The information presented on this page is intended for educational purposes only. BW, Inc. does not provide advisory or brokerage services, nor does it offer recommendations to buy or sell specific stocks, securities, or other investments.
Every week, we address financial inquiries from various sources on the BW app. Here are three of the top questions from October:
Is there a fast way to improve my credit score?
While rebuilding your credit takes time, there are strategies to expedite the process.
Firstly, review your credit report for any inaccuracies that may be impacting your score negatively. Rectify any errors promptly.
Ensure timely payment of your bills each month. Late or missed payments can affect your score for up to seven years. If you miss a payment, settle it immediately and request your creditor to remove it from your credit report.
Monitor your credit utilization ratio. Avoid maintaining a high balance on your credit cards that exceeds 30% of your total credit limit. Pay down the balance to improve your score.
Another strategy is to request a credit limit increase from your credit card issuer. A higher limit can lower your credit utilization rate.
You could also ask a family member with good credit to add you as an authorized user on one of their high-limit credit cards. Alternatively, consider using a secured card by providing an upfront deposit. These options are beneficial for individuals with limited accounts on their credit report, such as those starting out.
While credit rebuilding is a gradual process, following these steps can enhance your score in the months and years ahead.
Is it wiser to save or repay loans?
Balancing conflicting objectives, such as debt repayment and saving, is a challenging aspect of financial management. The decision depends on your individual circumstances.
Building an emergency fund is a top priority to cover expenses in case of unforeseen financial emergencies. Starting with $500 is a good initial step towards financial stability.
After establishing the emergency fund, assess your debt situation. Do you have high-interest credit card debt, low-interest student loans, or a mortgage?
If you have high-interest debt, prioritize paying it off as the interest could strain your budget. Utilize an online debt calculator to determine the impact of the debt on your finances.
Once you’ve evaluated your debt, choose a repayment method such as the snowball or avalanche method to make progress over time.
After addressing the emergency fund and high-interest debt, consider the advantages and disadvantages of saving and debt repayment. Do you wish to allocate extra funds to a high-yield savings account or long-term investments? Would you like to make additional mortgage payments?
These questions are crucial as they indicate that you’ve taken care of essential tasks and are ready to progress towards financial security. There’s no right or wrong answer, just a decision based on your personal preferences and goals.
What financial steps should I take before the year ends?
The conclusion of the year brings various deadlines, but there’s still time to meet them. Here are some key dates to mark in your calendar.
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Consider making last-minute contributions to employer-sponsored retirement accounts. The deadline to contribute to a 401(k) for the year is Dec. 31. In 2025, the contribution limit is $23,500 (or $31,000 if you’re over 50).
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Make any desired charitable contributions before the year ends. You have until Dec. 31 to have your donation count towards your itemized deduction for the year.
Lastly, use the remaining months of the year as a self-imposed deadline to complete financial tasks. Consider the following actions:
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Designate beneficiaries for all your financial accounts, including retirement accounts.
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Review your insurance needs, including life insurance, to determine if additional coverage is necessary.
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Ensure you have an emergency fund in place and that it’s growing in a high-yield savings account. If not, start saving, even with a small amount.
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Give your budget a quick review to see if any adjustments are needed. Consider the 50/30/20 budget, allocating 50% to needs, 30% to wants, and 20% to savings and debt payments beyond the minimum.
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Brainstorm financial goals for 2026 to kickstart the new year on the right foot.