on what you still owe but on the entire amount you charged. So if you charged $500 and pay off all but $50 before the promotion expires, you’ll owe interest on the entire $500.

You can avoid hefty interest payments by paying off your card in full each month, as you plan to do.

Another factor to consider is that store credit cards usually have lower spending limits than regular credit cards. Thirty percent of your credit score is determined by your credit utilization ratio — the percentage of open revolving credit that you’re using — so carrying even a small balance on a store card can have a big impact.

Before you apply for a store credit card, be sure you’ve researched multiple options. In addition to considering cards issued by the retailers you frequent, search online for credit cards designed specifically for first-time credit card users, and check with your bank or credit union about their options as well. Compare APRs, annual fees and benefits across cards to determine what options are best for you.

Just know that with any credit card, the perks you receive — whether it’s a discount, cash back, sign-up bonus or travel points — will quickly be erased the second you start paying interest or spending money you wouldn’t otherwise.

Regardless of what option you choose, remember that this is a big decision. Opening a credit card now and using it responsibly will help you achieve bigger financial goals, like getting a mortgage or financing a car. So always pay your balance on time and in full, and you’ll be on your way to good credit.

Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Send your questions about credit cards to AskPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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US Added a Robust 224,000 Jobs in June After Weak May Gain

U.S. employers sharply stepped up their hiring in June, adding a robust 224,000 jobs, an indication of the economy’s durability after more than a decade of expansion.

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Overwhelming public support for government to honour manifesto promise of free TV licences for the over-75s, poll finds