How to Get Approved for Credit in a Financial Downturn

In a recession it’s common for many people to rely on credit cards and loans to balance their finances. It’s the ultimate catch-22 since, during a recession, these financial products can be even harder to qualify for.

This holds true, according to historical data from the Federal Reserve Bank of St. Louis. It found that during the 2007 recession, loan growth at traditional banks decreased and remained deflated over the next four years. 

Credit can be a powerful tool to help you make ends meet and keep moving forward financially. Here’s what you can do if you’re struggling to access credit during a weak economy.

Lending becomes riskier in a weak economy. Does this mean you’re completely out of luck if you have bad credit? Not necessarily, but you might need to take the time to understand all of your alternatives.

How Does a Financial Downturn Affect Lending?

Giving someone a loan or approving them for a credit card carries a certain amount of risk for a lender. After all, there’s a chance you could stop making payments and the lender could lose all the funds you borrowed, especially with unsecured loans. 

For lenders, this concept is called, “delinquency”. They’re constantly trying to get their delinquency rate lower; in a booming economy, the delinquency rate at commercial banks is usually under 2%. 

Lending becomes riskier in a weak economy. There are all sorts of reasons a person might stop paying their loan or credit card bills. You might lose your job, or unexpected medical bills might demand more of your budget. Because lenders know the chances of anyone becoming delinquent are much higher in a weak economy, they tend to restrict their lending criteria so they’re only serving the lowest-risk borrowers. That can leave people with poor credit in a tough financial position.

Before approving you for a loan, lenders typically look at criteria such as:

  • Income stability 
  • Debt-to-income ratio
  • Credit score
  • Co-signers, if applicable
  • Down payment size (for loans, like a mortgage)

Does this mean you’re completely out of luck if you have bad credit? Not necessarily, but you might need to take the time to understand all of your alternatives.

5 Ways to Help Get Your Credit Application Approved 

Although every lender has different approval criteria, these strategies speak to typical commonalities across most lenders.

1. Pay Off Debt 

Paying off some of your debt might feel bold, but it can be helpful when it comes to an application for credit. Repaying your debt reduces your debt-to-income ratio, typically an important metric lenders look at for loans such as a mortgage. Also, paying off debt could help improve your credit utilization ratio, which is a measure of how much available credit you’re currently using right now. If you’re using most of the credit that’s available to you, that could indicate you don’t have enough cash on hand. 

Not sure what debt-to-income ratio to aim for? The Consumer Financial Protection Bureau suggests keeping yours no higher than 43%. 

2. Find a Cosigner

For those with poor credit, a trusted cosigner can make the difference between getting approved for credit or starting back at square one. 

When someone cosigns for your loan they’ll need to provide information on their income, employment and credit score — as if they were applying for the loan on their own. Ideally, their credit score and income should be higher than yours. This gives your lender enough confidence to write the loan knowing that, if you can’t make your payments, your cosigner is liable for the bill. 

Since your cosigner is legally responsible for your debt, their credit is negatively impacted if you stop making payments. For this reason, many people are wary of cosigning.

In a recession, it might be difficult to find someone with enough financial stability to cosign for you. If you go this route, have a candid conversation with your prospective cosigner in advance about expectations in the worst-case scenario. 

3. Raise Your Credit Score 

If your credit score just isn’t high enough to qualify for conventional credit you could take some time to focus on improving it. Raising your credit score might sound daunting, but it’s definitely possible. 

Here are some strategies you can pursue:

  • Report your rent payments. Rent payments aren’t typically included as part of the equation when calculating your credit score, but they can be. Some companies, like Rental Kharma, will report your timely rent payments to credit reporting agencies. Showing a history of positive payment can help improve your credit score. 
  • Make sure your credit report is updated. It’s not uncommon for your credit report to have mistakes in it that can artificially deflate your credit score. Request a free copy of your credit report every year, which you can do online through Experian Free Credit Report. If you find inaccuracies, disputing them could help improve your credit score. 
  • Bring all of your payments current. If you’ve fallen behind on any payments, bringing everything current is an important part of improving your credit score. If your lender or credit card company is reporting late payments a long history of this can damage your credit score. When possible speak to your creditor to work out a solution, before you anticipate being late on a payment.
  • Use a credit repair agency. If tackling your credit score is overwhelming you could opt to work with a reputable credit repair agency to help you get back on track. Be sure to compare credit repair agencies before moving forward with one. Companies that offer a free consultation and have a strong track record are ideal to work with.

Raising your credit isn’t an immediate solution — it’s not going to help you get a loan or qualify for a credit card tomorrow. However, making these changes now can start to add up over time. 

4. Find an Online Lender or Credit Union

Although traditional banks can be strict with their lending policies, some smaller lenders or credit unions offer some flexibility. For example, credit unions are authorized to provide Payday Loan Alternatives (PALs). These are small-dollar, short-term loans available to borrowers who’ve been a member of qualifying credit unions for at least a month.

Some online lenders might also have more relaxed criteria for writing loans in a weak economy. However, you should remember that if you have bad credit you’re likely considered a riskier applicant, which means a higher interest rate. Before signing for a line of credit, compare several lenders on the basis of your quoted APR — which includes any fees like an origination fee, your loan’s term, and any additional fees, such as late fees. 

5. Increase Your Down Payment

If you’re trying to apply for a mortgage or auto loan, increasing your down payment could help if you’re having a tough time getting approved. 

When you increase your down payment, you essentially decrease the size of your loan, and lower the lender’s risk. If you don’t have enough cash on hand to increase your down payment, this might mean opting for a less expensive car or home so that the lump sum down payment that you have covers a greater proportion of the purchase cost. 

Loans vs. Credit Cards: Differences in Credit Approval

Not all types of credit are created equal. Personal loans are considered installment credit and are repaid in fixed payments over a set period of time. Credit cards are considered revolving credit, you can keep borrowing to your approved limit as long as you make your minimum payments. 

When it comes to credit approvals, one benefit loans have over credit cards is that you might be able to get a secured loan. A secured loan means the lender has some piece of collateral they can recover from you should you stop making payments. 

The collateral could be your home, car or other valuable asset, like jewelry or equipment. Having that security might give the lender more flexibility in some situations because they know that, in the worst case scenario, they could sell the collateral item to recover their loss. 

The Bottom Line

Borrowing during a financial downturn can be difficult and it might not always be the answer to your situation. Adding to your debt load in a weak economy is a risk. For example, you could unexpectedly lose your job and not be able to pay your bills. Having an added monthly debt payment in your budget can add another challenge to your financial situation.

However, if you can afford to borrow funds during an economic recession, reduced interest rates in these situations can lessen the overall cost of borrowing.

These tips can help tidy your finances so you’re a more attractive borrower to lenders. There’s no guarantee your application will be accepted, but improving your finances now gives you a greater borrowing advantage in the future.

The post How to Get Approved for Credit in a Financial Downturn appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

How I Earned Up to $4,000 Per Month Baking Dog Treats (With Zero Baking Experience!)

Hello! Are you interested in starting a dog treat bakery business? Well, good news, this article will tell you what you need to know. Plus, you can sign up for this free training workshop that will teach you how to start your own side hustle baking and selling dog treats.

Hi! My name is Kristin Larsen, and I run Believe in a Budget, a blog about personal finance and my experience with various side hustles. (It feels like I’ve tried them all over the years!)dog treat bakery business

As I’ve written about before here on Making Sense of Cents, my favorite online side hustle is working as a Pinterest virtual assistant. Managing Pinterest accounts is a great way to earn an income entirely online.

But today, I’m here to talk about a completely different side hustle, one that can be run entirely offline if you want (or entirely online, or a combination!).

While I love being able to work from home (or anywhere) on my computer, there is something to be said about stepping away from the computer and doing work that doesn’t involve the ‘virtual world’ – work that requires you to move around a little instead of being planted in front of a screen all day long!

In the case of this side hustle, it involves moving around the kitchen baking up beautiful and delicious dog treats.

Yes, dog treats!

The side hustle I’m speaking of is starting a dog treat bakery and I’m so excited to share it with you today. As a successful dog treat baker myself, I know first-hand how in-demand and lucrative this business can be.

How do you start a dog bakery?

 

How I Took My Dog Treat Bakery from Passion to Side Hustle to Full-Time Job

My dog treat bakery story started over ten years ago when I was an interior architect and designer at my 9-5 job.

At the time, I was the proud dog mom of Bella, a sweet-but-very-high-maintenance pup. Her birthday was coming up and I wanted to give her a birthday treat that fit her ‘diva dog’ personality.

I went to the local pet store and perused the aisles, but all I could find were treats filled with ingredients I couldn’t pronounce that looked like they had been sitting on the shelves for years. After a disappointing visit, I walked out the door and decided that I was going to bake Bella a treat.

This was kind of laughable since baking was not something I had done much of in my life, but I was going to figure out a way to make it work.

I decided to do some research by going to a local bakery and spending a lot of time staring at the baked goods (awkward!), trying to figure out which one I could recreate for Bella. I finally decided on a pretty cupcake adorned with white icing.

I went home, researched dog-safe ingredients and got to work planning Bella’s birthday treat. After a quick trip to Target to buy a mini cupcake tin, I started baking.

About an hour later, her birthday cupcake was baked, iced and ready to serve. Despite its small size, it was a huge success she loved it!

As soon as I saw how much she loved her treat, you could say I became a little obsessed with making wholesome, healthy treats for her. Soon, I started gifting them to friends and family.

I went from developing a single cupcake recipe to developing over 20 different dog treat recipes everything from treat bones to cookies to brownies to cakes!

Pretty soon, the friends and family who were on the receiving end of my gifts were saying: ‘Kristin, our dog(s) LOVED your treats. Can we buy some to gift? Can my friends/family/co-workers/neighbors buy some?’

With those questions, Diva Dog Bakery™ was born!

My little ‘obsession’ quickly became a side hustle, first bringing in $100 to $200 a month, then over $500 a month, just selling through word-of-mouth. It was the easiest money I had ever made!

In a serendipitous turn of events, I ended up losing my 9-5 job a few months after I started Diva Dog Bakery™. It was during the Great Recession, so I couldn’t find a job in my industry anywhere. My unemployment checks weren’t enough and I was quickly going through my savings.

I was initially stuck in a ‘dog treat bakery = side hustle’ mindset,  so it didn’t immediately occur to me to try to turn my side hustle into a full-time business. But when my money was drying up, it finally clicked: I can turn this into a full-time business!

I went all-in on my bakery and hustled hard. I sold at multiple farmers markets every Saturday (shout-out to my parents who helped me ‘be’ in multiple locations at once!), started a successful Etsy shop and also sold products wholesale.

Pretty soon, I went from going broke to making a solid $3,000 to $4,000 per month… despite the economy being in the biggest downturn since the Great Depression. 

Needless to say, I was ecstatic!

The especially exciting thing about my earnings is this was nearly ten years ago when the dog treat industry wasn’t nearly as hot. These days, my efforts could easily bring in double that!

 

The Opportunities in the Dog Treat Industry (Why You Should Start a Dog Treat Bakery)

When I first started my dog treat bakery, the idea of buying homemade cupcakes or brownies or cookies for your dog was still considered a little ‘out there.’

These days, dog owners are much more tuned in to the idea of pampering their pooches and they’re willing to spend money to make it happen.

Here are a few interesting stats for you:

  • The dog treat market is incredibly hot right now and getting even hotter… to the tune of almost 7 BILLION dollars in sales in just 2020 alone! (source)
  • Over six out of ten dog owners are concerned about the safety of the dog treats they purchase. (source)
  • Dog owners are especially interested in purchasing dog treats with wholesome, easy-to-pronounce ingredients. (source)

It’s never been a better time to get started with a homemade dog treat bakery!

 

How Much You Can Earn Baking Dog Treats at Home

If you just want to run a fun-but-profitable hobby, you can easily earn $500 to $1,000 a month with a dog treat bakery as a side hustle.

At this level, you can do all of the work yourself in just a few hours a week. If you have kids, you can also have them pitch in. A dog treat bakery is a great family business!

If you want to turn your dog treat bakery into a full-time business, you can scale it into four figures a month, or even five figures a month.

If you want to scale your dog treat bakery into a full-time business, expect to work 30 to 35 hours a week yourself. If you want to have a heavy farmers market presence, you will probably need to bring on some help for a few hours each week so you can have a presence at multiple farmers markets at the same time. (The best ones are usually on Saturday mornings.)

If things get really busy, you can bring on baking help, marketing help, shipping help and more! You can make this business as big (or as small) as you’d like.

 

Where to Sell Your Dog Treats

As I mentioned at the beginning of this post, you can run your dog treat baking business in a way that suits your lifestyle. You can run it offline, online, or both!

There are so many ways and places to sell your treats, but here are a few ideas to get you started.

Offline:

  • Word-of-mouth sales (e.g., friends, family, co-workers, church)
  • Farmers markets
  • Wholesale to local businesses (e.g., pet stores, veterinarian offices, gift shops) 

Online:

  • Etsy shop
  • Social media for local sales
  • Social media for nationwide sales

 

How Much Does it Cost to Start a Dog Treat Bakery?

Like nearly all businesses, starting a dog treat bakery comes with a few start-up costs, but you will easily earn these back when sales start coming in, or you can even take pre-sale orders! (Have I mentioned that the profit margin on dog treats is amazing?!)

Typical start-up costs for homemade dog treat bakeries in the U.S.* include:

  • $20 to $50 for the initial ingredients, plus a few inexpensive baking tools if you don’t already have them in your kitchen
  • $0 to $75 for treat packaging costs
  • $25 to $50 for a business license
  • Between a $25 one-off fee to up to a $50 per-treat fee to register your treats with your state – this will depend on your state’s regulations

*Costs and laws outside of the U.S. will vary from what is listed here.

 

Are Dog Treat Bakeries Regulated?

Yes, but not nearly as much as ‘people food’ bakeries. (Good for would-be dog treat bakers, but a little sad for our furry friends!)

In the U.S., the exact regulations you will need to follow are decided by your state and sometimes your local area (e.g., county, city). This is easy information to find out by contacting the following agencies:

  • State department of agriculture or feed control office
  • State and local health departments

You can also contact your state’s business agency and tell them you want to start a pet treat bakery. Many states have information on file about pet treat bakeries that tell you everything you need to do.

Don’t be intimidated by this process – in most cases, all you have to do is fill out a few forms and pay a few small registration fees!

 

How to Get Started as a Dog Treat Baker

When I first started Diva Dog Bakery™, I honestly had no idea what I was doing.

Although I saw success pretty quickly, there was a lot of trial-and-error because I had no one to guide me. I didn’t know anyone who owned a bakery, let alone a dog treat bakery.

The one thing I definitely did right at the beginning – and what I recommend to you if you want to become a homemade dog treat baker – was to spend some time in the kitchen learning how to make treats.

Because I wasn’t much of a baker (and maybe you aren’t either), getting a little baking experience under my belt was very helpful.

I also tested out my treats on my dogs and the dogs of some of my friends and family. Dogs may not be able to talk, but you can tell pretty easily which treats they love eating and which treats they’ll turn their nose up at!

With this data, you can start to package up and sell the most-liked treats. You can scale it from there and start to build up your business.

If the idea of going it alone on a dog treat bakery business sounds a little intimidating, I’d like to welcome you to join the Diva Dog Bakery™ course where I’ll teach you exactly how to build a thriving dog treat bakery business!

Here’s what the course covers:

  • How to best make and store dog treats (this is where you’ll practice your baking techniques)
  • How to turn your hobby into a legal dog treat business 
  • How to package your treats beautifully without hours of effort (beautifully packaged treats command premium prices!)
  • How to price your dog treats so you maximize your revenue
  • Where to sell your dog treats: offline, online or both
  • The best methods for accepting payment
  • How to most efficiently and inexpensively ship and deliver your treats
  • The best ways to promote your business so you build up a following of raving fans and repeat customers!

You’ll also receive valuable bonuses, including:

  • My full dog treat recipe book, which includes the most popular and profitable recipes I used in my bakery
  • Guaranteed analysis/nutrition labels to use on your treats (required by certain states)
  • 30 days of free access to the Diva Dog Bakery™ Community so you can get all of your questions answered while you grow your business, including live training

It has been so exciting to help new dog treat bakers launch their businesses! Cheering on every baking success and every business success is truly the best part of my day.

 

Lessons Learned from a Cupcake… and a Phone Call

I like to say that Diva Dog Bakery™ started with a cupcake.

But it really, truly started when, after gifting treats to friends, one of those friends called me and said: ‘Kristin, can I buy a bag of your dog treats?’

Until that moment, I had no idea that anyone would actually want to pay for the treats I had been making as a labor of love.

I learned a valuable lesson that day: there is a market out there for so many different products and services. Whether it’s a product or service that we dream up on our own or that we learn from a course, there is probably someone who wants to buy it from us.

We just have to figure out a way to make that sale happen… and then make it happen again and again!

 

Dog Treat Bakeries are a Great Business to Start

If you’re interested in starting a business that’s ‘outside the box’ of the typical online businesses, then I highly recommend starting a dog treat bakery. 

The industry is booming, the work is enjoyable, the profit margin is fantastic and (maybe the best reason of all) you have the cutest customers!

To get started on your dog treat bakery journey, I’m offering a free dog treat bakery workshop! Check out the sales page here and sign up for the free workshop.

If you have any other questions about starting a dog treat bakery after watching the workshop, just email me and I’d be happy to answer them.

Are you interested in starting a dog treat bakery?

The post How I Earned Up to $4,000 Per Month Baking Dog Treats (With Zero Baking Experience!) appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

What Is Austerity?

What Is Austerity?

Austerity policies are nothing new. But talk about them in the news has recently escalated. In response to its ongoing debt crisis, the Greek government is preparing to implement austerity measures aimed at helping the country regain its financial footing. If you didn’t major in economics or you have no clue what austerity means, read on to find out how this fiscal program works.

Check out our personal loans calculator.

Austerity: A Definition

Trust us, austerity isn’t as complicated as it sounds. Austerity is a type of economic policy that governments use to deal with budget deficits. A country faces a deficit whenever it’s using more money than it’s earning from tax dollars.

By taking on an austerity package, a government hopes to reign in its spending, improve the status of its economy and avoid defaulting on its unpaid debt. Governments usually take on austerity measures in order to appease their creditors. In exchange, these lenders agree to bail out countries and allow them to borrow more money.

If you look up the word austere in the dictionary, you’ll see that it means severe, grave, hard, solemn and serious. Indeed, austerity is nothing to joke about.

Austerity Measures

What Is Austerity?

Austerity plans normally involve increases in different taxes, (property taxes, income taxes, etc.) budget cuts or a push to incorporate both. Government workers could lose their jobs or see their wages and benefits either decline or become stagnant. Hiking up interest rates, adding travel bans and keeping prices at a fixed level could be other strategies put in place to reduce spending.

Naturally, austerity measures typically aren’t viewed in the best light because they mean that there might be fewer government programs available to the public. Aid for veterans and low-income families, healthcare coverage and pensions are some of the benefits that normally take a hit when a country’s using an austerity package. Government services that aren’t eliminated might not be as comprehensive or as beneficial as they once were.

As you can see, in an austere environment, conditions are tighter overall. Historically, austerity has been implemented in the US during tough times including World War I, World War II and the Great Recession of 2008.

Greece’s new austerity package – which government lawmakers finally accepted in July 2015 – will feature less government funding, higher taxes and cuts to pension plans. As a result of this deal, the country was allowed to begin talks with its creditors about a third bailout.

Related Article: All About the Greek Debt Crisis

The Problems With Government Austerity 

Experts on the economy tend to go back and forth about how effective austerity can be. Some believe that instead of turning to austerity, the government should pump out more money and borrow as much as possible if an economy is on the rocks.

From a political standpoint, austerity is often controversial and results in riots and demonstrations. Anti-austerity protests erupted in Greece, where quite a few folks say that past austerity programs have only made social and economic conditions worse.

Beyond slowing down the economy, an austerity bill can cause a country to remain in its debt crisis, particularly if it’s in the midst of a recession. As fiscal austerity decreases spending, GDP can go down while unemployment goes up. Consumers can get nervous and stop spending and investing their own money.

In short, austerity policies can make life even more difficult for people who are already struggling. That’s why governments tend to turn to them as a last resort if other strategies aren’t working.

Why Austerity Might Not Be So Bad

What Is Austerity?

Notable European creditors have argued that austerity can be beneficial to a country’s long-term economic state. For instance, the International Monetary Fund (IMF) has previously reported that austerity has done more damage than anticipated. But the European Central Bank released a paper saying that austerity has been helpful, at least for some of the weaker eurozone countries.

In fact, austerity has helped strengthen the economies in European countries like Latvia and Iceland. Although Spain’s unemployment remains high, its economy is in better shape overall. Ireland has made considerable progress as well toward rebuilding its economy.

Proponents of austerity policies say that they can make investors feel more optimistic when a country is being run more responsibly. Austerity has the potential to bring a shrinking economy back to life as everyday citizens invest in the private sector instead of relying on support from the federal government.

Try out our free investment calculator. 

The US used austerity measures between 2010 and 2014. Not only were our policies harsher than those employed by the governments in the UK and other European nations, but our economy fared better than theirs.

The Takeaway

The point of austerity is to tighten the government’s belt, bring a country’s debt back down to a more manageable level and stimulate an economy that has stopped growing. Countries generally try to meet these goals by cutting spending and raising taxes.

The debate over whether austerity works continues but one common theme has emerged. Timing matters. Some critics suggest that cutting too much too quickly during a recession can be painful. When introduced more slowly, however, (or when the economy is doing very well,) austerity measures can turn things around.

Photo credit: Â©iStock.com/Eltoddo, ©iStock.com/DNY59, ©iStock.com/Peter Booth

The post What Is Austerity? appeared first on SmartAsset Blog.

Source: smartasset.com

What Is the FICO Resilience Index?

Three young colleagues wearing aprons look at FICO Resilience Index scores on a laptop

By the end of May 2020, more than 40 million people had filed unemployment claims due to COVID-19 and the resulting economic shutdowns. Governments, charities, and even creditors scrambled to put programs in place to support people during this time while also mitigating future economic fallout.

And this isn’t the first time creditors have found themselves working to support borrowers while worrying about their own bottom lines. It’s an issue that occurred during the 2008 recession and one that occurs regionally during national disasters. The new FICO Resilience Index is a tool that creditors might use to help better prepare for times of economic crisis. Find out more about this Index and how it might impact you below.

What Is the FICO Resilience Index?

The FICO Resilience Index is a numeric score each
person is given. The score is supposed to tell creditors how likely a person is
to continue paying their bills as agreed during an economic downturn.

The Index, which is brought to you by the makers of the
popular FICO Score for creditworthiness, ranges from 1 to 99. In contrast to
credit scores, where a higher number is better, a lower FICO Resilience Index score
is better. Here’s how the range breaks down:

  • 1–44: More resilient to changes in economic
    conditions
  • 45–59: Moderately resilient to changes in
    economic conditions
  • 60–69: Sensitive to changes in economic
    conditions
  • 70–99: Very sensitive to changes in economic
    conditions

So, if you have a FICO Resilience Index of 10, it indicates that there’s a good chance that during economic upheaval such as a pandemic or recession, you’re still going to pay your bills on time. If you score a 90, that’s considered much less likely.

How Is the Resilience Index Different from a Credit Score?

A credit score is meant to indicate the likelihood that you will pay your bills on time and as agreed at any time. The Resilience Index rates how sensitive you might be to economic changes and the likelihood that you may be unable to pay bills during a downturn or crisis.

For example, the top factor in your credit score is
whether or not you pay your bills in a timely manner. Your FICO Resilience
Index score is more concerned by your total balance and number of open
accounts. If you balance is high and you have a lot of open accounts, you may
be less able to pay these off during times of crisis.

Here’s what the FICO Resilience Index looks for:

  • Low total balance on revolving credit in comparison to limits
  • A lower number of open, active credit accounts
  • Fewer hard inquiries within the past 12 months
  • A longer credit age, which indicates more experience managing credit

You can improve your FICO Resilience Index by reducing hard inquiries and not opening new credit accounts unless they’re necessary. But the index relies heaviest on credit utilization. Keeping your credit card and other revolving account balances as low as possible can improve your index score.

Does the FICO Resilience Index Matter to You?

As of mid-2020, the FICO Resilience Index is new, and
not a lot of organizations have integrated it into their lending processes yet.
In the beginning, it might not be especially relevant to consumers. However, as
organizations start to integrate it, there’s a good chance creditors may
consider both your credit score and your resilience number when approving—or
denying—your application.

Where Can You See Your FICO Resilience Index?

To have a FICO Resilience Index score, you must have at least one account that was reported to the credit bureau in question in the past 6 months. You must also have at least one account that is at least six months old.

As of July 2020, the FICO Resilience Index is being
provided in pilot testing to lenders. FICO is partnering with Equifax and
Experian to include the index alongside credit scores when lenders conduct a
hard credit inquiry. As of July 2020, the index scores were not yet made
available to consumers.

Does This New Number Make Credit Scores Less Important?

The FICO Resilience Index doesn’t reduce the importance
of your credit score. Lenders are still concerned with whether or not someone
is a “good risk.” Even with a strong resilience number, you may find yourself
getting turned down for loans or credit cards if you have a poor credit score.

You can’t check your FICO Resilience Index number at this time. But you can check your credit report and scores and make good financial decisions. In many cases, what’s good for your credit score is also good for your Resilience Index. Start today by signing up for Credit.com’s Credit Report Card or ExtraCredit. ExtraCredit offers 28 of your FICO scores for review, and they’re updated regularly—helping you stay on top of your credit trends.

Sign Up Now

The post What Is the FICO Resilience Index? appeared first on Credit.com.

Source: credit.com

9 Ways to Support Small Businesses Without Breaking the Bank

We all have our favorite small businesses, including our go-to date night restaurant and favorite thrift store. These places serve more than great food and looks — they build jobs in the community, put children through school, and are the realization of your neighbor’s dream. 

These stores are built on hard work and love, and supply some of the best quality products you can find. Small businesses are a great sign of a thriving economy, but they’re also the first to suffer from economic downturns, like 2020’s COVID-19 recession. This is why it’s more important than ever to find ways to support your community’s businesses.

There are many reasons why small business success is vital. Not just for the economy but for our communities. That’s why Small Business Saturday (November 28) is one of our favorite times of the year, and why we collected these ways you can support small businesses without breaking the bank (or leaving the house!).

Shop Small Businesses

Shopping small is the easiest way to support community businesses and clear your holiday list. Shopping locally doesn’t have to drain your wallet, either.

Small businesses generate 44% of U.S. economic activity.

1. Skip the Hallmark Card and Support a Local Artist

Cards are a classic gift for any and all celebrations. They’re small, affordable, and easy to personalize. This year skip the grocery store and see what artists you can support while still getting beautiful and unique gifts for your family and friends. 

Most cities will have galleries, boutiques, and even tourist shops that display locally printed and designed cards to choose from. If you don’t have a shop near you, you can browse thousands of creators on Etsy to find the perfect design for each of your loved ones. 

2. Send Gift Cards

Gift cards are perfect for acquaintances, long-distance giving, and little acts of kindness every now and then. Instead of collecting Amazon and Starbucks cards, see what your local spots have to offer. 

Most restaurants and stores offer a gift card option, and you don’t have to waste the plastic! Send your gift via email to anyone, anywhere. So go ahead and thank your first mentor for their glowing reference with a gift card to their favorite coffee shop. 

3. Shop Throughout the Year

It’s true that handmade products can get pricey, but you’re ultimately paying for quality. If you’re already pinching pennies for the holiday season, start thinking about next year. Buying gifts for loved ones as you find them throughout the year is the best way to collect beautiful gifts without using credit. Plus, small businesses can use the boost year-round. 

Show Support From Home

Mockup showing someone fill in an instagram story template with favorite shops.

Download button for instagram story template.

Most of us have a budget that prevents us from buying a new wardrobe every month and eating out every weekday, so it just isn’t feasible to buy from all of our favorite local artisans all of the time. That doesn’t mean you don’t love them, you’ll just have to get creative to show your support from home. 

4. Share Your Favorite Products

When you do buy something new, take a photo! Sharing your favorite finds online and tagging the store is a great way to promote their products and quality to your friends and family. Even if you’re not buying, sharing a wishlist or their newest product could earn them another sale or new followers. 

“I think people forget that their voice has influence, whether they are a huge celebrity or a humble stay at home mom. It’s amazing just what one post can do for small business.” — Autumn Grant, The Kind Poppy

5. Write a Review

You should let the world know when you find a shop you love. From Google and Yelp to a company Facebook page, leave a review to let others know they’re in good hands. Positive reviews are some of the best tools businesses have to convert sales. 

“These types [local] of businesses live and die by word of mouth. Their reviews are everything to them. Now that everyone can look up the average rating of a business or service, it’s vital for businesses to collect positive, honest reviews.” — Dan Bailey, WikiLawn Lawn Care

If you do leave reviews, detailed thoughts and photos perform the best. These give the consumer plenty of information and help your review seem authentic. Plus, reviews can help platforms like Etsy and Google know the business is valued. 

6. Refer a Friend

Tell your friends when you find a new shop or service and share the love. Your friends trust you and likely have a lot of shared interests, so this word of mouth is a great way for businesses to earn customers. 

“A referral is the single best compliment to a business owner. Trust me.” — Brian Robben, Robben Media

If you have friends and family from out of town you may also want to keep your favorite businesses in mind for when they visit. Keep a list of local restaurants, cafes, services, and shops that they can’t get anywhere else and take your friends on a local tour. 

Keep in Touch

Businesses have more ways than ever to keep you in the know, so make sure you’re subscribed to keep in touch! Newsletters and social media are a good way to keep your local faves and their promotional offers top of mind. 

Mockup showing someone filling in their wishlist on instagram.

Download button for holiday wishlist instagram template.

7. Sign-up For Newsletters

Most businesses send regular emails to notify you and other customers of their store details and deals. Newsletters are great ways to find coupons, sales, and new items you’ll adore. Just subscribing isn’t enough, though. Make sure you actually read their news and whitelist the email so you never miss a thing. 

8. Follow and Interact With Their Social Channels

Social media is another easy way to stay in the know; it can also organically promote a business. When you follow a business, platforms learn more about who else may be interested in their offers. Stay active and like and comment on their posts, too, to increase their visibility and trust with other shoppers. 

9. Swing By the Shop

Ultimately, the best way to support a business is to stop by and visit. You never know when something will catch your eye, and it’s a great way to share your find with friends. You may also get the chance to talk with the owner and learn more about the business while sharing your support. 

“Drop a note to them of encouragement. Tell them why you love them and what they mean to you and the community…We’ve been absolutely floored when people have taken time out of their day to write us a note, telling us how much they like us/our product.” — Meaghan Tomas, Pinch Spice Market

No matter the product or service, small business owners will appreciate hearing that you love their shop and can benefit from your support. Tag a friend, buy a gift card, or write a review to help your favorite stores without busting your budget. 
Small Business Administration | G1ve 

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Source: mint.intuit.com