What You Need to Know About Credit Scores

If you’ve been following me for a while, you know I talk about credit a lot. As a financial therapist, some of my time with clients is spent simply ensuring that they understand all the financial terms that get thrown around. An area ripe for confusion is credit scores. I realize I haven’t broken down what goes into a credit score. In this video, I answer the questions: What is a credit score? Why is it important? And, how can I find it?

  • WHAT Your credit score is a three-digit number that ranges from 300 to 850, that tells lenders whether you are a safe person to lend money to. You should really be aiming for a credit score for 700 or higher. Even though 850 is considered perfect, once you pass the 700-740 mark, it’s basically all considered excellent. You really don’t want that score to dip below 600 because your odds of getting approved for things is low and the odds that you’ll have a higher interest rate increases.

It doesn’t matter if you don’t want a credit card. A credit score helps with many aspects of your financial life and may come into play in other ways.

Your credit score impacts things like your car insurance rates, loans, whether or not you can be approved for a mortgage or apartment, and some employers now pull credit scores, especially if you are doing anything in the financial world. Even if you aren’t a “credit card person,” you still need to have a good credit score.

  • How? How does your credit score get calculated? There are so many myths out there about how your credit score gets calculates so I’m going to break it down for you as there are a few factors that go into it.

The two biggest are:

  • On-time payments--Accounts for 35% of your score. On-time payments means you are making your payments on-time, pretty straightforward.

  • Credit utilization or credit ratio--Accounts for 30% of your credit score. This one is a bit trickier to break down. You want to be utilizing 30% or less of the credit you have available to you. Let’s say you have a credit card with a limit of $1,000, you want to not have more than $300 charged onto that card. If you are charging $600, $900 out of that $1,000 limit, your credit score will go down because you are using a higher percentage of the credit available to you. This is why people in the travel hacking game often say their credit score goes up. Because they continue to spend little compared to the amount of credit extended to them. So they go from having a $1,000 credit limit up to $50 or $70,000 limit but they are still charging very little on it which makes their credit utilization lower, and thus, better.

  • Length of credit--15% of your score. How long you’ve had your credit line open

  • New credit--10% of your score

  • Types of credit--10% of your score. This is a variety of types of “loans” or credit. For example, a credit card is considered different than a car loan or a mortgage.

So really, the bulk of it is to pay your stuff on time and to not over-extend yourself as those two factors make up such a large part of your credit score.

  • Finding your score. Finally, how do you find that credit score? Most credit card companies or banks will offer your credit score for free. If not, you can try sites like credit karma or credit sesame (not sponsored). They pull up your credit report and take a look at the different factors that are impacting your score.

That's it! I hope I've answered your questions about what a credit score is, what factors impact it, and how you can find your credit score.

Saving Money when Traveling as a Couple

I love traveling as a part of a couple and encourage all of my financial therapy clients to take trips together to create memories, build security, and deepen a couple’s connection. In this video, I’m going to walk you through the ways that you can save money when you travel with your partner.

  1. Lodging. No matter how you look at it, your dollar is going to go farther when you have two people. Let’s say you had a budget of $100 per night for a hotel, and once you add another person to that, it’s more like $50 per night. The other way to look at it if you want to bump up your travel experience is if you are still willing to pay $100 per night, your partner can throw in $100 and now you have doubled your hotel budget!

  2. Double those credit card rewards. The nice thing is when you travel with a partner is that you both get to earn credit card rewards. With most rewards cards, you can share miles with a spouse. Maybe you have 15k hotel points while your partner has 5k points and a free night costs 20k points. Rather than waiting to reach the 20k mark, you can combine those points to get to your free night quicker.

  3. Sharing meals. This is especially true if you are traveling in North America where meals tend to be larger. So when you head to dinner, just ask for a second plate and then you can share that meal . Then you also have room for dessert, which is always a bonus.

  4. Use cash-back sites like Ibotta or Ebates. Each of them are essentially online coupon sites but you don’t have to worry about keeping track of codes. You install the app or the add-on to your browser and you automatically get between 1 and 10% cash back. Ebates is a little better at online merchants and Ibotta is better at brick-and-mortar stores. If you are going to be buying things anyway for your trip, you might as well get some cash back.

  5. Travel in shoulder season. Shoulder season is a fancy way to say off-peak season travel. If you are traveling as a couple, it means you don’t have to contend with kids which means you can save money by traveling outside of the times that many people are taking their vacations. For example, instead of traveling around spring break, you can travel a little before or after that time period. Why? Because those airlines and hotels are still looking for customers. They tend to drop those prices to entice more people to travel at off-peak times. So if you are traveling as a couple, be sure to travel NOT around the holidays and you are likely to save money.

  6. Share a bag. If you are flying. Most airlines are going to charge you anywhere from $25-50 for a bag, so if you can cram it all into one suitcase you’re in good shape. I know that sounds a little bit crazy, but if you know me, you know I love my travel packing cubes. They are essentially like vacuum seal bags without dealing with the hassle of the vacuum. If you have travel cubes, you can stuff them full, zip them up, and throw them all in one person’s bag. The problem is that that bag will probably be heavier, but you still only have one bag.

  7. If you are traveling internationally do some shopping at duty-free before you come home. Duty-free is more than just booze; they often have perfume, makeup, clothes, different local food items, etc. So you can get your shopping done on the cheap. That doesn’t have a ton to do with couple travel, except that you can double the amount you can bring home.

Those are some of my best tips for saving money when traveling as a couple. What did I miss?

How to Get Started Travel Hacking

GET STARTED TRAVEL HACKING Interested in learning how to maximize your good credit score for free and discounted travel? In this video, I walk you through the art of travel hacking step-by-step. This travel hacking method leverages the lucrative sign-up bonuses from credit cards, earning you points and miles to be redeemed for free travel.

  1. Check, and know, your credit score You can check sites like creditkarma.com creditsesame.com to get your free three-digit score. The best offers are for those with great credit of 700+

  2. Know your monthly spending on things you’d already be spending your money on such as gas, groceries, and monthly bills.

  3. Find the right card that has a welcome bonus that is awarded once you can meet the minimum spend. Several options are listed below to help get you started

  4. Stay organized and make sure that you are meeting the minimum spend requirements within the timeframe required to earn bonus points

  5. Pay it off by paying the entire balance at the end of each billing cycle.

  6. Redeem! Use your points to offset the cost of travel.

If you are interested in getting started, here are some cards with low-to-no annual fees that you can check out. These may be affiliate links, meaning I may be paid or earn points at no additional cost to you if you click through and are approved.

Chase Freedom Unlimited Earn $150 bonus with Chase Freedom Unlimited if approved. https://www.referyourchasecard.com/18/CFUJQ7E6P3

Chase World of Hyatt Earn up to 50,000 bonus points with the World of Hyatt Credit Card if approved. https://www.referyourchasecard.com/205/2VVH79UI0Z

American Express Preferred Everyday Earn 20,000 Membership Rewards Points if approved and you meet the minimum spend requirement! http://refer.amex.us/RAYMOPJn6x?xl=cp01

American Express Blue Cash Everyday Earn a $200 statement credit if approved and you meet minimum spend requirement! http://refer.amex.us/LINDSBD9Nf?xl=cp01

American Express Platinum Delta Skymiles Earn 75,000 Delta Skymiles if you are approved with this link and you meet minimum spend requirements! http://refer.amex.us/RAYMOPMYm1?xl=cp01

American Express Simply Cash Business Apply for an American Express Card with this link. Earn a $250 statement credit if approved and you meet minimum spend requirements! http://refer.amex.us/LINDSBrHUA?xl=cp01

Raise Your Rates Worry Free ft. Dr. Marie Fang

As a financial therapist, I get asked often about how to go about raising ones rates, especially for those who are fee-for-service or hourly-based providers. In this video, a collaboration with psychologist Dr. Marie Fang of Private Practice Skills, I review some of the common emotional reasons you may be struggling to raise your rates.

Here is a summary of what I cover in the video above

1. Imposter syndrome. Feeling like you are a fraud or somehow got to where you are by mistake. Reframe these negative thoughts by reminding yourself of all you’ve accomplished and what you’ve had to learn or achieve to get where you are today.

2. Feeling like you are “selling” or “pushy.” Thinking of your ability to solve a problem as being "slimy" or "gross." Instead of feeling slimy, think of yourself as providing a service or solving a problem (which is probably what you are doing!). This helps your frame your thoughts in a positive way, allowing the marketing to feel more authentic than salesy.

3. Anxious about attaching a fee to doing something you enjoy. Worrying about charging for something that you enjoy doing. Remember that your zone of genius or think you like to do could very well be someone else’s nightmare. Embrace what you are good at and charge accordingly!

4. Fear of losing clients or not getting new ones. Worrying about turning away potential clients because of your rate increase. While there may be a smidge of truth in this, the reality is the clients who are bound to be a better fit for you are willing and able to pay the fee you are charging. There are plenty of cheap and free resources out there if someone feels they can’t afford your service.

I hope those tips help to get your mind and money in balance so you can stand confidently in your fees. After you’ve finished the video, be sure to check out her video below where she talks specifically about the things she sees therapists struggling with when it comes to raising their hourly rates.

Here's a summary of her top reasons therapists don't charge their worth:

1. Emotional reasons. Dr. Fang thinks this is hands-down the main barrier keeping therapists from charging what they’re worth.

2. Lack of Financial Education. Programs aren't teaching their students how to go about charging for their services, or the difference between a posted hourly rate and actual take-home pay.

3. Stigma. While in grad school, there was a HUGE stigma around therapists and others in the helping profession earning income higher than a basic living wage. Somehow in our culture, we’ve fostered a belief that if we truly desire to help people, we shouldn’t be earning more than a bare minimum for it to be genuine.

4. Gender Socialization. This message is for those who identify as ladies. She knows many of us are taught to believe that we shouldn’t be big earners. This messaging can run deep, whether we believe that we shouldn’t earn as much as the men in our lives, or if we believe that we’re genuinely less capable of being as skillful as men. She thinks we’re not taught to have a mindset that earning a higher income is something worth pursuing.

Money in your 30s, Asking for a Raise, and Trip Planning

Did you miss any of April’s videos? No worries, I’ve got you covered below!

I say this all the time, and it bears repeating: you can only save so much money; to truly become financially stable, you have to earn more money.

  1. How long have you been with the company? Loyalty is important to companies. It’s more expensive to hire and train someone new than to offer a raise to a consistent employee. Review your length of time with the company in addition to responsibilities you’ve taken on over the years as additional factors in your ask.

  2. What raises have you received in the past? If you’ve been getting the standard 2.5-3% raise to account for inflation for several years, it’s high time to get in and ask for a more substantial increase. What the employer is doing is essentially paying you the same amount year after year! Consider whether or not you would have stayed at your current job if you had your starting salary. If the answer is no, get yourself a raise.

  3. Do your homework. Ask colleagues about their pay (seriously, I’m pro-pay transparency) and look at sites like glassdoor.com or salary.com for average salaries for people in your field to help you gauge an appropriate pay raise for your job. The often-touted 76 cents-on-the-dollar statistic often comes from women leaving the workforce for a period of time and re-entering at their former salary.

  4. Demonstrate a willingness to learn. Certificates, training, make sure you tell the employer you are willing to do the work to get the money don't get discouraged.

  5. If you are told no, don’t get discouraged. See if there is a possibility for a raise over the course of several years; e.g., 5% a year for three years instead of a 15% raise outright. Ask for other fringe benefits the company may be more willing to give you, such as additional vacation days or the ability to work remotely. If neither is possible, start shopping for a new job. You are worth it.

If you are in your 30s there are six things you must know about money. By the time you’re in your 30s, you can no longer claim that you don’t care about it, that you’ll think about it later on or think that you think you have plenty of time. It’s time to wise up. I’ll walk you through.

  1. Smash those limiting beliefs. So much of the things that we do are tied to our negative beliefs or negative thoughts. So if you are thinking things like “I’ll never be able to get out of my student loan debt,” or “I’ll never be able to save money for a vacation.” Those types of things are harming your ability toward taking steps to achieve those goals. Good news, I have a freebie in the description box below on how to untangle your cognitive distortions, so be sure to click on that.

  2. You must know about credit. Not just your credit report, but also your credit score. It doesn't matter if you want to pay cash for everything and credit doesn't matter. The real reality is credit score is that you're going to be more desirable when it comes to things like getting a new apartment, purchasing a new car, or purchasing a house. If you have good credit, that is telling lenders you are worthy of getting a loan and getting it at a decent rate. The worse your credit it, the more likely it is that you’ll get denied for loan or credit cards, or get bad terms if you are approved. You can check it out at a bunch of different sites, credit karma, credit sesame, and annualcreditreport.com. Yes. Know your credit score, know your report.

  3. Life insurance. This is one of those things that people get freaked out about it think it's a scam they don't want to think about it because it means you have to think about death or dying but the reality is that having life insurance helps to protect you and your loved one is especially important if you have children or if you have a partner that you want to make sure that you're insured for enough so that if something were to happen to you your family your partner would be able to continue life as they already are able to live it now.

  4. Make sure you are investing in retirement. Erin Lowry has a new book out called Broke Millennial Takes on Investing where she talks about the importance of changing our language from saving to retirement to investing in retirement. The general rule of thumb is to have two times your annual salary invested in retirement by the time you are in your 30s. so make sure to look up things like your 401k 403b. If you are self-employed look into a SEP or a Solo 401k. Anyone can look up whether or not they meet criteria for a Roth IRA or traditional IRA, so make sure that you are investing in your retirement.

  5. Pay off all debt aside from your mortgage. I know this one is controversial and I know some people say that it's fine to keep your debt especially if you have a low interest rate you can probably earn more in the stock market so it's fine to keep your debt but I argue the opposite. For many of us, debt acts as a barrier and it pulls us down even if it's just emotionally or mentally so the more we can throw money at your debt the better off you're going to be.

  6. Have fun with your money! This should be intentional and feel really good for you to carve out a savings account that is just for things like travel or clothes or beauty or cars or whatever your hobby is. Make sure that you're still treating yourself and spending money on things that matter to you.

In your thirties, you want to make sure that you are spending money that is fun money on things that you want to spend it on. I want you to put some money towards your debt, I want you to be investing in your retirement accounts, AND to be enjoying your money. So those are the six things you need to know about money when you are in your 30s don't forget I have that freebie down below about untangling cognitive distortions especially when it comes to your money.

Untwisting Negative Thoughts--FREE Cognitive Distortions Worksheet


Lifestyle Creep and Travel Hacking

Two new videos up! Watch below and if you are in space where you can’t watch, the transcripts are available as well.

I’ve had countless financial therapy clients who are making BANK on paper, but are still living paycheck-to-paycheck. If you are technically making good money or you've been getting raises but you still feel like you're having a hard time figuring out where that money goes or feeling like you have a hard time making ends meet, you might be falling victim to something called lifestyle creep.

I shared a post on this topic on The Middle Edit, a site for women in their  30s and it got great feedback so I wanted to share it with you here. The link for that post is here.

Lifestyle creep is what happens when you start making more money and start subsequently spending more money. This happens gradually as we get raises or bonuses. Maybe you and your partner used to do date nights once a month at a nice restaurant and then once you got a raise, you found yourself on date nights weekly. Another example is going to purchase a new car (or new for you that is preowned) and looking in the next band of pricing instead of your current band of pricing.

You feel like you're saving and spending more money in a way that feels good to you easy I want you to First plan it out. Write down or put this on your phone. What would your dream be if you had a bit more money? Ask yourself, “What would I do if i had an extra 2 or 5 or 10 thousand dollars land in my lap?” Would you upgrade your house or take a vacation? So once you get that raise or bonus, go back to that dream and see if your raise can fund it. Even better if there is money leftover afterward! You can throw that towards saving or investing in your retirement. So this is how you mindfully, intentionally plan to save and spend your money so you don’t fall victim to lifestyle creep.

If you wanna travel but you feel like it is out of reach for you financially, I’m going to show you something called travel hacking so you can travel for pennies on the dollar. Today’s video is a little outside of the realm of the type of content I usually publish, but I put this on my Instagram stories and got a lot of comments, questions, and feedback so I want. I got asked for more information about how I travel hack. In this video, I’ll show you the exact breakdown of how I took my partner and I to Europe in 2016 for a 20,000 dollar vacation and paid under 800 dollars out of pocket for it.

First things first. Travel hacking relies on credit cards. It does not mean I want you to rack up debt or carry a credit card balance. This is ONLY for people who are organized financially, who are in good standing with their credit and have a good credit score, and know that opening up a credit card won’t tempt them to spend more than they can safely pay off. If that is not you, I want you to hit pause and bounce out of this video because this information is not for you.  

Now that we got that out of the way, let me show you exactly how that trip broke down. I’m going to hop over to my computer and show you the spreadsheet that tracked how I did everything.

This is the actual spreadsheet where I put everything. In this column what we were purchasing, the second column is what things cost in retail in 2016, this one is what we paid whether it was taxes or fees, and this one is what types of points we used or redeemed. So I’ll just go through a couple so you can see what I’m talking about. On this first line we flew from Detroit to London Heathrow on business class and it cost $8,100 dollars retail, we paid $11 in fees, and it cost us 100 thousand American Airlines miles to do that. We went to London for several nights and the Edwardian Vanderbilt Hotel and it cost $1,300 retail and we paid zero. And we used 150 thousand Club Carlson points. You can see how that broke down.

I really get excited when I total everything up and what it came down to is the total cost of the trip was almost twenty thousand dollars but we ended up paying about seven hundred sixty-four so when you break it up we paid 4% of the retail cost. So that is how we did it so now I’ll hop back over to how the heck you get all these points.

Almost every credit card issuer is going to offer a card that offers some sort of reward. Some of them are cash back, some of them are for things like frequent flier miles, and some of them are more general rewards points like Chase Ultimate Rewards or American Express Membership points. What you do is sign up for a credit card that has a sign-up bonus. Make sure to read the fine print. Usually, there is something called a minimum spend. That is the amount of money you have to spend in a certain amount of time on that credit card in order to get that sign up bonus. For some of them, it's spending three thousand dollars, for some its one thousand dollars. To meet minimum spend, I like to put a charge on the card that is large and something I’d have to pay anyway. An example would be putting six months of car insurance on a card to meet the minimum spend, then pay it off right away. So that’s how I did it several times over. I’ve put some of my favorite cards below that you can check out.

The other thing is that I’m getting ready to take another Euro trip on points with my partner this summer. If you’re interested in learning more about that or seeing that points breakdown, be sure to hit the thumbs up on the video so I’ll know to make a video on this summer’s trip to Amsterdam and Berlin.

If you are interested in getting started, here are some cards with low-to-no annual fees that you can check out. These may be affiliate links, meaning I may be paid or earn points at no additional cost to you if you click through.

Chase Freedom Unlimited: Earn $150 bonus with Chase Freedom Unlimited if approved. https://www.referyourchasecard.com/18/CFUJQ7E6P3

Chase World of Hyatt: Earn up to 50,000 bonus points with the World of Hyatt Credit Card if approved. https://www.referyourchasecard.com/205/2VVH79UI0Z

American Express Preferred Everyday: Earn 20,000 Membership Rewards Points if approved and you meet the minimum spend requirement! http://refer.amex.us/RAYMOPJn6x?xl=cp01

American Express Blue Cash Everyday: Earn a $200 statement credit if approved and you meet minimum spend requirement! http://refer.amex.us/LINDSBD9Nf?xl=cp01

American Express Platinum Delta Skymiles: Earn 75,000 Delta Skymiles if you are approved with this link and you meet minimum spend requirements! http://refer.amex.us/RAYMOPMYm1?xl=cp01

American Express Simply Cash Business: Apply for an American Express Card with this link. Earn a $250 statement credit if approved and you meet minimum spend requirements! http://refer.amex.us/LINDSBrHUA?xl=cp01

The information and content provided by Lindsay Bryan-Podvin LMSW, LLC/Mind Money Balance is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. No one should make any investment changes without first consulting his or her financial advisor and conducting his or her research and due diligence. To the maximum extent permitted by law, Lindsay Bryan-Podvin LMSW, LLC/Mind Money Balance disclaims any and all liability in the event any information, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

My Pay Transparency Mistake

In this video, I talk about a time where I wish I would have been a better advocate for myself financially. As a social worker and financial therapist, I’m a huge advocate of talking about salary as it helps everyone de-stigmatize money and invites a conversation about the importance of earning a comfortable living. Click above to watch the video. Have you ever dealt with a pay transparency issue?

5 Steps to Spend in Line with Your Values: Using ACT for your money

Check out my latest financial therapy video on how to apply acceptance and commitment therapy to your money. Transcript below:

Are you feeling like you are spending money on shit you don’t care about? Watch the video above, or check out the steps below, and I’ll give you the exact exercise you can do to spend in a way that feels right for you.

If you look at your spending at the end of the month and feel like you are flushing money on stuff you don’t need, I’m here to tell you how you can shift that so you can spend on the things that matter. I guarantee that practicing this will help you feel good about your spending habits. 

First, let me break down what ACT it. ACT stands for acceptance and commitment therapy. The idea is that when we live our lives aligned with our values, we feel better about ourselves.

5 Easy Steps to Spend Money in line with your Values

  1. Write down the five most important values in your life (example: empathy, freedom, love, health, and sustainability).

  2. Look at last month’s spending.

  3.  Highlight or write down the 2-3 areas where you spent in a way you aren’t proud of (fast food, parking, clothes).

  4. Reference your values and see if they match up. If they don’t, there is a good chance you feel conflicted or guilty when you spend For example, if you value health and love, your money would probably be better spent taking your partner rock climbing instead of buying another drive-through meal. Or if you value sustainability, maybe you could shift your spending from a parking pass to a bus pass.

  5. Shift your spending toward the things you value. The goal isn’t to spend less, though you might, but to spend in a way that feels more like YOU.

What areas are you going to shift your spending towards to align with your values? Or are you going to shift some spending away from a certain category that doesn’t match up with your values? Let me know in the comments!

If you are getting stumped on values, I have a free download full of values you can reference to practice the exercise I reviewed in the video. Here’s a free worksheet to help you find ways to line up your spending with your values.