How Becoming an Authorized User Can Help You Improve Your Credit

People often ask me how they can start improving their credit.

One of the first questions I ask them is if they have any open revolving accounts. When working towards repairing your credit, “actionable” items improve credit. By actionable, I mean accounts where positive changes occurred.

Examples of actionable accounts are open credit cards, loans, or car payments. Keeping these open accounts in good standing is key when attempting to increase your credit score. Another actionable item can be an item coming off or falling off of your report. But what if you are like I was during my worst financial period? My credit was so bad that I wasn’t approved for respectable credit cards.  By respectable I mean the ones that don’t charge you a $100 annual fee, while only allowing a $300 limit and a 30% interest rate. Items were falling off my report. My student loans were in deferment but I did not have any “actionable” items to improve my score. After conducting extensive research, I realized becoming an authorized user was my best bet. authorizedpersonnel An authorized user, also known as piggybacking, is when the primary credit holder adds an additional person to a new or existing credit account. Not to be confused with a card holder, the authorized user submits their social security number and receives the payment history of the account they are authorized for on their credit profile. They also have access to the card yet have no liability to pay. The advantage of being an authorized user is if the person has excellent payment/ card history, it will reflect on your credit report simultaneously boosting your credit score. The disadvantage is that if that person begins to fall behind on payments, that negative information will also reflect on your credit report.

Meanddadatnicolesgame

Me and My Dad, 2008

I became an authorized user on one of my father’s accounts.  It was one of my last financial requests as I dug myself out of my parent’s pocket and worked on becoming a financially responsible adult. He designated me as an authorized user on the credit card account with the best payment history and a decent line of credit. I did not request access to his credit card because the access was solely for credit building purposes. My credit score increased tremendously as a result of being an authorized user. I received the fruits of his positive payment history and credit limit. Since he maintains a 10% credit utilization rate, my available credit amount increased by a few thousand dollars. 

During my research I came across several horror stories. They ranged from parents designating their children as authorized users and awarding their child a card, only for the child to go off to college and charge everything in sight to girlfriends adding a boyfriend as an authorized user and failing to have him removed after the relationship ended…we know how that ends.

The important thing to consider when becoming an authorized user is STABILITY and interest.  I don’t recommend asking a co-worker or a boss if you can be added as an authorized user…can we say awkward.

Ask your family. Parents, grandparents, siblings, aunts, etc. Reassure them that you only want access to their payment history to help you boost your credit. But also make sure that they are stable. For instance, if they can’t afford to miss a paycheck , you might not want to become an authorized user on their accounts. Remember if they stop paying, IT WILL REFLECT ON YOUR REPORT! I know my father is invested in maintaining his good standing as well is being careful not to adversely impact my credit.

Do you have experience adding an authorized user or being an authorized user? How has it helped you? Or what advice do you have for others considering this?

3 Ways to Use your Tax Return

Ahhh it’s tax season.

Sidewalks and curbs are decorated with empty flatscreen TV boxes. People are venturing out to treat themselves to dinners and other luxuries they couldn’t afford over the past year. Stores are discounting merchandise and people are ready to spend spend spend. shopping-spree

It’s easy to get caught up in the income tax spending season. After all, if you have poor spending habits, these will only be exasperated by the lump sum of money you received after filing your taxes. But you can also used this money to get ahead and get your goals going.

 

Here are three ways I urge you to consider using your income tax return:

Pay off a Debt- Sometimes even the best of us find ourselves faced with unexpected credit card debt .Many of us have a debt that we want to pay off and only use our income tax to pay a portion of that. Take advantage of receiving this chunk of money and pay it off for good.
If it s a credit card, once you have paid it off don’t use it or make sure you only charge things you can afford to pay off within that month. If it’s a collection debt or something similar make sure you have everything in writing including the payment agreement and a letter confirming that you paid off the debt.

 

Kick start your investment portfolio- Several people stray away from investing because they don’t believe they have enough money to make the initial investment.  Consider allocating a percentage of your refund for investing. While you need a decent chunk of money (usually $500 min) to start your investment fund, you can contribute as little at $50 per month. I chose to do this with a portion of my return and was able to find a financial adviser that worked off contingency.

financial-advisor

Do something that will change your life or your family’s I’m also big on enhancing the quality of our lives. While I consider paying off debt to be a big life changer, if you have money left over, invest in you. This year for instance I am using my a portion of my income tax return to take my first trip to Africa. Last year I used  a portion of mine to visit Europe.

Consider using your income tax to invest in your happiness whether it’s that life changing trip, saving for a big move, or attending a conference or classes that will help you improve yourself and working habits. Note: pay attention to how you define happiness. In my opinion it this spending option should help you accomplish something you’ve always wanted to experience.

If you have not already filed your taxes you should do so pronto. If you are low-income, there are a variety of organizations available to help you for free. If you are not low-income, consider doing them yourself or ask your peers for recommendations.

So did you get an income tax return this year?

How did you or how do you plan to spend yours?

Discover New Ways to Save Money on Your Commute To Work

Living in New York  is exciting but also expensive! One expense New Yorkers understand very well is the cost of commuting. Buses, taxi’s, trains and rental cars, all add up and can really take a toll!

There are a few thing that you want to consider as you plan your monthly commute, for example;  how do you decide which metro card you should purchase? Keep reading and we will break down price per swipe to discover which metro card you need for your specific commute.

For the average work week, I use one fare and one transfer each way. With the current fare, that cost me $5.00 a day. With a 5 day work week, that brings to a total of $25.00 on traveling to and from work. But of course there is more to life than work. If I make one or two trips outside of my routine in a week, then it still makes sense to pay per ride, however, as soon as I take the 13th trip, I am no longer getting best value.

Most of us are making 13 trips or more per week, and should make the investment in the $30,  7 day unlimited. Even thought you may not want to make that commitment it is quite easy to go over 13 rides. (Work, plus two other trips with in the week.)

ways to save money, ways to save money on commuting, ways to save money for a trip, best way to save money, tips to save moneyWhen is it time to invest in a monthly unlimited?

Once you are making 48 trips a month, (12 trips a week or more) It’s actually a better investment to purchase the $112 Monthly Metro Card. (remember when this only cost about $94!?) This means that you are getting more for your money using a monthly metro card if you are traveling to and from work, and going out at least twice on the weekends.

Some times it can be a challenge to pay that $112 up front, but I hope this post will encourage you to write it into your budget. Recently I have been paying per ride, but numbers don’t lie, I need to go back to the monthly card.

I encourage you to check with your employer about pre-tax commuter benefits. Also, learn more about pre-tax commuter benefits here:  web.mta.info/mta/farebenefits.htm  This federal benefit allows a portion of your paycheck  to go towards transportation. This benefits you because the amount comes out before taxes.

Example: Your gross pay check is $100 and you are contributing $10 to pre-tax commuter benefits. You will only pay taxes on the net of $90 instead of $100. This will reduce the amount of taxes you pay. It works in your favor because you needed to pay for your transportation anyway, so why not budget exactly what you need and pay less taxes on your take home check.

60 trips per month is not a lot. Between commuting to work, and heading into the city on weekends, the average New Yorker can easily hit 60 rides. At 60 rides per month using a monthly metro card, you are only spending $1.87 per ride. That is a fantastic value!

I know it can be tough to pay that $112 up front, but I hope this article gives you the information you need, to make the best decision, for you and for your pockets.

As for me, I am letting go of the $10 cards here and there, signing up with my employer, and I will start using a monthly metro April 1st!

PS, there is talk of a fare hike coming to NY… Stay tuned!

<3 metrocard-machine

Resume Writing 101

photo-e1392335359749You are talented, intelligent, experienced and fabulous. You have identified your dream job, or you are ready for a promotion and want to advance in your organization or corporation. You know you are ready, and we know it too but   there is one person who you need to prove it to, the hiring manager.

Your resume is a critical document for your career advancement. It will proceed most interviews, and even telephone conversations. This is your first impression professionally. A fab finance resume is one that has been reviewed, updated, edited and customized. Follow these tips to ensure your resume is reflecting the copious amounts of awesome that you are.

Update: Your resume should always, always be updated and ready to go. When you are networking and somebody say “send me your resume” what they are really saying is “send me your resume right now before I forget you even exist” Harsh as it may seem, you really do have a short amount of time. I suggest with in the business day or before noon the next day. You cant do this if your resume is not updated with your most current education or experience.

Customized: If you are starting your job search, you need to make the effort to read the ENTIRE job posting. You should be using the language and verbiage of the posting as much as possible. If your resume says worked with teens on community service, but the job posting says “seeking energetic  youth worker for inner city teens” then guess what your resume needs to say?

High energy, compassionate youth worker with over 5 years of experience leading services projects for New York City Teens.  Your resume needs to be customized for two reasons, the HR robots who will be shifting through the millions of emails will be looking for specific key words. Those key words are not a mystery, they are in the posting! When your resume is read by the person who wrote the posting, they will have an “ah-ha” moment and feel like you are exactly what they are looking for, because you are using their language.

Review: Have your resume reviewed my different people. Utilize resources like the library, career centers, workforce development centers and family and friends. I got into my career path because I was strategic with who I asked to review my resume. I asked a colleague to review my resume, (knowing she would be hiring soon) and with that gesture, I was unofficially submitting my resume to her. The rest is history.

Edit: Don’t be afraid to make changes to your resume, whether it is format or content. Do your research to see what resumes in your particular field look like and be willing to adjust accordingly. Here is a portion of a resume I recently edited for a client. I adjusted both the format and content while keeping true to the individuals experience and skills.

Resume Edited Resume

 

 

 

 

 

 

 

 

I hope these pointers were helpful. Recently I gave a promo on Instagram victoriafab_ where I edited 5 resumes for free. The response was overwhelming! Stay tuned, there will be similar promotions in the future.

 

Guest Post- 5 Lessons From Your Mom That Can Teach You About Money

After a long weekend, I’m going to show a little love. The following is post that was featured on the blog my new fabulous friend, Tiffany aka The Budgetnista. Aside from being an amazingly inspirational individual, Tiffany is the author of the Best selling book The One Week Budget

Here are  5 favorite lessons from your mom that can teach you about money

Lesson 1) Clean-Up Your Mess:
Who’s mother hasn’t chastised them about cleaning up their room? Many of us with cluttered rooms as kids, are now money-messy adults. We have no budget, no system for saving or paying down debt, and no plan for our credit. Most of us are just winging it, well…. not me (kidding, kinda).  Just like a messy room leads to less productivity, so does a chaotic financial life.
The Solution:
Begin cleaning up by creating a financial file system. Stop groaning… It’s pretty easy. Financial guru, David Bach, details how to do so in his bestseller, the “Finish Rich Workbook”. I used David’s system in my mid-twenties and still use it now that I’m a super, young–looking 30-something.

Lesson 2) A Place for Everything and Everything in its Place:
Candi Sparks, CEO of Sparks Fly, mother of two, financial literacy consultant, trainer and author of the kid, money, book series, “Can I Have Some Money?“, got this lesson from her shero, her own mom. She says, “this lesson reminds me that we create our own financial atmosphere by putting money where it belongs, or in other words, allocating assets. These days, most people live in a financial atmos-fear, but that doesn’t have to be the case.  We can take control of our money by putting it in its proper place.”
The Solution:
Candi suggests that we first put our money into categories: spending, saving, donating and our long-term goals. Take it a step further and separate your money into multiple bank accounts, then re-name each account online, so you and your funds stay organized.

Lesson 3) Finish Your Food
Moms understand the value of not being wasteful, especially when it comes to food. According to United Nations’ data, as much as 40% of food in the United States is wasted. That’s a lot of green, and I don’t mean spinach. Wasted food, equals wasted money.
The Solution:
My friend in college invented a game called, “Clean the Cabinets”. She would refuse to go food shopping until she’d eaten virtually all of the food she had available at home first. Most of us buy stuff we already have and therein lies the waste. Play your own version of “Clean the Cabinets” and watch how much you save on groceries.

Lessons 4) Mind Your Business:
Author Hannah Seligon, in a New York Times article asserts that, “that entrepreneurship can be a viable career path, not a renegade choice. Chike “EntreprenuerCoach” Uzoka, business coach and author of the “Young Man’s Guide to Entrepreneurship“, agrees.  He credits support from him mom for helping him make the leap from Wall Street to owning his own business.
The Solution:
Chike tells his clients to find their passion first. He says this may take awhile and that’s OK.  After identifying what you love, Chike suggests new entrepreneurs begin to think about how your passion can make you profits. This is your business model. Nothing kills a passionate venture faster than lack of revenue.  These first two steps are only the beginning of the journey that is entrepreneurship.

Lesson 5) Be Nice to Your Brother (or Sister):
Most moms would agree, giving is receiving. Aren’t they always reminding us to be nice to our “brothers and sisters”? In this age of perceived lack, the best way to activate abundance is through genuine, generosity. Helping other people is essentially helping yourself. It’s good for the soul and good for the wallet too.
The Solution:
Pick a charity, organization, religious group or individual that you can commit to helping for the next 6 months. Define what that help looks like. Will you give your time, resources, funds or expertise? Each year my company, The Budgetnista, donates 10% of its gross profits to a new nonprofit in my community. It’s awesome to see first-hand how my gifts make a difference.

– Tiffany Aliche

MEandMom

Me (Tonya) and My beautiful mother taking a break from walking down the Eiffel Tower.

What are some of the lessons you learned form your mother that you can apply to your finances?

Beauty on a Budget

Girly moment alert!

I am a make-up wearing feminist. While I don a more natural look for everyday occasions, you will rarely catch me out in public for an extended period of time without some form of make-up on. Blame it on my 6 years of working for Estee Lauder during undergrad and then briefly after college.

My skincare regimen and regularly used cosmetics are two things I tend to splurge on as I have rather acne prone, extremely oily, and pretty temperamental skin. So you can imagine I cut costs wherever I can. While I absolutely refuse to part with my Spiked brow pencil from MAC, traditionally I’m less loyal when it comes to liners and mascara’s. That is until three weeks ago when I found a drug store eye liner that has trumped any liner I have ever used.

If you are looking to cut your make-up budget one product I recommend without hesitation is Covergirl’s Perfect Point Plus liner. It goes on smooth, isn’t chalky, and is pretty long wearing yet easy to remove if you screw up application.

CGPerfect PLus

It’s only $5.75 on sites like soap.com who also currently has a buy one get one free special on them.

 

 

 

 

 

I’m learning that being financially fab isn’t so much about deprivation, its about making well thought out, financially responsible decisions.

So what is a credit score?

Most of us are pretty familiar with the words credit score and what they mean for…almost everything in your life at this point. All the information on your credit report is measured and weighed, and the bureaus assign a score to your report for lenders to use. But most people don’t know what formula is used to ultimately take all of your payment histories, balances, etc. and calculate it into one number. So what is in a credit score?

Note:Each bureau may report different scores b/c all creditors do not report to all bureaus. Click To Tweet

Some factors that weigh into your credit score count more than others:

  • Payment history (35%). On-time payments mean a higher score. Late payments, delinquent or overlimit accounts, bankruptcies, and liens will significantly lower your score.
  • Debt-to-Credit Ratio (30%). This is also called “revolving utilization” and is specific to your credit card accounts. If your credit limit is $1,000, creditors don’t want to see you maxing out the entire credit limit. Try to keep your total revolving utilization ratio as low as possible – 30 percent is good but 25 percent is better and if you really want to maximize your credit score, aim to keep your revolving utilization at 10 percent or less. This goes for your total revolving utilization and for each individual credit card. Maxing out your credit lines can lower your score.
  • Length of credit history (15%). This shows how long you have been using credit and how you have managed your finances in the past. The longer your credit history, the better. Avoid closing accounts which have been opened longer, even if you don’t use them.
  • New credit accounts and inquiries (10%). This includes accounts you’ve opened recently and recent inquiries from companies you have applied to for credit. Credit inquiries remain on your credit report for two years but are only factored into your credit score for the first 12 months. The main point to remember is that applying for a lot of credit in a short period of time can lower your score.
  • Diversity of Credit (10%). Lenders want to see that you can manage other types of credit such as installment loans and mortgages.

It’s fairly difficult to live every moment of your credit life with this these percentages and components in mind. But they are very helpful when setting a strategy for improving your credit. My first lines of action to improve my credit were to:

1.Pay off any existing judgements that weren’t scheduled to fall off within the next year.

2.Focus on my payment history of my existing accounts

3. Boost my score by becoming an authorized user.

4. Work on my utilization and paid my accounts down to under 25% utilization.

Credit Repair strategies aren’t one size fits all because there are unique we all have situations that impact our financial situation. However understanding the make-up of your score and how credit works are key components of a positive credit standing.

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Created by nationally recognized millennial money expert Tonya Rapley, My Fab Finance is a leading financial education and lifestyle blog for millennials who want to become financially free and do more of what they love.
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