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5 Things to Consider Doing When Your Credit Score Hits 740

By U.S. News & World Report

It’s true: Improving your credit can be a long, difficult process. But if your FICO score has finally hit 740, there’s good reason to celebrate. Although every bank sets its own lending standards, 740 is generally considered the crossover point between good and excellent credit. Bravo!

Wondering what you can do with your new status? Here are five things to consider:

1. Apply for a better credit card.

If you’ve been drooling over one of the hot new credit cards on the market, especially the ones offering primo rewards, now might be the time to apply. Usually, credit card issuers reserve their best products for folks with excellent credit. With a score of 740, you’ll likely qualify for most of them. Sign-up bonuses, high rewards rates and lots of fringe perks might be coming your way.

Just one note of caution: Upgrading one of your primary cards is fine, but don’t apply for every shiny piece of plastic that catches your eye. Each credit card application will cause your FICO score to temporarily drop by a few points, and getting too many cards in a short period of time will do further damage. Take advantage of your 740 score, but don’t go too far. Otherwise, you’ll put it in jeopardy.

2. Refinance your home.

Home loan interest rates are still historically low. As of last month, rates on most 30-year, fixed rate mortgages hovered around 4 percent. If your rate is substantially higher than that and your credit has improved, now might be a good time to refinance.

Mortgages are among the most difficult loans to get, and qualifying for a competitive rate requires excellent credit. Again, it’s not a guarantee, but there’s a strong likelihood that your 740 credit score is enough to help you lock in a very low interest rate. Just be sure to do the math and figure out whether refinancing is right for you; there are lots of associated costs to consider.

3. Do a balance transfer.

Struggling with credit card debt is all too common. The average household had $15,611 of credit card debt in December 2014, according to a NerdWallet analysis. When you consider most credit cards charge double-digit interest rates, that amount can feel overwhelming.

But if you have an excellent FICO score, there might be a way to ease the burden. People with credit in this range can usually qualify for introductory 0 percent balance transfer offers. This means you could shift some or all of your debt onto a card that’s charging no interest for a period of time, which will help you pay debt down faster.

Again, a word of caution: Most cards that come with a 0 percent introductory rate also charge a 3 percent balance transfer fee. This could cut into the savings you’re seeing by refinancing your debt, so think about applying for a card that waives this fee if you can.

4. Shop for car insurance.

Depending on where you live, car insurance might be a big monthly expense for you. But as your FICO score goes up, you might qualify for lower rates.

Insurers often use something called a credit-based insurance score when they’re determining how much you’ll pay. The purpose of this score is to predict how likely it is that you’ll file a claim.

Your credit-based insurance score is at least partially based on the information that’s on your credit report. So if your FICO score recently rose, there’s a good chance your credit-based insurance score did, too.

The upshot of all of this is that you might be able to downsize your annual car insurance payments, so it doesn’t hurt to shop around.

5. Upgrade your apartment.

Not a homeowner? That doesn’t mean you can realize some of the benefits that come with a higher FICO score. Landlords frequently use your credit to determine whether they’ll rent to you; some even use it to decide the amount of your security deposit.

In making the jump to excellent credit, your rental housing options will likely expand substantially. If you don’t love your current digs, you’re now in a good position to look around for something better.

The takeaway: Achieving an excellent credit status opens up a variety of opportunities. Just be sure to maintain that solid score by paying your bills on time, keeping the balances on your credit cards low and applying for new credit sparingly.

More from U.S. News

12 Simple Ways to Raise Your Credit Score

50 Ways to Improve Your Finances in 2015

8 Hacks to Ease Your Financial Life

5 Things to Consider Doing When Your Credit Score Hits 740 originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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