4 Ways to Improve Your Finances and Boost Your Financial Literacy

April 27, 2022

4 Ways to Improve Your Finances and Boost Your Financial Literacy

April is Financial Literacy Month. And while technically it’s a celebration, it’s also a challenge. Truth be told, most Americans have a flimsy grasp on managing and investing their money. The average score on the US National Financial Literacy Test equates to a “D” on the grading scale. So if you’re unsure about how mortgages work, or if you have been surprised by sudden shifts in your credit score, this month is an opportunity to level up your financial prowess and set yourself on track for a fiscally sound future. 

Here are four steps you can take today to start improving your finances.

The Path to Financial Literacy and Success

What are some financial moves you can make right now to get back on track with your finances? Consolidate your debt, understand your credit score, learn how to apply for a mortgage loan, and compare loan options.

Consolidate Your Debt

Debt consolidation is a hot topic because it is one of the most powerful steps an individual can take to get their finances back under control. Massive credit card debt is one of the most devastating traps we can fall into. At times, it may even feel hopeless, but a little education here can go a very long way. There are programs that can significantly lower all of your high-interest debts into a single, low monthly payment. This can reduce not only your monthly payment and interest rate, but the stress of juggling multiple payments too. 

It’s important to note that refinancing through a cash-out mortgage will affect your credit score — even if minimally. That’s why it’s important to shop for different loans and understand how your credit score works. This way you can choose the best loans and time your inquiries appropriately. 

To get a quote on a cash-out refinance mortgage, visit our Debt Consolidation page. 

Understand Your Credit Score

Taking some time to understand how credit scores work is critical to having yours work in your favor. Of course, everyone has a credit score; it’s a three-digit number that lies somewhere in the range of 300 to 850. The higher this number, the more financing options — and better rates — you will find available to you. Behaviors that affect this number include the number of accounts you have open, the percentage of utilized credit on your credit lines, your payment history, and the duration of your credit history.

Credit Score Tip: Don’t automatically cancel your oldest credit card when you finally pay it off. This can actually have an adverse effect on your score.  

Generally speaking, a credit score above 720 is considered very good. On the other hand, too low of a credit score can preclude you from certain financing options and the best rates, making it more expensive or essentially impossible to rent or find loans for things like homes and cars. 

To explore this topic in greater detail, check out the Understanding Your Credit Score lesson in our Education Center.

Learn How to Apply for a Mortgage

Applying for a mortgage will look different to everyone depending on your situation. Are you self-employed? Looking to renovate your home? Maybe you’re hoping to pay off your student loans at a better interest rate. With the end date for national student loan deferments set back once again to the end of August, now is a great time for those with student loans to get savvy about refinancing options before interest starts accruing again.

Different mortgage scenarios require different documents and information. Requirements can also vary from lender to lender, so be prepared for that. Still, an appropriate checklist can give you a good idea of how to organize your information as you shop for your best loan terms.

Prepare for the mortgage loan application process with one of our Mortgage Application Checklists.

Compare Loan Options

You have options when it comes to home loans. Just because one set of terms seems like a good fit doesn’t mean you shouldn’t shop around a bit. When you consider the fact that a single percentage point can make the difference of thousands of dollars over the course of several years, it’s always worth the extra effort. 

This process isn’t as confusing as it may seem at first, and once you acquire everything you need to apply, you’re halfway there. Need some help identifying whether a fixed-rate or adjustable-rate loan is best for you? Not sure about what you should expect to pay up front? Feel free to schedule a call with a loan officer. We’ll be happy to walk you through the process and recommend next steps.   

If you already have your loan estimate(s), get started determining your top option through our Compare My Rate online tool.

For more information to help you boost your financial literacy and get your personal finances on track, check out our full Mortgage Education Center today.