Can You Use Tax Refund to Boost Your Credit Score

1. Can You Use Tax Refund to Boost Your Credit Score? Did you know that the IRS refunds a yearly average of $2782? Getting a tax refund is always wonderful news. But the real challenge begins after you get the money. How do you spend it? Before you buy the latest smartphone or book a summer vacation, perhaps you can use the extra money to improve your credit score with Texas credit repair. How to boost your credit score with your tax refund with Texas credit repair  Apply for a secured credit card Secured credit cards are an excellent way to build your credit, ideal for those without any credit history. What makes them different from regular credit cards is that they require a deposit, for which you can use your tax refund. For instance, if you put down a $500 deposit for a secured credit card, you will have a $500 credit limit.  Pay off your credit card debt.

2. What if you already have a credit card? Then you can use your tax refund to pay off your debt. Most credit cards have a high annual percentage rate (APR), and paying off high-interest debts will prevent you from losing money.  Pay down your loans. As of 2022, one out of seven Americans has student loan debt, averaging around $28,950 per graduate. If you’re one of the 45 million with student loan debt, you likely want to pay it off as soon as possible. Luckily, you can use your tax refunds to pay off just about any type of debt, including your student, car, or personal loans. This will help improve your debt-to- income ratio, boosting your overall credit health.  Build an emergency fund Who knew that starting an emergency fund could help improve your credit score? If you have extra cash in the bank for your emergency expenses, you won’t need to take out high-interest loans or deal with unexpected credit card costs. Finance experts recommend saving for at least three to six months’ worth of expenses. For example, if your monthly expenses total around $2000, consider saving between $6000 to $12000 for emergencies. Are you looking for more ways to improve your credit score? Consider working with a reputable credit repaircompany inTexas!