Follow this guide for easy home improvement tips on a budget so you can finally ditch those old kitchen cabinets! 

Home Improvement Budget Tips

So you’re finally ready to ditch your old kitchen cabinets? Here’s how to do it without spending all of your savings.

Shows on HGTV make home improvements look simple. In one 30-minute episode, an outdated kitchen is completely transformed into a new unrecognizable space with a sparkling farmhouse sink and cream colored cabinets.

Although considered reality television, these programs can be far from the reality experienced by most homeowners undertaking home improvements. Renovations require research and planning to ensure projects are completed on a timely basis, with care, and on budget.

Before you dig into your new house project, take a hot second to make sure your finances are in tip-top shape. After all, we’re all wondering where that next dollar goes. If you have some extra cash this quarter, do you put it toward your retirement savings? Or, do you pay more heavily into your mortgage payment or your credit card debt? What about your kids’ college savings plans?! Before you kick off Demo Day, set up your your financial plan. From there, we’ll help you determine if putting extra cash toward your home makeover is the best next step. (Don’t worry! We won’t tell you NOT to do anything. Instead, we might suggest if it’s best to wait a couple of months until you put a solid dent into that credit card debt.)

Now that your budget buckets are set and you know where that next dollar should go, we’ve compiled some easy home improvement tips to stay on a budget—and get the best bang for your buck.

With so many pins on your Pinterest renovation board it can be hard to choose which project to tackle first. What’s our solution? Create a list ranking the projects.

Figure out which project will give you the largest ROI. You want to add value to your home. Especially if you plan on moving within a few years following the renovation. If you need help, reach out to a local real estate agent. They will be able to give you insight on what renovations will make you the most (or any!) money down the line.

This is your home! It is supposed to be a space you are proud to call your own. If one renovation project will make you happier than another, that is definitely a factor that should play into your decision.

 then a new bathroom might have more value than a home gym. Or maybe the home gym is more valuable. You have to decide that, but you should be thinking about what makes sense now 

When creating a budget, try to avoid over-renovating. If your house is worth $250,000, spending $90,000 on a kitchen renovation may be a bit much. Also, spending more usually means you will see a smaller ROI. In an article by the 

, Dan Diclerico, a smart-home expert for HomeAdvisor, says that kitchen renovations should cost between 5-15% of your home value; whereas, bathroom renovations should be between 3-6% of your home value. You should also be sure to include a 10% contingency in your budget. Generally speaking, projects cost a bit more than expected. Planning for a contingency in your the budget will give you a spending buffer.

Once you have picked the project you want to tackle, it is time to capture all the expenses in a budget. The budget should include costs like materials, labor and the contingency we talked about before. This will take a bit of research. The budget is not going to be exact, but should reflect your best estimates. Most homeowners will see their budgets change over time as they refine costs and finalize plans.

Before moving ahead with a home improvement project you should connect with multiple contractors. Try to meet with at least three. Just like Goldilocks, you are looking for the contractor that is just right for your renovation needs. Through this process you can also figure out the average price of similar projects in your local area. When considering contractors it is also important to weigh in the reviews and opinions of others. Ask to see their completed projects and make sure you talk to other homeowners who have worked with the contractor. While the initial low cost of one contractor may seem like a great deal, the price may start to make sense when you see the quality of the work.

Labor is one of the most expensive parts of renovations and, by deciding to do that paint job yourself, you may save some serious cash. Hey, you can even do your own demolition and save money while also letting out some of your pent up anger from the workplace. It’s a win, win. But if it cannot be done yourself, leave it to the professionals.

You can also save some money by purchasing materials online. But before placing an order get the necessary dimensions from your contractor first and make sure the product has a good warranty. When materials arrive, inspect the item(s) to confirm that they are as described before accepting the delivery.

Shopping in the sale or clearance section of stores for materials like floor tiles is an extra way to save. Everyone loves a good bargain and there are probably a lot more good pieces hiding in the sale section than you'd think.

Keep in mind that renovating your home right now may cost a bit more as the prices of goods like lumber have risen due to the COVID-19 pandemic.

The longer you take to plan your renovation the more likely you are to stay on budget. So do not rush your project. Wait until you feel confident in your contractor and in your budget. Trust us, the results will be more than worth it!

 to make sure your finances are in tip-top shape before calling that contractor or picking up that hammer.

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Easy, straight-forward guide to determine how much money you should put away for retirement 

How Much to Save for Retirement?

 the million dollar question: how much money should we save for retirement? There are some super complex projections out there, as well as some really easy calculators. Which are the best tool to use? We think any of them... as a starting point.

How to determine how much to save for retirement

One rule of thumb is to multiply your retirement savings by up to 10X your annual income in the years nearest to retirement. The reason for socking away more money in the years closer to retirement is because you're likely making the most money in your final working years. That's right, all that hard work has paid off!

A more detailed approach is to use the factor rule is featured below, from 

Each year, Fidelity Investments issues a table showing how much one should have saved for retirement, depending on your age, multiplied by a factor. Take a peek!

how-much-should-i-save-for-retirement.avif

Aim for your portfolio to double every 10 years

, an appropriately allocated portfolio can double every 10 years, if it is getting a 7.2& return. Sure, that return might seem a bit aggressive these days, but again, this calculation is a good starting point.

To make sure those in the back heard us: 

it's possible to take the amount of your investments now, and aim for them to double every 10 years.

Let's take this calculation for a spin, shall we? Let's assume you're 35 years old and will retire 30 years from now. Let's also say you've saved $50,000 and have invested in a properly allocated portfolio. It's reasonable to assume that this pot of $50,000 can increase to $400,000 over the next 30 years. To reach this pretty-penny-number, we assume that your savings will double three separate times over the course of the next 30 years—in theory, your savings could reach $100K at age 45, $200K at age 55, and $400K at age 65. Hooray! 🎉

See why we're such big fans of planning for the future!? It literally pays for itself!

What to tackle first when planning for retirement

If you haven't started saving for retirement yet, that's okay! Rather than beat yourself up for not saving "enough" or getting started "too late," we believe it's NEVER too late to start saving! #YouGotThis! (We can help.)

Follow the below steps to get your retirement savings in order:

Use the table (pictured above) to gauge how you're saving for your retirement so far.

Based on what you have saved, or what you will have invested in the near future, use the Rule of 72. If your portfolio is doubling every 10 years, is your retirement savings fund nearing what you'll need come your golden years of retirement?

 You can aim to generate 4% on your portfolio each year to generate enough cash for retirement. If your finances are properly allocated, this is a fine and totally acceptable assumption to make. This, plus your age and risk tolerance, is a formula to help you determine how much you need to save for retirement, and at what age. That means that if you have $1,000,000 saved by retirement, you can reasonably assume that $40,000 in interest will be yours to spend without touching your principal.

 Next, play around with CFCU's retirement calculator. (Or, you can skip the previous steps and pop right into the app to plan your retirement. We won't leave you hanging!)

 Yep, you guessed it! Next up is start to save and invest as much money for your retirement as you possibly can! We recommend starting to save for retirement early. If you commit to a disciplined investment and savings strategy, and you evaluate it annually, you can set yourself up for a successful and worry-free retirement. And who the heck doesn't want that?!

Before you get bogged down in the details or feel like your retirement savings plan is an insurmountable goal, remember, planning for your retirement is a road map, not a destination!

orsa, the credit union you knew as Community Financial Credit Union (CFCU)
Content before 2026 may contain references to our former name.

How Much to Save for Retirement Blog Content

Lease? Buy? Uber? Find the right transportation option that won’t break your budget

How to Budget for a New Car

Are you looking for a hot new set of wheels? Or, maybe just something to get you from point A to point B?

Either way, you have plenty of options to consider when it comes to choosing your next car. We can help you decide which one will work best for your busy lifestyle—and save you the most cash!

Key deciding factors when getting a new car

There are a few major factors good to keep in the back of your mind when making your decision.

How much should you spend on transportation?

 Make sure your budget is up to date so you’re working with the right cashflow.

It’s common to get an auto loan lined up before buying or leasing a car. After all, not all people have $30K+ in their bank accounts to just drop on a car! There are lots of different lenders who have different 

 deals. Shop around to find the one that’s best for you. And, once you settle on your new loan, keep in mind that you can often refinance if rates or your situation changes. Typically, people 

 if their credit score sees a significant lift, if car loan rates come down, or if they simply need a lower monthly payment.

Whether you’re buying or leasing, you’ll most likely need to purchase car insurance since car insurance is mandatory in most U.S. states. There are different types and levels of coverage, so the monthly fee can vary. Always shop around for the best auto insurance cost.

How important is the flexibility of the option you choose? Think of “flexibility” in terms of vehicle interior size, availability, towing capability, trunk space, etc.

Buying your own car can have some major perks. Before deciding to buy your ride, consider whether you want to buy a new or used car. Maybe you value being the first owner of your car and don’t want to worry about any previous damage or wear and tear. Or, maybe you’re more interested in the lower sticker price and can find a solid deal on a pre-owned car.

Accidentally spill your iced latte on the passenger seat while in a hurry to get out the door? No need to worry about additional fees from the leasing agent. After you finish paying off the loan on the car, it’s 100% yours.

Once the car is completely in your name, you have the ability to do whatever you please—sell, trade in, sit on your driveway. You can make some money back on your big purchase if you eventually decide to sell it or trade it in for a new one. Or, you can run it down to the ground before opening your wallet for another car.

Owning your own car can add up, if it begins having maintenance issues. All cars require ongoing maintenance like tire rotation, oil changes, washing and waxing, filter changes, and so forth. But, if you’re consistently paying more than a monthly car payment on your repairs, it might be time for a new car. Make sure to check into the condition and reliability of the car before making any big decisions.

Monthly loan payments will most likely cost more than paying for a leased car, but remember that the payments will eventually end and the car will become completely yours as you pay down that principal.

Another option worth considering is leasing your next car. This means you pay the leasing agent a fixed monthly fee for a specific amount of time to “borrow”, use and drive the car. You may trade it in the for a new or different car once your lease ends. Or, you can simply turn it in and not get a new car.

If you would like to change up your ride every few years, leasing may be the best fit for you.

The monthly payments for leasing a car are typically less than if you were to take out a loan to buy your car, since you’re only paying for a (still significant) portion of the car’s sticker price.

Once your lease is up, you’ll simply return your car to the dealership. You won’t have to worry about coordinating the sale.

Since you don’t own the car, you won’t be able to resell it once you’re ready for a new car. Instead, your payments will simply go toward borrowing the car, without investing in the asset for yourself.

If you want to get a new car in the middle of your lease, you’ll most likely have to buy yourself out of the lease. Essentially, even if you gave the car back to the dealership early, you’d have to pay the remaining balance of your lease.

If you decide to buy the car after your lease is complete, the dealership will charge you the residual value of the car. More often than not, your total investment in the car will far exceed the initial sticker price of the car.

It may sound crazy, but for some, relying on your friendly neighborhood Uber or Lyft driver when you need a ride can be a simple and cost-effective solution to choosing your next car (or lack thereof!).

You’ll have your own personal chauffeur. 

No need to stress over the 5 o’clock rush hour on your way home from work. Now you have a driver that will take you almost anywhere you need to go.

While you’ll need to budget for these rides, you won’t have to worry about costs like insurance and car payments that come with buying or leasing.

You may have to wait a little bit for your driver to show up, or they may not always know the quickest route to your destination. If you like to be in the drivers’ seat (pun intended), maybe a ride service isn’t the right choice for you.

Only choose this option if you don’t plan on driving as often. Your ride service bills can rack up fast and become more costly than buying or leasing a car if you use them too often.

Getting a new car—whether that’s “new” or “new-to-you” or leased—is an exciting purchase! It’s also a very big life decision that has repercussions on your finances. Make this decision very carefully, and try not to skip any steps.

How to Budget for a New Car Blog Content

Protip: to get the best rate, check your credit score and shop around for the best deal 

How to Get a Car Loan

Buying a car can be a stressful ordeal. Between dealing with car sales reps and their "tricks," to the looming car payments that are soon to hit your bank account, we can all agree that getting a new car isn't all sunshine and rainbows.

To help make the process a little less painful (and a little more informed), we've pulled together some quick tips to help you get a car loan faster, easier, and hopefully less expensive—no sweat or tears necessary!

Turns out, the majority of car shopping happens before you even hit the dealership. Well, kind of. Of course you'll want to scope out and thoroughly test drive your new car before purchasing. But, did you know that much of the pre-purchase work happens before you even step foot in the dealership?

Follow the below steps before you even go to the dealership. That way, you'll be fully financially prepared with your auto loan to be able to purchase your new car.

Check your credit score before you do anything.

Calculated on your credit history and amount of lines of credit (and a couple of other variables), your credit score tells potential lenders how trustworthy of a borrower you are. A good credit score—600 or above—tells them that you'll pay them back on time. A not-so-good credit score—below 600—makes them weary of lending you money and, if they do, potentially at a higher interest rate. Depending on your credit score, you could pay anywhere from 3% to 20% annual percentage rate (APR) on your loan. That's a big difference!

If your score is not optimal, and you can wait to get a new car, we recommend spending a few months boosting your score. That way, it'll be easier and less expensive to get your car loan.

Apply for auto loans from multiple lenders

Not all lenders fit the same mold. It's possible to get a better auto loan deal from one lender—think lower APR financing, no prepayment fee, etc.—than another.

Try your current bank or credit union first. They'll likely have a special rate or deals for their customers and members.

Even if they do, it's still good to shop around for other lenders, apart from your bank or credit union. Different lenders look at your credit report differently, so your financing will not necessarily be the same across the board. With quotes from multiple lenders, you'll be able to compare a solid handful of rates and make the decision that's best for you.

Keep in mind while shopping around for lenders that they might not been keen on financing your auto loan with a private dealer (vs. a dealership or broker). Just another quick question to ask when vetting your lenders.

Getting prequalified vs. pre-approved for a loan

Now that you've shopped around for an auto loan, you've likely learned that car loan interest rates can vary.

If you get prequalified for a loan, that counts as a "soft pull" on your credit report. This financing is merely a rough estimate and a range of what your car payment and interest rate would be, based on the personal information you provide.

If you get pre-approved for a loan, this counts as a "hard pull" on your credit report. This financing is a much more accurate estimate of your car payment and interest rate, as the dealer is now reviewing your entire credit report, not just your credit score.

Another big benefit of getting pre-approved for your car loan is that it gives you stronger negotiating power because, now that you already know your interest rate, you're only negotiating the bottom line—the car sticker price versus your monthly payment.

Make sure to get all of your pre-approvals done within a two-week period. That way, these "hard pulls" against your credit will count as one ding. If you space out the pulls, they'll count as individual dings—faring far worse for your credit score.

Once you get pre-approved for your car loan, you'll have an idea of how much money you have to spend on your new car. The amount you're pre-approved to borrow is the total amount, but should not be the cost of the car you buy. Keep in mind you'll have to set aside money for taxes and fees.

Use an auto loan calculator to plug in your down payment, trade-in value of your car, and lending terms. From there, you can find your monthly car payment. If it's too high, adjust your auto loan to be lower. Remember, that amount is simply what you're 

When it's (finally!) time to head to the dealership

. Test drive multiple cars, look at new and pre-owned vehicles. This is a big purchase and, after all the work you've already put into the process, there's no sense in moving too quickly when picking out your new wheels.

As you're perusing dealership lots and test-driving all the cars you can get yourself into, keep in mind that your lender might have specifics on what kind of car they'll finance—e.g., excluding electric vehicles or certain brands—which dealerships they work with, and any time restrictions on using the loan.

Since you're already pre-approved for your car loan, you're technically a "cash buyer," and don't need to finance through the dealership. That way, you can simply negotiate the cost of the car, not the monthly payment (which is based on your APR financing and length of your loan).

Your other option is to tell the dealer that you're pre-approved, and share the amount. Oftentimes, the dealership will want to beat the market price to get your business. In that case, you can end up with an even lower car loan rate!

Buying a car is no small purchase. The work and diligence you've put in ahead of making your big purchase has set you up for financial success.

Now, it's time to negotiate your car insurance! And, of course, take your new whip for a spin! 🚙💨

Follow these guidelines to determine if an auto loan refinance may be right for you

Should You Consider an Auto Loan Refinance?

Sure, you've heard about refinancing your mortgage or refinancing your student loans—but have you heard about refinancing your 

Much like any loan or method of borrowing, there are terms, conditions, fees and interest rates. And, while you'll most likely always have to pay interest on your loan (unless you get a wicked deal!), the goal is to pay less interest over time. Paying less in interest is essentially just paying your lender less money for borrowing the same amount of money. Sounds like a deal, right?!

Before you make any moves, you'll want to take a look at your 

Simply put, the goal of refinancing your auto loan is to save money! While the sticker price of your car won't change, the interest rates (or, the "fee" you're paying the lender to be able to borrow money) can. A small variance in your interest rates can make big changes to your wallet.

Take, for example, a 60-month loan with a 5.27% annual percentage rate (APR) for a $25,000 car. That equates to a $438 monthly car payment, with a total interest payment of $1,317.50 over the five-year loan.

However, what if you could refinance your loan and get a better APR? Let's say you qualify for a 4% APR for that same loan duration. Your monthly car payment would instead be $433 and you'd only pay $1,000 in interest. This refinance would save you $317.50 in interest.

It's clear that the tippy-top reason to refinance your car loan is to save money. But, what are some indicators that show it's time to refinance or that refinancing can save you money?

Your credit score is rocking an all-time high.

Has your credit score seen a lift? Great! Lenders are far more apt to let you borrow money when you have a higher credit score. And, they'll oftentimes give you better deals. Your good credit score proves to them that you're a trustworthy borrower and you're able to pay back your loans on time. Nice work! Now, reap the benefits!

Refinance car loan rates change over time, due to many factors. If it's been awhile since you purchased your car, chances are the refinance car loan rates have changed. Just make sure that they've gone down, before you decide to refinance.

Sometimes you just need lower monthly payments. And that's fine! (TBH, even if you're not strapped for cash, who doesn't want a lower monthly payment if it's out there!?) When refinancing, you can get a lower monthly payment, since you're paying less in interest. BUT, you can also get a lower monthly payment by extending the length of your loan. Keep in mind that extending the length means paying more interest over time. So, while you may save more today, you'll be paying for it tomorrow.

Top Reasons Not to Refinance Your Car Loan

It's always a good time to save money, right?! Well, kind of.

When you refinance your loan, you're typically borrowing from a new lender. Some lenders have a 

, such that you will have to pay the original lender when your new lender pays off your loan in full. Just check the paperwork from the car dealer to ensure this clause isn't in place. If it is, you might not end up saving enough money in the refinance to offset the original lender's fee. If the clause isn't in the contract, keep moving!

on loan refinancing deals. Some lenders charge this fee, which also dips into your potential savings.

You might not be the new lender's top candidate.

Different lenders have different preferences and prerequisites when loaning money. Some, for example, have minimum loan amounts and won't offer a refinanced loan to a car that has depreciated too much in value. It's not so much the model year of the car in this case, as it's more likely to be the number of miles.

Likewise, if you have borrowed more than the car is now worth, a new lender is not likely to offer you a new, refinanced loan.

Another partial speed bump to your auto loan refinance is where you are in your

. Keep in mind that, if you're far along in your loan repayment, the refinance savings might not be big enough to matter. Your interest payments decrease over the life of your loan, as you're paying interest on the principal (i.e., "total") amount owed. So, near the end of your loan, you've already paid the majority of the total interest on your car. In other words, the burden of refinancing might not be worth the payoff.

Your recent credit inquiries and your credit history affect your credit.

Any time you apply for credit—whether that's a Home Depot credit card or auto loan—you credit report gets a ding. Likewise, any time you open a new loan account, the average life of your credit history declines.

payment history outweighs your new loan account or line of credit when calculating your credit score

. If you've had a credit card for 10 years and consistently pay it off, your credit will be plenty high to experience a ding here or there.

Final to-do list for refinancing your car loan

At the end of the day, it's up to you whether or not you want to refinance your auto loan. Just keep the following things in mind:

 Is it high enough to prove you're a trustworthy borrower?

. Have you already paid most of the interest?

 Do you have any prepayment fees in your contract?

Can you get a better interest rate than what you have?

 Compare prices with various lenders. Get the best deal around!

Learn the basics of credit, the difference between good credit and bad credit, and debunk the top four myths about credit 

Top Credit Myths

Before we dive on into credit myths, let’s take a moment and get warmed up. Credit cards, credit reports, credit scores—the list goes on—can be overwhelming if not properly understood. Many people think that credit cards automatically ensure credit card debt and bad credit scores. FALSE! Credit cards can be good vehicles of building credit—if done appropriately.

Let’s start off with the basics: do you know what a credit score is, and how it can affect you?

Typically when we talk about credit scores, we refer to the most common credit calculations like the FICO which ranges from 300 to 850. The higher the score, the better.

Your credit score is a “grade” that tells potential lenders how reliable you are when it comes to borrowing money. In other words, your credit score is a measure that lenders use to determine how likely you are to pay off or default on a loan, based on your credit history. Your credit score is calculated based on a few factors, including your prior credit card history, your prior lending history, how timely you made payments to your lenders, and a few other things. So, if you tend to pay your rent late, carry credit card balance month over month and open new credit cards on a whim, lenders will see that you’re not the most reliable candidate to which they’d want to lend money. Not only would your credit score be lower, and chances are the rates that they are willing to lend to you will be higher, but also, it’d be harder to prove that you’re a responsible borrower who wouldn’t bring the lender extra risk.

In the U.S., there are three major credit reporting agencies: Equifax, Experian, and TransUnion. These organizations are for-profit businesses and possess no government affiliation. By law, consumers are entitled to a free annual credit report from each of these three agencies.

TL;DR: Very! With a good credit score, you’ll get better interest rates on future loans, become more attractive to future lenders. and, ultimately, keep more of your hard-earned cash by paying (err, throwing away!) less money in interest.

Good credit impacts everything around lending. With better credit, you can expect better interest rates on future auto loans, credit cards and a mortgage. A good credit score also increases your chances of being approved for new loans.

With better credit, you can also expect higher credit card limits, faster and more likely approval for rental houses and apartments, lower premiums on auto insurance, and lower finance charges on credit card balances. And, you guessed it: lower credit means less trust and more interest you have to pay. If you have a lower credit score, you’ll likely pay higher interest rates and finance charges. It’s also common that you’d be required to pay a security deposit on bills such as utilities. To make matters even worse, folks with lower credit are also less likely to be approved for future loans. So, the cycle will only continue.

Do you know your (approximate) credit score?

It might be a good idea to know the ballpark of your credit score. Periodically checking your credit report and credit score is a great practice to develop. First, knowing your credit score will help you keep yourself in check. Do you need to make some changes to boost your credit score? Another great reason to check your credit report every now and then is to make sure you don’t end up with any accidental or fraudulent dings on your credit report that negatively impact your credit score.

Alright, now that you’re warmed up, let’s get down to brass tacks. Credit can be an overwhelming and scary thing but, as we’ve explained, it doesn’t have to be that way. Some predatory lenders (or misinformed friends and family members) might tell you one of the following top myths about credit. Don’t fall for this trap!

Checking a Credit Report Will Hurt Your Score—

Pulling your own credit report results in what is called a "soft pull," or "soft inquiry,” and does not impact your credit. You can pull this report—for free—once each year. By law, you are able to pull a free and complete credit report once per year from all three credit reporting agencies. If you’re interested in pulling your credit score more frequently, there are other resources that help you keep tabs on your credit score throughout the year.

Regularly checking your credit report will help you make sure that your personal and financial information is accurate. It will also help you to sniff out any fraudulent activity, like if someone opened a fake account in your name. If you find errors (fraudulent or simple mistakes) on your credit report, contact the relevant credit bureau to set things straight. And, don’t delay on this one.

Now, while soft inquiries like checking your own score will not affect your credit scores, some hard inquiries will. Hard inquiries are when a lender runs your credit score before agreeing to a loan. This is a common practice when you rent or buy a home, purchase a car, sign up for a new credit card, etc. While these actions are not bad, doing many of them back-to-back might make lenders a tad weary of lending you more money.

Education Level Can Affect a Person's Credit Score—

It doesn’t matter if you have a PhD in aeronautical engineering or a GED. Your education level does not affect your credit score; only your past credit activity affects your credit score. Remember, your credit score shows lenders how likely you are to pay off or default on a loan, based on your credit history—not your education, race, creed, or political affiliation. Your credit score is calculated based on a few factors, including your prior credit card history, your prior lending history, how timely you made payments to your lenders, etc.

Carrying a credit balance month over month will build your credit score—

This couldn’t be further from the truth! Carrying a balance on your credit card month over month (and not paying it off each month) does not boost your credit score. In fact, this behavior will only show lenders that you’re not a reliable borrower and that they should reconsider lending you money for your car, house, etc.

Now, regularly charging items to your credit card 

 is a different story. This behavior shows lenders that you are a reliable borrower who can borrow money and pay it back in a very timely manner. This type of behavior tends to builds your credit.

So, regularly charging your card—and paying it off—is good. Racking up—and keeping—a balance is bad.

Once you have bad credit you’ll always have bad credit—

Having bad credit will bring you a whole host of sticky situations, ranging from having trouble renting or buying a home to not getting approved for a car loan. But, just like they say, “This too shall pass.” If you work on building your credit, you won’t be down in the dumps for long!

Build your credit by showing lenders that you’re a reliable borrower. A baby step? Get a credit card, use it regularly, and 

. This shows lenders that you can be trusted with their money because you pay back what you borrow each month.

How to Build Good Credit

Do you have bad credit? Are you worried about not being able to increase your credit score? That’s okay! First and foremost, we’re here to tell you that everyone has access to a complete financial plan. We will help you find financial wellness—no matter what your credit score, bank account statement, or your student loan balance. After all, everyone deserves to feel financially secure.

First thing’s first. Do you know what a credit score is? Before we dig into how to build your credit score, let’s start off with the basics of what your credit score is and why it’s important that you have a good credit score.

Your credit score is calculated based on your:

—i.e., the percentage of your available credit compared to how much you are using. Consistently maxing out your credit cards will typically decrease your credit score. No bueno.

—how long you have had your credit accounts opened. For the most part, the longer you have your accounts open, the better your credit score will be.

—Applications for credit cards and loans can ding your credit about 5 points each. Each time you apply for a new credit card, that’s a ding.

Do you know your credit score? If so, great, you’ve nailed the first step! If not, we recommend keeping tabs on your credit report and your credit score to keep your credit score nice and healthy and notice any fraudulent or accidental dings. (Note: if you notice anything odd with your credit score, contact the relevant credit agency.)

As you may know, credit impacts every step of borrowing, from buying or renting a home, to buying or leasing a car, to borrowing money for other personal reasons. It doesn’t matter the reason you’re asking to borrow money; lenders will review your credit score before they decide to let you borrow money. Why? They want to be sure you’re a reliable borrower and that they can trust you’ll pay them back.

With better credit, you’ll reap many benefits. You can earn better interest rates on loans, mortgages and credit cards; have a better chance of being approved for new home or auto loans; and get lower premiums on insurance.

If you’re reading this, you’re likely aware that having lower credit presents plenty of obstacles, from higher interest rates to low likelihood of getting approved for loans. We don’t have to belabor this point, because you’re likely experiencing these pains. That said, it’s important to remember that if you don't boost your credit, these problems only escalate over time. But, don’t worry! That’s why we’re here to help.

Ah, yes, young grasshopper. You should build your credit as soon as possible. New to the credit world? No problem! Now is a great time to get started. And, if you’re not new to the credit game but need some credit improvement, it’s not too late! Despite what some predatory lenders or misinformed friends and family members may have told you, it’s never too late to build your credit score.

This first step is easy-peasy—well, on paper, at least. The first thing you should do if you’re trying to build your credit is to 

. Not borrowing extra money means not owing extra money.

This is part of spending within your means. If you’re spending money that you have, again, you’re not going to overspend or over-borrow and find yourself in trouble later.

Keep your credit card balance to a minimum

Again, this harkens back to spending within your means. If you’re not charging lots of money on your credit card, you won’t owe lots of money at the end of the month. This also means paying off your credit card each month—the full balance for the previous month, not the minimum balance.

 Each time you find yourself at the J.Crew counter or when you’re cashing out at Home Depot, the cashier will ask if you want to save X% and open a store credit card. This is a trap! When you open a store credit card, you must know that the retailer wins, not you. Opening yet another credit card will not solve your problems, but only increase your cash owed in yet another place. Even though you’re making your money harder to track for yourself, lenders are well versed in this game; you’re not hiding anything!

Build long term credit history. Remember, your credit score is essentially a grade that shows lenders how well you can borrow—and pay back—money. The longer you keep your credit cards open, while paying off your debt, the better your score.

Building your credit score will set you up for success. With a higher credit score, you’ll get approved for a loan more easily, you’ll be able to rent that apartment or buy that house without issues, you’ll be able to lease or buy that car you’ve been needing, and, ultimately, you’ll achieve a higher sense of financial wellness.

We believe in the power of financial wellness. We’re believers that holistic health and wellness includes financial wellness. When you set yourself up for financial success—and, yes, that means having a strong credit store, spending within your means, paying off your bills on time, and having a good sense of where that next dollar should go—we believe you will find yourself happier, healthier and on the right track.

How to Build Good Credit Blog Content

Follow these tips to pay off your loans, bills, and debt—even, or especially—when you're on a tight budget

Debt may be a four-letter word, but it's also a part of most of our lives. In fact, did you know that 60% of college graduates have some sort of debt, equaling a total of $1.41 trillion in total outstanding 

? And that's just student loan debt. We're not including mortgage, auto, and credit card debt.

So, okay, most of us have some kind of debt. And it's okay! While it's typically fine to have some debt, you'll want to make a plan to pay it off, while considering your plan for the future—i.e., your retirement savings like your 401(k), 403(b), Roth, or Traditional IRA; and your rainy day fund for when life gives you unexpected emergencies.

Alright, first thing's first. Your first step is to determine how much money you have, what's coming in, what you owe, and how much you have left over to throw into savings (or entertainment). This data consolidation is called your net worth snapshot. And, once you have this in place, you'll be able to make more informed decisions.

Don't have a budget? No problem! Now's the best time to start one. Especially if you're dealing with some unforeseen expenses. Gallup found that only one in three people keep a detailed budget, so you're not alone. Just like everyone has their own favorite flavor of ice cream, everyone has their own version of a budget that works for them. For example, some people like to have a super detailed budget that tracks every penny; others prefer a budget that paints a bigger picture and tracks the main trends of their monthly cash flow. The main idea is to just find what works for you and stick to it. 

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Belonging

Banking

Borrowing

Growing

Get Inspired

Get Inspired

Guide

Home Improvement Budget Tips

Guide

How Much to Save for Retirement?

Guide

How to Budget for a New Car

Guide

How to Get a Car Loan

Guide

Should You Consider an Auto Loan Refinance?

Guide

Top Credit Myths

Guide

How to Build Good Credit

Guide

How to Pay Off Debt When Cash Is Tight

Guide

How to Pay Off Student Loans

Guide

How to Make Your Side Hustle Your Main Hustle

Guide

10 Investment Tips for 20-Somethings

Guide

Time to Consider Refinancing Your Mortgage?