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With tax-filing season in full swing, if you're expecting a refund and plan to submit your taxes electronically, without errors, and using direct deposit, the IRS says your refund could arrive within three weeks. Here are some smart money moves.

With tax-filing season in full swing, if you&#39;re expecting a refund and plan to submit your taxes electronically, without errors, and using direct deposit, the IRS says your refund could arrive within three weeks. With last year&#39;s average federal tax refund topping $3,004, you may already be thinking about how you can make the most of money coming back to you this year.[1]<h2>5 smart ways to use your tax refund</h2>Here are five of our favorite strategies for how to use your tax refund in 2025.<h3>1. Add to your emergency fund.</h3>Given that unexpected financial setbacks will occur—a blown water heater, a major medical bill, an expensive car repair—having a well-stocked emergency cash reserve can help keep you afloat or out of unnecessary debt.One of the tried and true ways to <a href="/personal-savings">build your emergency savings</a> is to fund it slowly over time with monthly automatic contributions. By using your tax refund to make a large lump sum deposit, you’ll reach your goal much faster.How to save it: Assuming you regularly contribute $100 a month and your target balance is $5,000, it will take you four years to get there. Next, let’s assume you receive last year’s average federal tax refund. If you continue making regular contributions and deposited your entire tax refund directly into your emergency savings fund account, you’d reach your target savings goal in just under 2 years.&gt; ProTip: How big should your emergency fund be? Find out using this <a href="https://www.moneyunder30.com/emergency-fund-calculator">easy calculator from Money Under 30</a>.<h3>2. Pay down debt.</h3>How would it feel if you could knock out a debt that’s been hanging over your head for far too long? Or what if you could take a bite out of an overwhelming credit card balance? When you use your tax return to pay off debt faster, you can save yourself years of worry and potentially thousands of dollars in accumulated compound interest with this creative way to pay off debt.How to spend it: Suppose you typically pay the minimum owed ($200 for example) toward an outstanding $5,000 credit card balance. Assuming a 15% interest rate on that card, and that you don’t add any more to it, you’ll be paying off that card for six and a half years, and shelling out $2,900 in interest before you’re done.Instead, what if you applied your $3,000 tax refund to that debt while continuing to pay the monthly minimums? You could be debt-free in about 2 years and save yourself more than $2,500 in interest payments. Now that’s progress.&gt; ProTip: If you want to see how much time and money you can save by making a lump-sum payment toward your debt, punch your numbers into Student Loan Hero’s <a href="https://www.lendingtree.com/student/prepayment-calculator/">Extra Payment Calculator</a>.&gt; ProTip: Need to tackle even more of your debt than your tax refund can handle? Try <a href="/personal-loan">bridging the gap with a personal loan that can transfer balances for you.</a><h3>3. Upskill your income.</h3>Fine-tuning your skills and taking a look around for better opportunities can mean more money in your pocket. The rewards of being more effective in your current line of work, more confident when you ask for that raise, or positioning yourself for a better, higher-paying role, is an investment that can pay you back many times over.How to spend it: Whether you field customer service calls, write code, or clean homes for a living, consider spending part of your tax refund improving core job skills. Or, try learning something new altogether. This could mean paying someone to rewrite your resume, going back to school to obtain a special certification, or buying the tools you need to improve your work productivity. No matter what, investing in yourself and improving your skills can help you increase in your future earning potential.<h3>4. Reach a big goal faster.</h3>You probably have several medium-to-long-term goals for your cash, such as:<ul><li>Covering the cost of your kids’ continuing education</li><li>Paying up front for the wedding of your dreams</li><li>Putting a down payment on a home, or investing in the best home improvements</li><li>Starting a small business</li><li>Leasing or buying a car</li><li>Retiring by the time you’re 70</li><li>Budgeting your money for a dream vacation</li></ul>If you’ve prioritized building a strong financial foundation, most likely you already have a plan in place to reach one or more of your dreams. When you pour any tax refund dollars directly into your savings goal, you’ll get there much faster.How to make it happen: If your goal is savings, opening a dedicated, <a href="/personal-savings/high-yield-savings">high-yield savings account</a>, certificate of deposit, or money market account is a good way to safely grow your dollars while keeping them within easy reach. If your goals include planning for retirement or putting money away for future use, look into specialized accounts that offer tax benefits such as an IRA or a custodial account to grow your cash for your children’s future expenses.<h3>5. Invest, and fight inflation.</h3>If you’ve got a good handle on your emergency savings, credit situation, and other near-term financial needs, consider maximizing the impact of your tax refund over the long haul by investing it. With prices rising for many consumer goods, experts say careful investing can be a good way to <a href="https://www.cnbc.com/select/where-to-put-your-money-during-inflation-surge/">hedge against inflation</a>.How to invest it: Consider this: by investing the average 2024 Federal tax refund amount of $3,004 and any dividends, and assuming an annual return of 7%, after 10 years you’d nearly double your money. The longer your time horizon, the more you could see your money grow. Of course, investing comes with a measure of risk, and the market is constantly moving so it’s important you research the track record of the securities or other investment instruments you put your money into.How will you spend, save or invest this year&#39;s tax refund? Choose one of these smart money moves and make a big impact on your financial future.<hr/>1. <a href="https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-oct-18-2024">IRS.</a> &quot;Filing season statistics for week ending Oct. 18, 2024&quot;

We’ve rounded up some of the most essential personal finance to-do’s.   

Your goals and money habits can change over time, but no matter what stage of life you find yourself in, everyone can benefit from regular financial housekeeping.  <h2>LendingClub&#39;s essential financial checklist </h2>We&#39;ve rounded up some to-do&#39;s to help get you started with your financial checklist.  <h3>1. Conduct a quick financial inventory </h3>Set aside about an hour to look back at the past 12 months through a personal finance lens. Jot down your findings in a notebook or on the computer, and be as honest as you can. Reflect on what you achieved versus your goals and where you may have come up short. Did you stay on <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions">budget</a> or spend more than you planned? Did you save more or less than you hoped to? Were you able to pay down debt, or did unexpected expenses set you back?  Did you actually set goals or just wing it? Celebrate your financial achievements from the past year and think through what else you still need to work on. Understanding your successes and determining areas for improvement helps set the foundation for goal-setting for the year ahead, and you may identify new strategies to stay on track and better <a href="https://www.lendingclub.com/resource-center/personal-finance/how-little-can-you-live-on-tips-for-frugal-living">live within your means</a>.[1 ]    <h3>2. Review insurance policies </h3>Review any existing insurance policies you and your family have. This may include health insurance, homeowners insurance, auto insurance, or pet insurance—and don&#39;t forget life insurance. Consider if the plans still meet your coverage needs and budget. Do you need to adjust your deductibles? Do you need a different type of coverage in the coming year?   It never hurts to compare rates. For example, you may be happy with your current auto insurer, but shopping around could result in better rates or more coverage for the same price.  <h3>3. Check your employer benefits </h3>For people who get benefits, like health insurance or a 401(k), through an employer, the end of the year is a great time to check in. Did you use all of your health benefits? Did you maximize contributions to your health savings account (HSA), flexible spending account (FSA), or 401(k)? Do you need to make any adjustments to your plans or amounts deducted from your paycheck?  In some cases, your employer may prompt you to make changes at the end of the year, like during health insurance open enrollment period. However, other tasks, like adding life insurance or updating your 401(k) portfolio mix, may be something you need to do on your own. Look into any new benefits your employer may be offering, like discounted gym memberships, charitable contribution matching, and more.  <h3>4. Plan for major life changes </h3>Are you expecting any major life events within the next year, like a <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-create-the-ideal-wedding-budget">wedding</a>, divorce, birth, or a <a href="https://www.lendingclub.com/resource-center/business-loan/how-to-get-a-small-business-loan">new business</a>? Is your child going off to college, or do you have dental work or a big medical procedure on the horizon? Maybe your home needs repairs, you need a more reliable car, or you&#39;re planning to adopt a new puppy.  Whatever your financial situation is, when it comes to paying for large expenses, you may want to consider adjusting your budget to cover the cost. Decide if you&#39;ll save up, use your existing savings, pay with a credit card, or take out a <a href="https://www.lendingclub.com/personal-loan">personal loan</a>.  <h3>5. Access your emergency savings  </h3>Any unexpected expense, such as medical bills and uncovered auto or home repairs, can set you back financially. A good rule of thumb is to have three to six months&#39; worth of basic living expenses stashed away in an emergency savings account. Check in on your <a href="https://www.lendingclub.com/resource-center/personal-finance/your-emergency-fund-the-essential-guide">emergency fund</a>. Did you meet your savings goal? Are you able to save more? Did you dip into the account and need to replenish funds?  Whether you have $500 in your emergency fund or a year&#39;s worth of expenses tucked away, reviewing your emergency savings at the end of the year is an important step to feeling financially protected in the new year.[2] <h3>6. Review your debt and credit  </h3><a href="/resource-center/personal-finance/best-creative-ways-to-pay-off-debt">Managing your debt</a> and credit responsibly is an important part of your overall financial well-being. Take a look at your debt. Did you rack up more than you wanted to this year? Do you have a lot of high-interest debt, like credit cards? Are you on track to pay it off quickly? Or could you benefit from using a debt management strategy, like the <a href="https://www.lendingclub.com/resource-center/personal-finance/steps-to-decimate-debt-the-debt-snowball-method">debt avalanche or snowball methods</a>? Does it make sense to consider a <a href="https://www.lendingclub.com/personal-loan/debt-consolidation">debt consolidation </a><a href="https://www.lendingclub.com/personal-loan/debt-consolidation">loan</a> instead?  Check your latest credit scores. Are they where you thought they would be, or do you need to take steps to <a href="https://www.lendingclub.com/resource-center/personal-loan/how-to-improve-credit-score">improve your credit</a> in the new year? This is also a good time to pull your credit reports and look for anything that&#39;s incorrect. You can get a free copy of your credit reports from all three major consumer credit bureaus through <a href="http://annualcreditreport.com/">Annual</a><a href="http://annualcreditreport.com/">C</a><a href="http://annualcreditreport.com/">redit</a><a href="http://annualcreditreport.com/">R</a><a href="http://annualcreditreport.com/">eport.com</a>.[3]  <h3>7. Maximize retirement savings </h3>Retirement plans, like 401(k)s and IRAs, all have annual contribution limits. For example, the Internal Revenue Service (IRS) limits individual 401(k) contributions to $23,000 per year in 2024. Annual IRA contribution limits are set at $7,000 in 2024. If you&#39;re over age 50, you may be eligible for catch-up contributions that let you save a bit more. Limits are even higher for self-employed individuals in some cases.[4]   The end of the year is a good time to review how much you contributed in 2024. If you haven&#39;t maxed out your contributions yet, you still have time to add more to your retirement account and take advantage of potential tax breaks.  <h3>8. Conduct a year-end tax review </h3>Changes in dependents, income, and marital status can all affect your tax bill. Use the <a href="https://www.irs.gov/individuals/tax-withholding-estimator">IRS&#39;s tax withholding calculator</a> to decide if you need to make adjustments with your employer or how much you pay in estimated taxes if you&#39;re self-employed.  If you&#39;re expecting a tax refund, the end of the year is also a good time to consider how you may want to use the extra cash. Do you want to stash it away for a rainy day in an emergency fund? Or does it make more sense to use the funds to pay down some debt? Planning how you&#39;ll spend your refund can help prevent spontaneous purchases when you get the check.  <h2>The bottom line </h2>Taking time to evaluate your finances and money goals can help you see how far you&#39;ve come—and what steps are still needed to build a healthy financial future and create a budget. When you get in the habit of conducting annual financial reviews, you&#39;ll start to gain more insight into what <a href="https://www.lendingclub.com/resource-center/personal-finance/tips-for-financial-success-in-budgeting-your-money">financial strategies</a> work best for you and set the foundation to feel more in control of your finances in the year ahead and beyond.     <hr/><ol><li><a href="https://files.consumerfinance.gov/f/201501_cfpb_digest_financial-well-being.pdf">Consumer Financial Protection Bureau</a>. “Financial well-being: What it means and how to help.” </li><li><a href="https://www.consumerfinance.gov/an-essential-guide-to-building-an-emergency-fund/">Consumer Financial Protection Bureau</a>. “An essential guide to building an emergency fund.” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/how-do-i-get-a-free-copy-of-my-credit-reports-en-5/">Consumer Financial Protection Bureau</a>. “How do I get a free copy of my credit reports?” </li><li><a href="https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000#:~:text=Highlights%20of%20changes%20for%202024,to%20%247%2C000%2C%20up%20from%20%246%2C500.">Internal Revenue Services</a>. “401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000.” </li></ol>

Consolidating debt often helps your credit—at least over the long term. A lower interest rate and a single fixed monthly payment make it easier to pay down debt, and lower credit card balances and on-time loan payments often help raise your score. 

Consolidating debt often helps your credit—at least over the long term. A lower interest rate and a single fixed monthly payment make it easier to pay down debt, and lower credit card balances and on-time loan payments often help raise your score. Debt consolidation isn’t foolproof, however, and could potentially hurt your score. Your credit might dip temporarily after debt consolidation, and you’ll have to avoid running up new credit card balances. Before deciding to consolidate debt, it’s important to consider how it affects your credit scores.[1] <h2>What is debt consolidation and how does it work? </h2><a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-debt-consolidation">Debt consolidation</a> is a debt management strategy used to refinance multiple debts into an easy-to-manage single monthly payment—ideally with a lower interest rate. Many people consider debt management when they’re financially overwhelmed or their credit situation has improved, making them eligible for lower interest rates. Common ways to consolidate debt include a debt consolidation loan or a 0% APR balance transfer credit card.[1]  Consolidating debt works a bit differently, depending on which method you choose. For instance, by using a personal loan to pay down your higher-interest loans and credit card balances, you replace several monthly bills with one. While the loan may take a few years to pay off, you’ll often save over time thanks to a lower monthly payment and interest rate.[1]  <h2>How does consolidating debt affect your credit score? </h2>Debt consolidation is generally helpful for your credit score, but it does have the potential to affect your score negatively. Let’s take a closer look at how debt consolidation can help or hurt your credit.  Ways debt consolidation can help your credit score  Debt consolidation primarily helps your credit by making your debt easier to pay down. It’s often easier to make a single loan or credit card payment. Your new monthly payment may also be reduced, thanks to a lower, fixed interest rate.[1]  Here’s how debt consolidation can help your credit score in the long run.  <ul><li>May help your payment history: Your payment history accounts for 35% of your credit score, making it the most important factor. Consolidating debt doesn’t guarantee you’ll make your debt consolidation loan or balance transfer credit card payment on time. However, it may decrease your chances of overlooking a payment or forgetting to set aside enough money to pay it.[2] </li><li>Improves credit utilization: Credit utilization is the percentage of credit you’re using out of your available revolving credit, and it’s the second biggest factor in credit scoring. A credit utilization ratio of more than 30% can hurt your credit scores, while a ratio below 10% is ideal for score improvement. When you use a debt consolidation loan to pay off high-interest credit cards, the credit utilization on your credit cards drops to zero.[2]  </li><li>Diversifies your credit mix: Having a mix of credit accounts—such as credit cards, home loans and auto loans—tends to benefit your credit score. That’s because having a range of credit products shows you know how to manage different types of accounts. Adding an installment loan could help diversify your credit mix and give your credit score a small lift.[2]  </li></ul><h2>Ways debt consolidation can hurt your credit score </h2>For all its potential positives, debt consolidation can also hurt your credit score, especially when you first get a loan or new 0% APR balance transfer credit card. However, these effects are typically minor and are often offset over time by a positive payment history, improved credit utilization, and diversified credit mix.   Here’s how debt consolidation can negatively affect your credit.   <ul><li>Adds a hard credit inquiry: During the loan (or credit card) application process, the lender typically checks your credit report, a process known as a “hard pull” or “hard inquiry.” <a href="https://www.lendingclub.com/resource-center/personal-finance/key-differences-of-a-soft-credit-check-vs-hard-credit-check">Hard inquiries</a> appear on your credit reports and can cause a minor drop in credit score.[3] </li><li>Decreases average age of accounts: The average age of your credit and loan accounts is a measure of how long you’ve been managing debt. Long-standing accounts have a positive effect on your credit score. When you get a new loan or credit card, the average age of your accounts goes down, which can cause a dip in your credit score.[2] </li><li>Doesn’t address money management issues: If you have a history of paying your bills late, you might continue to miss payments after debt consolidation. It can also be tempting to rack up purchases on your newly freed-up credit cards, which could add to your total debt and hurt your credit score.[1] </li></ul><h2>Different ways to consolidate your debt </h2>You have multiple options for consolidation, depending on the types of debt you have and which assets you can access. Here are some of the most common ways to consolidate debt. <h3>1. Use a debt consolidation personal loan </h3>Unsecured personal loans are fixed-rate <a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-an-installment-loan">installment loans</a> and one of the most popular options for consolidating debt. Because a <a href="https://www.lendingclub.com/personal-loan/debt-consolidation">debt consolidation loan</a> is unsecured, you won’t risk losing property when taking out the loan. Additionally, you may be able to qualify for a low interest rate based on your credit and financial situation.[1]   <a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-a-personal-loan-how-to-apply-in-3-simple-steps">Personal loans</a> are also flexible in that you can use the money for almost anything. If you have several types of debt, such as medical bills and credit cards, you can consolidate them all into your new personal loan. However, there are some debts, such as student loans, that cannot be consolidated with a personal loan.[5] <h3>2. Look into credit card balance transfer offers </h3><a href="https://www.lendingclub.com/resource-center/personal-finance/balance-transfer-loan-or-balance-transfer-credit-card-how-to-choose">Credit card balance transfers</a> let you transfer debt from one credit card to another. Finding a low introductory rate or 0% APR balance transfer credit card offer may save you money on interest during the promotional period. Keep in mind, you may have to pay balance transfer fees, and the high card balance could impact your credit scores. If you don’t pay off the balance before the promotional period ends, you may wind up paying more interest in the long run.[4]  <h2>How to consolidate debt without hurting your credit score  </h2>Consolidating your debt can impact your credit score, but as long you manage your debt responsibly, any negative effects will be temporary. You can minimize negative effects on your score by following these tips.   <ul><li>Check your credit before you shop. Better loan rates and terms are generally available to individuals with higher credit scores. <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-read-your-credit-report-identify-red-flags">Knowing your credit score</a> and what’s in your credit reports can help you compare rates on loans (or 0% APR balance transfer cards) that fit your credit profile.[1] </li><li>Limit hard credit inquiries by using pre-qualifications. Many lenders, like LendingClub Bank, can pre-qualify you for a loan without doing a “hard” credit pull that affects your credit score. Pre-qualifications give lenders a quick read on your credit and financials so they can quote loan rates and terms more accurately. Once you decide on a loan option, your lender will do a hard credit pull to approve your loan.[3] </li><li>Think carefully about payment amount and terms. Consider your monthly payments and loan term. Will you be able to meet your monthly payments on time every month? Will you be able to pay off a 0% APR balance transfer card before the introductory period ends? Before you sign on to a new loan or transfer your balances, make sure you can swing payments and terms.[1] </li><li>Avoid running up new debt. Once you’re paying down your debt using a debt consolidation loan or other method, try to avoid building up new balances on your credit cards. You may find yourself with multiple monthly bills and high credit utilization again.[1]  </li></ul><h2>The bottom line </h2>Debt consolidation can help you simplify multiple debts, save you money on interest, and even help keep your credit on track—especially if you’re overwhelmed with high-interest credit card balances, multiple loans, medical bills, or other debt. Having fewer bills and a solid plan for paying down debt won’t affect your credit directly. However, using debt consolidation often improves your credit as long as you avoid pitfalls that can lead to credit problems like missed payments.[1] <hr/><ol><li><a href="https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-if-im-thinking-about-consolidating-my-credit-card-debt-en-1861/">Consumer Financial Protection Bureau</a>. “What do I need to know about consolidating my credit card debt?” </li><li><a href="https://www.myfico.com/credit-education/whats-in-your-credit-score">myFICO</a>. “What&#39;s in my FICO Scores?”</li><li><a href="https://www.experian.com/blogs/ask-experian/hard-inquiry-vs-soft-inquiry/#:~:text=Hard%20inquiries%20can%20impact%20your,for%20less%20than%20a%20year.">Experian</a>. “What’s the Difference Between a Hard and Soft Inquiry?”  </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/how-long-can-i-keep-a-low-rate-on-a-balance-transfer-or-other-introductory-rate-en-15">Consumer Financial Protection Bureau</a>. “How long can I keep a low rate on a balance transfer or other introductory rate?”   </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-personal-installment-loan-en-2114/">Consumer Financial Protection Bureau</a>. “What is a personal installment loan?”  </li></ol>

From obtaining a loan or credit card to landing a new apartment or job, having a strong credit score helps open certain doors in life. Yet many of us cling to incorrect assumptions about, or simply don't understand, what factors are used to determine our scores. 

From obtaining a loan or credit card to landing a new apartment or job, having a strong credit score helps open certain doors in life. Yet many of us cling to incorrect assumptions about, or simply don&#39;t understand, what factors are used to determine our scores. Here we separate credit score fact from credit score myth to help you better understand the impact a good credit score has on your financial life.<h2>Myth #1: Checking your credit report will hurt your credit score</h2>Contrary to popular belief, checking your own credit report won’t hurt your credit scores. Requesting your credit report or checking your scores registers as a soft inquiry, which does not influence your credit. It’s smart to monitor your credit history, especially if you’re considering applying for a new loan soon. You’re even entitled to free credit reports from each of the major credit bureaus (Equifax, Experian, and Transunion). Typically you can access your reports at <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a> once every 12 months.On the other hand, if you apply for a new loan, your scores may take a slight hit. That’s because loan applications (known as hard inquiries) can appear on your credit reports and are a credit scoring factor. Keep in mind—if you’re <a href="https://www.equifax.com/personal/education/credit/score/will-checking-your-credit-hurt-credit-scores/">rate shopping</a> and make multiple hard inquiries within a set timeframe, your applications should register as only one hard inquiry. <h2>Myth #2: You only have one credit score</h2>You’ll often see commercials, advertisements, and other forms of media refer to your credit score as though there is only one magical number. In reality, borrowers have multiple credit scores—that’s right: scores, plural. Credit scores are based on information within credit reports. Since there are many different credit scoring models and given that each credit bureau produces its own unique credit report, you will have multiple credit scores. On top of that, some account activity may not be reported to each bureau, so it’s possible for reports to differ slightly as well. Those ever-fluctuating three-digit numbers are calculated based on complex algorithms, known as credit scoring models. Two popular models are FICO Score and VantageScore, both of which have <a href="https://www.myfico.com/credit-education/credit-scores/fico-score-versions">multiple model versions</a> for various lending situations. For instance, a personal loan lender might see a different score than an auto or mortgage lender. <h2>Myth #3: Closing a credit card increases your score</h2>Ridding yourself of a credit card can seem like a wise decision. After all, what good does a piece of plastic do if it’s just collecting dust in your wallet? Actually, more than you might think. Although canceling credit card accounts may help you cut down on the temptation to spend, may not improve your credit score right away. In fact, canceling a card could hurt your scores because it may raise your total <a href="/resource-center/personal-finance/what-is-credit-utilization-and-how-to-improve-it">credit utilization rate</a>, which is a major component of scoring models. Your utilization rate measures your total outstanding credit balance against your total available credit. Typically, from a score perspective, the lower the utilization rate, the better. For example, let’s say you have two credit cards—one has a $3,000 credit limit and the other has a $2,000 credit limit. Now let’s also assume that the former has a $1,000 outstanding balance while the latter has no balance at all. In this case, your aggregate credit utilization ratio would be 20% ($1,000 balance divided by $5,000 of total credit). If you canceled the $2,000 card, your credit utilization would increase from 20% to 33% ($1,000 balance divided by $3,000 of total credit) and your score would likely take a hit. In other words, just having that available credit helped cushion your utilization rate. Unless your credit card carries an unwanted annual fee or encourages poor spending habits, it may be best to leave a credit account open—even if you don’t use it very often. <h2>Myth #4: Getting a better job will improve your scores</h2>If you got a raise or moved up the career ladder recently, congratulations are in order. Unfortunately—and we hate to be the bearer of bad news—increasing your income doesn’t increase your credit scores. At least, not on its own. That said, you could apply that extra cash to your outstanding loan balances and pay down your debt. In that case, you would likely experience a score bump. If you’re applying for a loan or line of credit, a raise can still help your chances of qualifying. Increasing your income can lower your debt-to-income ratio, which measures your monthly debt payments against your monthly income. By lowering your ratio, you can enhance your appeal as a loan applicant in the eyes of lenders and improve your chances of qualifying for a lower interest rate and better terms.<h2>Myth #5: Paid-off accounts don’t affect your credit</h2>Congratulations—you’ve paid off your debt. Though it feels good to say “sayonara” to payments, that loan isn’t going anywhere for a while—at least in terms of your credit report. If you close an account in good standing, meaning you made timely payments and no longer carry a balance, your account activity will remain on your reports for 10 years. In this case, you actually want your debt to remain in your credit reports. A lengthy history of on-time payments can help your scores. On the other side, if you closed a credit account with missed payments or an outstanding balance, it could stay on your report for up to seven years—and potentially weigh down your score. That’s why it’s so important to make your loan repayments on time and pay off balances in full before you close your accounts. <h2>Myth #6: You need a credit card to build credit</h2>You don’t technically need a credit card to build credit, at least not your own. One way to build your credit score is to become an authorized user on someone else’s credit account—particularly someone with strong credit habits. The primary cardholder would still be responsible for making payments, but you’ll be linked to the account. Your scores could benefit because the card issuer may share the account’s activity with the credit bureaus for both the primary cardholder and the authorized user. In that case, you don’t even need to use the card to build credit. Keep in mind, this benefit can easily backfire. If the primary cardholder starts missing payments or carrying a higher card balance, this could have a negative impact on your credit report as well. <h2>Myth #7: Your credit doesn’t matter if you don’t need a loan</h2>It’s important to manage your debt responsibly, such as making on-time payments and maintaining low balances. However, if you prefer a plastic-free lifestyle and choose to instead pay with cash (or a debit card), you might wonder if a credit score is important to your life. In most cases, the answer is yes, especially if you plan on renting a home. Many landlords will pull your credit report to determine if you’re a good candidate for home rentals. If they see a history of on-time payments and a low debt-to-income ratio, they might consider you a more qualified renter, especially when compared to someone with no credit. Potential employers may also check your credit history. While they can’t access your actual scores, they can evaluate your general activity to see if you’re financially distressed. <h2>Next steps</h2>Now that you’re aware of common credit myths, you may want to focus on what you can do to improve your scores. For starters, you can <a href="/resource-center/personal-finance/getting-a-copy-of-your-credit-report">check your credit report</a> and check for any discrepancies. You can access your report for free from each of the three credit bureaus once every 12 months. If you come across any errors, report them immediately.If you have less-than-ideal credit or no credit whatsoever, don’t worry. There are several types of credit accounts that help you build your scores. Consider looking for a secured credit card or a credit-builder loan. These accounts can help you build responsible personal credit habits. Compare several credit card companies to find the most accommodating terms and best rates. If you have debt, work to pay it off. While that’s easier said than done, you can prioritize your loans with the highest interest rates, such as credit card debt. By doing so, you can minimize your interest payments and apply savings to other loans. You may even lower your credit utilization rate and improve your scores in the process.Last, but certainly not least, pay your bills on time, every time. Whether it’s debt, utility bills, or some other line of credit, your payment history significantly factors into your credit scores, and timely payments are crucial for good credit scores. If a past-due debt becomes a collection account, that can be bad news for your scores.<h2>The bottom line</h2>Your credit scores play a crucial role in your personal finances, particularly when you have to borrow money. Though most aspects of your life—like your age and income—don’t influence your score. However, there are a few factors that all three credit bureaus take into account. Your ability to pay bills on time, how much debt you take on, and how often you apply for a new line of credit are all components you can control to impact your score.

Rising prices are making the necessities of life—food, housing, healthcare, transportation costs—and just about everything else, more expensive. What’s behind inflation? And how can you manage your money as your buying power shrinks?

Rising prices are making the necessities of life—food, housing, healthcare, transportation costs—and just about everything else, more expensive. What’s behind inflation and how can you <a href="https://www.lendingclub.com/personal-loan">manage your money</a> as your buying power shrinks?<h2>What is inflation?</h2>Inflation happens when prices rise across a broad range of goods and services as demand outpaces supply. It’s not an entirely bad thing, as some degree of inflation may help drive economic growth. The Federal Reserve aims for inflation of about 2% to maximize employment while keeping prices relatively stable.Economists use broad economic indicators to describe inflation. While most of us don’t need complicated metrics: we measure it by our buying power. If you’ve been putting fewer groceries into your cart—or paying more for them—you know the effects of inflation first-hand.<h2>What’s causing inflation?</h2>There are a number of factors that cause inflation.<ul><li>Demand-pull inflation. Demand-pull inflation occurs when demand for goods and services exceeds supply. This often happens when consumer spending rises, interest rates are reduced, or demand for exports from other countries grows, all of which can push prices higher.</li><li>Cost-push inflation. Cost-push inflation happens when the costs of production rise, such as raw materials. Businesses pass these costs onto consumers by raising the prices of goods and services. </li><li>Built-in inflation. There is a built-in inflation assumption that is caused by the expectation that workers will demand higher wages to keep up with the rising prices, and businesses will in turn raise prices to cover the higher labor costs. It&#39;s a cycle.</li></ul><h2>How does the government combat inflation?</h2>Adjusting interest rates is a well-known measure the Fed takes to fight inflation. By increasing the cost of borrowing money, rising interest rates can cause consumers and businesses to think twice about spending on credit. Less spending means lower demand, so the thinking goes, which theoretically slows down price increases.Cooling the economy in this way is tricky. Too little action, and prices continue to soar. Too much intervention, and a slowing economy could lead to recession.<h2>How does inflation affect your finances?</h2>The term “inflation” refers to global and nationwide changes, but you’re more likely to feel the economic effects of inflation personally:<ul><li>Rising prices can overwhelm your budget, making it harder to make ends meet</li><li>Rising interest rates can make it harder to afford loans and other credit</li><li>Economic uncertainty makes it difficult to plan and prepare for the future</li></ul>If you have some wiggle room in your budget, it’s easier to cope with rising prices. Having three to six months’ worth of living expenses in an emergency fund gives you resources to tap—or a bit of security if you have to reduce the amount you save temporarily. The more tightly your budget is stretched, the more challenging it is to cut back or find the additional dollars you need to cover essentials.<h2>6 steps to help beat inflation</h2>Wherever you fall on the inflationary impact scale, you can take steps to make rising prices less shocking and more manageable. Here are six suggestions for dealing with inflation:<h3>1. Actively re-budget.</h3>Inflation turns your budget into a moving target. Even if your spending habits haven’t changed, your costs are likely to be trending up.Revisiting your monthly budget is key to knowing exactly where you stand. This means understanding exactly how much income you’re bringing in compared to how much you’re spending on fixed expenses like rent or mortgage, plus variables like groceries, gas, utilities, dining out, memberships and subscriptions.Reviewing your recent income and expenses can help you know whether you’re making ends meet despite rising prices. Is your bank account balance dangerously low? Are you still contributing to savings? Have you tapped your emergency fund? Are you using credit cards to bridge the gap?Upping your money management game can make a challenging time a little easier. Consider using your bank’s mobile budgeting features to track and categorize spending if you aren’t using a mobile finance app already. Set up text alerts to let you know when your bank balance is low.<h3>2. Pinch your pennies.</h3>Prices are rising everywhere, so save money everywhere you can. Some possibilities to consider:Shop sales and warehouse stores. Make meal plans that focus on sale items or use this time to experiment with a plant-based (and cheaper-than-meat) menu. Taking time to compare prices can make a meaningful difference.Inventory your cabinets, pantry, freezer, and refrigerator. Rotate food with the earliest sell-by dates to the front. Half-empty bottles of shampoo or body wash hiding under your sink or in your unpacked travel bag are still usable.Shop for better values or negotiate better prices. You may find lower rates on car and home insurance, internet service, or a mobile phone package—with a new carrier or with your current ones. Offer to sign a two-year lease in exchange for reduced rent.Use retailer and credit card rewards. Are cash back points stacking up, out of sight and out of mind? Go ahead and use them. Make notes to yourself about how to deploy your cards to maximize rewards.Get the most from your bank or credit card issuer. Check the bank fees, rewards, and interest rates on your credit cards, checking account, and saving account. High-yield savings, for example, can <a href="https://www.lendingclub.com/personal-savings/high-yield-savings">earn you significantly more interest</a> than a regular savings account. Plus, a rewards checking account may <a href="https://www.lendingclub.com/personal-checking/rewards-checking">provide useful cash back while eliminating fees</a>.Dial back your water and energy usage. Programmable thermostats can conserve energy, and so can scheduling things like washing clothes or running the dishwasher during non-peak hours.<h3>3. Boost your income.</h3>Think about how to bring in additional income. With the labor market holding strong, this could be a good time to ask for a raise or promotion—or to look for a higher-paying job.Getting a side gig is another option. Picking up a few hours a week doing gig work, freelancing, or using your professional skills as a consultant could generate the cash you need. If you have an extra car, furniture, household goods, clothing, accessories, or collectibles you’re ready to part with, these too can raise additional funds.<h3>4. Be cautious with credit cards.</h3>Credit card balances are <a href="https://www.newyorkfed.org/microeconomics/hhdc">increasing nationwide</a>. The Federal Reserve Bank of New York reports credit card balances rose by $24 million in the third quarter of 2024, compared to the second quarter.Credit cards are useful when unexpected expenses—or unexpectedly high prices—bust your budget. Running up and carrying large credit card balances that aren’t paid in full within a month or two, especially while interest rates are rising, can leave you with significant debt, and at a higher interest rate than you’ve been paying.<h3>5. Consider consolidating and refinancing debt.</h3>Rolling your credit card balances into a fixed-rate personal loan might <a href="https://www.lendingclub.com/personal-loan">save you money on interest</a>, especially as credit card interest rates tick up. Interest rates on personal loans are generally lower than they are on credit card balances, and personal loans often come with fixed rates and fixed monthly payments. Personal loans are designed to be paid off in regular installments over a set period of time. With credit cards, you can add to credit card balances as you make payments and interest rates can fluctuate. Both of these factors can prolong paying off your credit card balance.Refinancing your car or home might make sense, even though interest rates on car loans and mortgages are generally higher now than they were last year. For example, if you have significantly improved your credit score since you took out your car loan, you may <a href="https://www.lendingclub.com/auto-refinancing">qualify for a lower interest rate</a> now.Additionally, if the soaring cost of housing means that you now have enough equity in your home to drop PMI, it’s worth a call to your lender to ask about getting an updated appraisal on your home. Even if you have to pay for the appraisal yourself, the savings could be worth it over the long term.<h3>6. Protect your credit.</h3>Good credit can help you secure the best interest rates and terms on loans and credit. That’s valuable whether interest rates are high or low, so maintaining your score should be a priority. Here are a few tips to keep your credit in top shape:Pay your monthly bills on time. On-time payments are the single most important factor in <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-understand-your-credit-score">determining your credit score</a>. Make at least the minimum monthly payment by your due date to avoid penalty interest and late fees. Setting up automatic minimum payments can help ensure that you don’t miss a deadline. Any late payment reported to the credit bureaus can bring down your credit score and linger on your credit report for up to seven years.Keep your balances low. When you use too much of your available credit, your credit score may drop. Aim to <a href="https://www.lendingclub.com/resource-center/personal-finance/what-is-credit-utilization-and-how-to-improve-it">keep your overall credit utilization under 30%</a>; 10% or less is ideal. To figure out your overall credit utilization, add up all of your (revolving) credit card limits and credit card balances, then divide your total balances by your total limits and multiply by 100 to see the result as a percentage. For example, if you have $20,000 in total credit lines and $2,000 in total balances, your overall credit utilization is 10%. Credit utilization can also be calculated in the same way for each individual card to come up with a per-card ratio (e.g., a credit card with a $25,000 limit and a $5,000 balance has a per card credit utilization ratio of 20%).Check your credit scores and reports regularly. Knowing your credit score can help when you’re shopping for loans and credit online, but it’s also wise to <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-understand-your-credit-score">monitor your score regularly</a> to make sure your credit is on track. Review your credit report from all three major credit bureaus (Equifax, Experian and TransUnion) for free at AnnualCreditReport.com to spot issues and errors, and check for signs of identity theft. A good rule of thumb is to obtain and review your credit report at least once a year at minimum.<h2>The bottom line</h2>No one knows how long the current cycle of inflation will last. Tracking your money carefully, spending less, monitoring your credit, and being a wise banking consumer are smart money moves no matter the economic climate.Finding <a href="https://www.lendingclub.com/">the right banking partner</a> can help you make the best of inflationary times by giving you access to competitive rates on personal loans for debt consolidation or home and auto loans for refinancing. If you’re a saver, a <a href="https://www.lendingclub.com/personal-savings/high-yield-savings">high-yield savings account</a> may help you reap some benefit from rising interest rates. Plus, if you switch to or use a rewards checking account, you may earn interest and a bit of cash back to help defray your rising costs.None of this makes dealing with inflation fun or easy. If you can stay flexible and vigilant, the money skills you develop can help you through this inflationary period and on to whatever the economy brings next.

From groceries and diapers to Halloween costumes for pets, nearly 60% of American consumers prefer to shop online for everyday items that make life more convenient, comfortable, and enjoyable. And with rising prices showing no signs of stopping anytime soon, we’re pleased to introduce StackitTM from LendingClub Bank—a new browser extension that automatically finds and rewards eligible members with coupons and cash back for extra savings at more than 15,000 favorite online retailers.

From groceries and diapers to Halloween costumes for pets, nearly 60% of American consumers prefer to shop online for everyday items that make life more convenient, comfortable, and enjoyable. And with rising prices showing no signs of stopping anytime soon, we’re pleased to introduce StackitTM from LendingClub Bank—a <a href="/member-benefits/stackit/install?utm_source=Internal&utm_medium=Blog&utm_campaignid=stackit_launch">new browser extension</a> that automatically finds and rewards eligible members with coupons and cash back for extra savings at more than 15,000 favorite online retailers.<h2>Limited Time Offer to Double Your Cash Back Through 12/31/22</h2>Stackit is a free, new cash back and rewards program available to personal loan members that’s easy to download and install. Eligible members can activate their favorite offers with one click to start saving while stacking cash back offers with existing loyalty program rewards at eligible stores.“We’re relentless when it comes to giving customers more, and Stackit is a perfect example of this,” said Amber Carroll, SVP of Membership and Lifecycle Marketing. “Stackit appears as you shop so it’s easier to activate. You can redeem your cash back for gift cards from hundreds of online stores. And you can continue accumulating loyalty points from merchants and rewards from credit cards while we stack coupon savings and cash back earnings on top of all of it,” she said. “Stackit demonstrates our promise to help members make smart money moves that are both easy and rewarding.”To celebrate the new Stackit rewards program, LendingClub is offering its personal loan members double the cash back on eligible purchases made now through the end of the year. To start earning and stacking rewards, eligible members can simply <a href="/member-benefits/stackit/install?utm_source=Internal&utm_medium=Blog&utm_campaignid=stackit_launch">add the new Stackit Extension</a> to their browsers—doubling their earnings for a limited time through 12/31/22.* Cash back can be redeemed for e-gift cards through the Earnings Dashboard.<h2>New Name, Better Rewards</h2>Earlier this year, LendingClub soft-launched its exclusive member rewards program as a separate Chrome browser extension test that was made available to a small subset of customers. Drawing from these learnings,Stackit is LendingClub Bank’s new and improved rewards program featuring a new extension, expanded browser availability, and enhanced account integration that is rolling out to a wider member audience beginning in November.Currently, any LendingClub personal loan member can download and start using the new Stackit browser extension. (Users of the old LendingClub Chrome Extension can continue earning cash back through 11/30/22; any amount remaining in users’ accounts after 11/30 will automatically be paid out via PayPal. Members are advised to add the new Stackit Extension to continue earning cash back and rewards, including double cash back, on future purchases.) In addition to Chrome,Stackit expands browser availability to Safari and Edge, and enables members to view recent transactions and cash back earnings inside their LendingClub account instead of a third-party site. Planned rollouts to LendingClub members with Auto, Deposit, and other accounts beyond personal loans are expected, however, timing is still under consideration.*Double Cash Back Offer on eligible transactions expires 12/31/22. See <a href="/legal/terms-of-use">Terms of Use</a> for full details. Offer is subject to change without notice.Stackit is a non-deposit product offered by LendingClub Bank.

Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals. 

Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals. However, recent <a href="https://www.fdic.gov/analysis/household-survey/">FDIC research</a> shows approximately 7.1 million Americans are “unbanked,” meaning they do not have a basic checking or <a href="/personal-savings">savings account</a>.<h2>Being Unbanked Increases Costs for Families</h2>Reasons for being unbanked (and underbanked) vary from not having enough money to meet a minimum balance and high or unpredictable fees, to having a history of credit, ID, or banking problems, and/or a general distrust of financial institutions.As a result, this drives unbanked individuals to expensive, alternative financial outlets—such as check cashers, payday lenders, and pawn shops that charge high fees for financial products and services—to manage their money. Such fringe financial “solutions” hold people back from making meaningful financial progress, many of whom are living on low incomes and, likely, already struggling to make ends meet. Without a <a href="/personal-checking/rewards-checking">checking account</a>, these families wind up overpaying for basic financial transactions, making it difficult for them to build savings and assets over time.<h2>More Rewarding Banking for More People</h2>In light of this, we’re proud to share that recent improvements to LendingClub Bank’s <a href="/personal-checking/rewards-checking">award-winning Rewards Checking</a> has earned us official certification by the national Cities for Financial Empowerment Fund as meeting the BankOn National Standards for trust and affordability for consumer transactional accounts.Key features of our award-winning Rewards Checking account include:<h3>Low Minimum Opening Balance</h3><ul><li>Access Rewards Checking with an opening deposit of only $25</li><li>Freedom from Fees Save more of your hard-earned money with no overdraft, monthly maintenance, and incoming wire transfer fees1</li></ul><h3>Unlimited Cash Back</h3><ul><li>Earn <a href="/personal-checking/rewards-checking">unlimited 1% cash back</a> on Qualified (signature-based) Purchases when using your Rewards Checking debit card2</li></ul><h3>Free ATM Access</h3><ul><li>Enjoy <a href="/help/checking-accounts-faq/how-do-i-earn-atm-rebates-on-my-checking">ATM access with no LendingClub ATM fees</a>, plus get unlimited ATM fee rebates on fees charged by other banks3</li></ul><h3>Get Your Paycheck Early</h3><ul><li>Set up direct deposit into your account and you could be eligible to receive your money up to 2 days earlier4</li></ul><h3>Earn Interest</h3><ul><li>Earn an APY that’s more than the national average with account balances of at least $2,5005</li></ul><h3>FDIC Insurance</h3><ul><li>Rest easy knowing your deposits are FDIC-insured up to the maximum amount allowed—$250,000 per depositor for each ownership category</li></ul><h3>Best Online Experience</h3><ul><li>Based on our easy-to-use mobile app and award-winning <a href="/personal-checking/rewards-checking">online checking account</a>, NerdWallet named us Best Bank or Credit Union for Online Experience</li></ul><h2>What Our Members Say</h2>It’s important knowing we’re offering products and services that are helping to improve the financial lives and stability of all Americans, including unbanked and underbanked individuals and families, in every community across the United States.Here’s what some of our members have to say about their Rewards Checking experience with LendingCLub Bank:“I never knew how much money I was losing with my old bank whenever I used an ATM. [LendingClub Bank] reimburses fees from ATM’s and now I look forward to getting the cash back every month.”Robin, a LendingClub Bank Member“The rewards checking account with cash back every month has helped me ditch my credit card and debt.”Lauren, a LendingClub Bank MemberRead more member reviews.<h2>Your Financial Well-Being Matters to Us</h2>At LendingClub Bank, making <a href="/personal-checking/rewards-checking">checking accounts</a> more rewarding for more people is an example of our belief that financial well-being should be attainable for everyone—not just for those who can afford it. Everything we do is centered around empowering our members to meet their personal financial goals by enabling access to a broad range of financial products, services, and educational resources, all designed to help them pay less when borrowing and earn more when saving. Testimonials reflect the real-life experiences of individuals who used our products; however, individual results may vary.<hr/><h4>Terms and Conditions</h4>Accounts subject to approval. $25 minimum opening deposit required. See Product Terms &amp; Conditions for additional details.1. Miscellaneous fees may apply. View Product Terms &amp; Conditions for complete details.2. The Debit Card Rewards Program (“Cash Back Rewards”) provides 1.00% cash-back on all Qualified Purchases using a debit card tied to an Eligible Account.Eligible Accounts are: Rewards Checking accounts that meet the following requirements for the calendar month in review:1). Maintain an average monthly balance of at least $2,500.00; or 2). Receives at least $2,500.00 in Qualifying Direct Deposits.Qualifying Direct Deposits are defined as: Recurring Automated Clearing House (ACH) credits, including payroll, pension or government payments (such as Social Security) made by your employer, or an outside agency. We may require documentation to verify that credits are Qualifying Direct Deposits. Qualifying Direct Deposits do not include peer to peer payments or ACH transfers (funds transfers) from your external accounts.Qualified Purchases are defined as: Signature-based purchases made using the debit card tied to an Eligible Account. These are “credit” purchases that can be made in stores and online. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and is based on how the transaction is transmitted at the time of processing. Qualified Purchases do not include: (1) any goods or services purchased that are returned or otherwise credited to your Eligible Account; (2) unlawful purchases; or (3) purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, Travelers Checks, gift cards, cryptocurrency, casino chips, peer to peer payments, prepaid debit cards, account openings, loan payments, or other cash equivalents). We may report the value of Cash Back Rewards to the IRS as required by law. Any client whose tax status would require us to impose tax withholding of any sort will not be eligible for Cash Back Rewards. Accounts are reviewed after the end of each month. Any earned Cash Back Rewards will be credited to your account on or before the 10th calendar day of the next calendar month. The Eligible Account must be open and active at the time the Cash Back Reward is credited.3. LendingClub does not charge a fee for using another bank’s ATM. Plus, get unlimited automatic ATM surcharge rebates for ATM fees other banks charge you. ATM surcharge rebates apply to cash withdrawals from a Rewards Checking account. ATM fees will be rebated at the end of each statement cycle. Excludes international exchange fees. LendingClub makes its best effort to identify those ATM fees eligible for rebate. In the event that you have not received a rebate for a fee you believe is eligible, please contact Customer Service at 800.242.0272. LendingClub reserves the right to modify or discontinue the ATM surcharge rebate program at any time. Out-of-network ATM fees cost $2.50 on average — source: CNBC as of 01/26/2022. If someone were to use an out-of-network ATM 6 times per month at an average fee of $2.50 per withdrawal, they would spend $180 in ATM fees in 12 months.4. Any account features that enable you to receive direct deposits, or that enable direct deposit funds to be made available to you early, are contingent upon and subject to the payor’s support of such features. 5. Annual Percentage Yield (APY) accurate as of 8/1/2022. Rate tiers are as follows: 0.00% APY applies to balances of $0.00–$2,499.99, 0.10% APY applies to the entire balance on balances of $2,500.00–$99,999.99, and 0.15% APY applies to the entire balance of $100,000.00 or more. Rates are variable and are subject to change, at the discretion of the bank and without notice, at any time after an account is opened. Fees may reduce earnings.

Since 2007, LendingClub has been on a mission to deliver a world-class experience to all our members. This month we took a moment to reflect on the more than four million members who have chosen LendingClub as their partner to help them reach their financial goals.

Since 2007, LendingClub has been on a mission to deliver a world-class experience to all our members. This month we took a moment to reflect on the more than four million members who have chosen LendingClub as their partner to help them reach their financial goals.As the leading digital marketplace bank in the U.S. built on the belief that innovative, creative solutions deliver more value and a better experience, we’re always looking for new ways to provide more. In early 2021, LendingClub became a bank holding company operating a national bank, allowing us to expand our products and level the playing field for everyone.  “Every day we help members leverage their money so they can earn more when saving and pay less when borrowing,” said Amber Carroll, Senior Vice President of Membership &amp; Lifecycle Marketing at LendingClub. “We&#39;re working to redefine banking, which means ensuring our interests are well aligned with those of our members and introducing new ways to better serve their needs.” Since the beginning of the pandemic, how we work, live, and manage our finances has evolved in ways most of us would never have imagined. Increasingly, more Americans across varying credit profiles are struggling to stretch their dollars between paychecks. According to a recent survey from LendingClub and PYMNTS, even among workers earning more than $100,000 per year nearly half are living paycheck to paycheck.  At LendingClub, we’re inspired every day by our members who continue to strive for financial well-being during these unprecedented times—such as by consolidating their credit card debt into a single, more manageable payment, refinancing their auto loan to free up room in their budget, or taking advantage of a CD or high-yield savings account to invest in their future. The Club is working hard to help members reach their goals and we’re incredibly proud to help simplify their path. As one of member recently shared: “This is the third time I have utilized LendingClub&#39;s great rates and lending plans to assist with home repairs and debt consolidation. Their application and payment processes are quick and simple to use. I have saved so much time and money using this funding!” — Christine, a member from Texas We believe everyone deserves a better financial future. If you’re ready to improve your financial well-being and are not already a member of the Club, we can help. From banking smarter with your <a href="/personal-deposits/online-banking">personal checking and savings</a>, to working toward larger financial goals—like <a href="/personal-loan">consolidating debt</a>, <a href="/auto-refinancing">refinancing an auto loan</a>, or making home improvements—you can easily check your rate for a personal loan in minutes, with no impact to your credit score. Thanks again to all of our members for helping us achieve this incredible milestone.

In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. 

In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. During the webinar, Anuj Nayar, our Financial Health Officer, discussed:<ul><li>Our journey to get to where we are today </li><li>Lessons learned from our 15-year history as a fintech pioneer</li><li>How we’re leveraging our digital marketplace bank to further our mission to help Americans on their path towards financial health</li><li>We recently reported Q4 2021 and year-end earnings</li><li>New data on the financial health of U.S. consumers from our latest Paycheck-to-Paycheck report</li></ul>A historic milestone, as one of the first fintech company to acquire a national bank we’ve paved the way for other fintechs to follow suit. With 15 years under our belt, more than 3.9 million members, and over $70 billion in loan originations, the marriage of LendingClub’s marketplace fintech business with all the benefits of being a bank is fundamentally changing the nature of our business and influencing change across the banking industry as a whole. We’re also creating something new for our members -- a bank that puts the customer at the center of what we do. <a href="https://vimeo.com/686043451">Check out the video below to learn more.</a>

LendingClub completed the acquisition of Radius Bank in February 2021. At that time, in addition to the direct-to-consumer deposit business, we inherited a fintech partner program, and several lending businesses. As we reach the one-year anniversary of the acquisition, and in conjunction with the conclusion of a strategic review of our business operations, we have made the decision to discontinue certain businesses that don’t fit our mission.  

LendingClub completed the acquisition of Radius Bank in February 2021. At that time, in addition to the direct-to-consumer deposit business, we inherited a fintech partner program, and several lending businesses. As we reach the one-year anniversary of the acquisition, and in conjunction with the conclusion of a strategic review of our business operations, we have made the decision to discontinue certain businesses that don’t fit our mission.  This includes our yacht loan business. Yacht loans are simply not in line with our mission to help everyday Americans on their path to financial health and we plan to grow our auto refinance business to take its place.  During the review, we also thoroughly examined relationships and operating activities for the fintech partners. As a result of our review, we are asking certain partners to modify their activities and/or operations to match expectations and contractual commitments, and we have begun exiting certain partners. As part of the ongoing dialogue with these partners, we have discussed transition plans or operational changes that could impact the services available to these partners and their customers.   As a pioneer in this space, we have a unique perspective. We operated for 15 years as a fintech with a partner bank model and now we operate as a fintech, a bank, and a partner bank. We work hard at LendingClub to maintain and build a robust, secure, compliant and scalable enterprise. We are guided by our core values, our extensive experience, our deep data set and technology investments, and governed by strong controls, to deliver on behalf of our members, communities, shareholders, partners, and team members.  These business model changes will have no material effects on our business operations and we plan to report more details when we issue our Full Year 2021 and Q4 earnings in a few weeks. Scott Sanborn CEO  LendingClub<hr/>Safe Harbor StatementSome of the statements above, including statements regarding  the effect on our business operations as a result of the business model changes, are &quot;forward-looking statements.&quot; The words &quot;anticipate,&quot; &quot;believe,&quot; &quot;estimate,&quot; &quot;expect,&quot; &quot;intend,&quot; &quot;may,&quot; &quot;outlook,&quot; &quot;plan,&quot; &quot;predict,&quot; &quot;project,&quot; &quot;will,&quot; &quot;would&quot; and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include those factors set forth in the section titled &quot;Risk Factors&quot; in LendingClub&#39;s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each as filed with the Securities and Exchange Commission, as well as in LendingClub&#39;s future filings made with the Securities and Exchange Commission. LendingClub may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. LendingClub does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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{noun} A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.

A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.<h2>What is Revolving Credit?</h2>Revolving credit is a type of credit that lets you borrow money as needed up to an amount called your credit limit. Borrowing reduces your available credit, and repayment replenishes your credit limit (minus the interest and fees charged). Revolving credit does not have a fixed number of payments. This differs from installment credit which lets you borrow a lump sum and pay it back over a set number of fixed monthly payments.<h2>How Does a Revolving Line of Credit Work?</h2>It helps to think of a revolving line of credit as a renewable source of funds within a set credit limit. The lender sets the credit limit upon application approval. You can use as much of your credit limit as you need, paying interest only on the money you borrow. As you repay what you’ve borrowed (plus interest and fees), your available credit replenishes, and you can continue borrowing against your revolving line up to the credit limit.<h3>Types of Revolving Credit</h3>The most common revolving credit products are lines of credit and credit cards.Lines of credit come in different forms, including home equity lines of credit (HELOCs), personal lines of credit, and business lines of credit. Credit lines are typically issued by banks and credit unions, and generally you can draw on your line using special checks, ATM, telephone, and online banking. You’ll only pay interest on the money borrowed from your line of credit. Some lines of credit may be limited in how the funds can be used, such as only for balance transfers from credit cards.Credit cards are revolving credit accounts that, unlike lines of credit, require you make a purchase or cash advance to access your credit line. While card issuers reserve the right to change your credit limit, you can access your available credit as long as your account is in good standing. When you make purchases on a credit card, you can repay the balance in full by the end of your billing cycle to avoid interest charges and fees. If you don’t pay your outstanding balance in full,the balance “revolves,” or rolls over, to the next month and will accrue interest until paid in full. Note: Both lines of credit and credit cards can be secured or unsecured. Secured accounts require collateral; unsecured accounts do not. For example, a HELOC uses your home as collateral. Credit cards are typically unsecured, but some secured cards require cash deposits as collateral.<h3>Why is Revolving Credit Important?</h3>Revolving credit offers greater borrowing flexibility than installment credit. For instance, if you get a $10,000 installment loan for a home remodeling project, you typically receive all the money at once and must start repaying on the entire loan balance immediately plus interest on that amount—even if you don’t use the funds right away. If you need more money, you’ll have to apply for a new loan.On the other hand, if you get a line of credit or credit card with a $10,000 limit, you can draw on it as needed—say, $1,000 in January, $2,000 in April and $1,500 in June­—and interest will accrue only on the amounts you borrow. As you pay back what you’ve borrowed, your available credit is restored up to your credit limit, so you can make future purchases without needing to apply for additional credit.Since it doesn’t require fixed monthly payments, revolving credit can also offer greater payment flexibility than installment loans. If money is tight in a particular month, you have the option of only making the minimum payment on a revolving account, potentially making it easier to meet other financial obligations.Revolving credit can also serve as a financial cushion. Even if you never use it, it’s there in case you need quick access to small amounts of cash in an emergency.<h3>What Are the Risks of Revolving Credit?</h3>Revolving credit has some drawbacks you should be aware of.Collateral risk: If you fail to make payments on a secured revolving credit account, you could lose your collateral. With a secured credit card, that loss could be a few hundred dollars. With a HELOC, you stand to lose your home.High interest rates: Revolving credit typically has higher interest rates than installment credit. Interest rates for most credit cards and many lines of credit are also variable, meaning they can change over time based on economic conditions.Excessive debt: If you only make the minimum payment on a credit card, you could accumulate a large balance. Credit card interest is typically compounded, meaning interest accrues on both the balance of your purchases and on previously applied interest. Compound interest can cause your balance to snowball until it’s difficult to pay down.<h3>How Does Revolving Credit Affect Your Credit Score?</h3>Revolving credit could help your credit score in several ways.<ul><li>On-time payments: Making revolving credit payments on time could boost your credit, since timely payments are a major factor in your FICO® Score.</li><li>Responsible credit utilization: Keeping your revolving credit balance below 30% of your credit limit could increase your credit score. Ideally, you would pay your credit card balances in full each month.</li><li>Diverse credit mix: A variety of accounts, including installment credit and revolving credit, could show lenders you can successfully manage different types of debt.</li></ul>Revolving credit could also have negative impacts on your credit score when not managed responsibly. Late payments: Missing payments could have a significant negative impact on your credit score. Setting up auto-payments on your revolving credit accounts can help ensure you never miss a due date.Excessive credit utilization: Consistently carrying balances that exceed 30% of your available credit limit can reduce your credit score. Hard inquiry: When you apply for revolving credit, creditors perform a credit check called a hard inquiry, which could cause a small, temporary dip in your credit score.

{noun} The total annual cost to borrow money, including fees, expressed as a percentage.

<h2>What is Annual Percentage Rate (APR)?</h2>Annual percentage rate (APR) is the cost of borrowing money on an annual basis. APR is expressed as a percentage, to make it easier to compare the cost of credit. APR and interest rate are sometimes used interchangeably, however, APR and interest rate are different. APR includes both interest plus fees applied over the course of a loan. Because APR is a more complete measure of the cost of credit, it is usually higher than the interest rate.<h2>How is Annual Percentage Rate Calculated?</h2>To calculate APR on a loan, you’ll need to know a few other numbers first:Interest: The total interest charges paid over the life of the loan, also known as the cost of borrowing money.Fees: Review the terms and conditions of the loan to find the fees that apply to your loan. Fees vary by loan type and lender. Principal: The original loan amount.Days in the Loan Term (n): Since APR measures the annual cost of borrowing money, multiply 365 (days) by the number of years in the loan term. For loan terms under one year, use the number of days.The formula to calculate APR is: <img src="//images.ctfassets.net/orqped9h4wgz/6cJEgR4ftSGoIaSuKLlek6/a3ce252e07839182be4e7550cd09e08a/Formula-Calculate-APR.png" alt=""/>The steps to calculate APR are:<ol><li>Find the interest charges</li><li>Add the fees</li><li>Divide the sum by the principal balance</li><li>Divide by the number of days in the loan’s term</li><li>Multiply by 365</li><li>Multiply by 100</li></ol><h3>Credit Card APRs</h3>Credit card APRs do not reflect fees and since a credit card has no set loan amount or fixed repayment term, its APR is simply its interest rate.Under the Truth in Lending Act, passed in 1968, lenders and other financial institutions must disclose APR when offering credit. <h2>Why is Annual Percentage Rate Important?</h2>Knowing the annual percentage rate helps you understand the true cost of borrowing. For example, all lenders are required to disclose APR, which makes it easier to compare loans from different banks and make a more informed borrowing decision.<h2>Are There Different Types of APRs?</h2>There are different categories of APRs depending on the type of financial product.<h3>Credit Card APRs</h3>Credit cards have several APRs that may apply to different transactions or account activities.<ul><li>Purchase APR: The rate you pay for purchases. </li><li>Balance transfer APR: The rate applied if you use a card to pay down balances on other credit cards or loans. </li><li>Cash advance APR: The rate charged on ATM withdrawals or cash-equivalent transactions, like money-order purchases. </li><li>Introductory APR: A promotional interest rate for a limited period of time that is lower than the card&#39;s regular APR, sometimes as low as 0 percent APR.</li><li>Penalty APR: A higher-than-normal rate that results from violating a card’s terms of service. </li></ul><h2>What’s the Difference Between Fixed and Variable APRs?</h2>APRs can be fixed or variable. A fixed APR remains unchanged for the life of your loan. A variable APR fluctuates in sync with a published market index, like the U.S. Prime Rate. <h3>Adjustable-Rate Mortgages</h3>Home loans with variable interest rates are called adjustable-rate mortgages (ARMs). With an ARM, your APR is fixed for an initial term (typically one, three, or five years, but sometimes as long as 10 years), then resets every six or 12 months, based on market rates. <h2>What Affects APR?</h2>The APR you&#39;re offered depends on a few factors: <ul><li>Whether a loan or line of credit is secured or unsecured</li><li>Current economic conditions</li><li>Your credit history</li></ul>Lenders may also consider your income and assets, down payment, and where you live when determining your APR.<h2>How Do You Get a Good APR?</h2>Getting the best APR on a loan or credit card typically requires shopping around. Start by prequalifying with multiple lenders. Prequalifying is a quick process where you provide some basic information about your income and borrowing goal. Then, lenders respond with a preliminary, non-binding estimate of the loan amount and APR. This is typically done through a soft credit check, which doesn’t impact your credit.Then, compare the preliminary offers and submit a full application to your lender of choice. With your detailed financial information and a hard credit inquiry, which will impact your credit, lenders can make a formal loan offer that includes your APR, fees, and repayment terms. If you’re unhappy with the terms you’re offered (or if lenders decline your applications), your credit history might be the culprit. If this is the case, you can work to pay down your existing debts and bring late payments current, which can improve your credit score and chances for approval over time.

{noun} The amount of unpaid interest that has accumulated as of a specific date, either on a loan or an interest-bearing account or investment. 

<h2>What Is Accrued Interest? </h2>Accrued interest is the amount of unpaid interest that has accumulated as of a specific date, either on a loan or credit card you’re repaying or on an interest-bearing account or investment.   Accrued interest can be owed or earned. For example, with a loan or credit card, it’s the amount of interest (payment you owe) that has been incurred since you made your last payment. With an interest-bearing account or an investment, such as a bond, it&#39;s the interest (income you earned) that has accumulated since the last time you received a payment from the financial institution or bond issuer. <h2>How Does Accrued Interest Work? </h2>The way accrued interest works depends on several factors, including the type of account, the balance or principal, the interest rate, timing, and whether you are borrowing money (such as with credit cards, auto loans, and personal loans), or earning money (such as with interest-bearing checking or savings accounts).  <h2>Accrued Interest on Loans </h2>Personal loans, auto loans, and other types of debt charge interest to their borrowers. Most lenders use the simple interest method of accounting, which means that interest that accrues each day is based only on the principal balance of the loan and doesn&#39;t compound on previously accrued interest. For example, on a personal loan, the interest on your debt accumulates daily based on your current loan balance and interest rate. When you make a loan payment, a portion of your total payment amount goes toward the interest that has accrued since your last payment and the remainder goes toward paying down the principal balance of your loan. If you have a fixed interest rate, the daily interest amount will go down over time as your principal amount owed decreases with on time payments. With variable rate loans, the amount of interest that accumulates can fluctuate along with the loan&#39;s interest rate, however there&#39;s generally a downward trend with timely payments.   <h2>Accrued Interest on Bank Accounts </h2>Generally, with interest-bearing deposit accounts, such as a high-yield checking or savings account, interest typically accumulates daily and is paid out monthly. The amount of interest that accrues is based on your balance and the account&#39;s annual percentage yield or APY (which may adjust higher or lower as rates rise or fall) and compounding interest. The higher the APY and your balance, the more you&#39;ll earn. Also, most banks and savings institutions will compound the interest you earn, usually daily. This means that the interest that accrues each day is based not only on your principal account balance but also on the interest that has accumulated since the last payment.  For example, let&#39;s say you have a $10,000 balance in a savings account with an interest rate of 5%. On the first day, your balance earns $1.37 in interest, and that gets added to your interest-earning principal—compounded—at the end of the day. That happens every day. By the end of the year, your principal will have grown to $10,512.67—$500 in interest on your principal balance, and $12.67 from the interest earned on your interest.   Calculation for daily interest rate: 0.05 / 365 = 0.000136986  Calculation for first day’s interest: 0.000136986 x 10000 = 1.36986  While your interest rate is 5% compounded daily; your total return including compounding, or <a href="https://blog.lendingclub.com/apr-vs-apy-whats-the-difference">annual percentage yield</a>,  is 5.1267%. Compounding interest increases your savings over time, especially in a rising interest rate environment. <h2>Accrued Interest on Bonds </h2>If you&#39;re investing in bonds, interest is typically paid out every six months, and the amount that accrues between payments depends on the face value of the bond and its interest rate. This calculation is known as yield to maturity. Interest on bonds does not compound; that is, you don’t earn interest on your interest. <h2>How Accrued Interest Affects Borrowers </h2>If you borrow money, understanding accrued interest gives you an idea of how your loan&#39;s costs are incurred. As you make your regular monthly payments, for instance, the amount of interest that accumulates over time decreases. And if you make additional principal payments on top of your regular payments, you can reduce how much interest accrues even more.   Keep in mind that, if you make an extra payment on a loan the lender may use some of that money to pay off the interest that has accrued since your last regular payment unless you specify otherwise. You can request that the lender put the full amount of your additional payment toward the principal balance, saving you more money on interest in the long run. Understanding how accrued interest works is particularly important if you have student loans. While college students aren&#39;t typically required to make monthly payments while they&#39;re still in school, interest accrues from the moment the loans are disbursed.  For borrowers with federal subsidized loans, the federal government will typically pay interest that accrues while they&#39;re in school and during future deferment periods. If you have unsubsidized loans or private student loans, all the interest that accumulates while you&#39;re in school (and during periods of deferment or forbearance) is added to your balance once repayment begins.  If you want to avoid a growing balance, consider making interest-only payments while you&#39;re still in school. <h2>How Accrued Interest Benefits Savers </h2>If you have an interest-bearing deposit account, look into how often (daily, weekly, monthly, quarterly, semi-annually, annually) your financial institution compounds the interest that accrues in your account. The more frequently interest is compounded (e.g., daily vs. quarterly) makes it possible for you to earn more interest more quickly. And if you&#39;ve invested in bonds, understanding how accrued interest works can help ensure that you get the money you&#39;ve earned, especially if you sell the bond between scheduled interest payments. For example, if you sell a bond three months after your last payment, you won&#39;t receive the amount of interest that accrued during that time. Because the buyer will receive the full semi-annual (every six months) interest payment despite only owning the bond for three months, they should pay you the amount that has accrued since your last payment on top of the price of the bond. <h2>How Is Accrued Interest Calculated? </h2>On loans, lenders generally calculate interest on a daily basis using either a 360-day or 365-day year. The lender will divide the loan&#39;s interest rate by one of those numbers to determine your daily interest rate, which it then applies to your balance. On interest-bearing deposit accounts, interest generally accrues daily. Depending on how often your financial institution compounds interest, the amount that accrues each day may be calculated based on the principal balance plus previously accrued interest. <h2>What Is an Example of Accrued Interest?  </h2>Let&#39;s say you have a personal loan with a $20,000 principal balance and a 12% interest rate. To calculate the amount of interest that accrues every day, you&#39;ll do the following equation: Calculation for daily interest rate: 0.12 / 365 = 0.000328767123288 Calculation for daily accrued interest: 0.000328767123288 x $20,000 = $6.58   In other words, you&#39;ll have $6.58 in daily accrued interest. Over 30 days, that amounts to $197.40.

A debt that is written off as a loss because the financial institution or creditor believes it is no longer collectible due to a substantial period of nonpayment.

A debt that is written off as a loss because the financial institution or creditor believes it is no longer collectible due to a substantial period of nonpayment.<h2>What Is a Charge-Off?  </h2>A charge-off on your credit report indicates the financial institution or creditor has written the account off as a loss and has stopped attempting to collect on a debt that you owe. However, a charge-off does not mean your debt is forgiven—it may be transferred to a collection agency or sold to a debt buyer. As long as the debt remains outstanding, you&#39;re still responsible to pay it. <h2>How Does a Charge-Off Work? </h2>When you miss a payment on a loan or credit card or have a bank account with a negative balance, the creditor or financial institution will attempt to collect the amount you owe. At some point, the creditor may determine the debt is uncollectible and decide to charge it off. This means the creditor has written off the remaining balance as a loss.  At this point, the creditor will report the account as “Charged Off” to the credit reporting agencies which will appear on your credit reports along with the account balance. If the charge-off is legitimate and you can&#39;t convince the creditor to remove it, a charge-off can remain on your credit reports for up to seven years after your first missed payment. Once a creditor has charged off a debt, they may decide to sell it to a debt buyer or transfer it to a debt collection agency for pennies on the dollar. If this happens, your account will be closed, interest will stop accruing on your balance, and your credit report will reflect that the account was &quot;Charged Off.&quot; However, you will still be liable for paying off the debt to the debt collection agency. Additionally, the collection agency may report a collection account for the same debt, further impacting your credit score. <h2>Will a Charge-Off Impact Your Credit Score? </h2>Your payment history is the most influential factor in your FICO credit score. Missing just one payment could have a significant negative impact on your credit score. If a debt balance remains unpaid long enough for the creditor to stop attempting to collect payment, the worsening delinquency and subsequent charge-off could have a long-term  and far reaching impact to your credit score.  For example, a low credit score and history of nonpayment may make it more difficult to get approved for credit in the future. It may also impact your ability to get approved for a residential lease or to qualify for lower interest rates on auto or homeowners insurance.  <h3>How Can You Repair a Charge-Off? </h3>The best way to repair a charge-off is to prevent it from happening. If you start missing payments, don&#39;t ignore the situation. Contact your lender and ask if there’s anything that can be done to help you avoid a charge-off situation. In the event your debt is charged off, as long as there is a balance, you’re still responsible for repayment which is why you should consider ways to pay off the debt as soon as possible to avoid having it go to collections. Even if you cannot pay off the debt in full, you may want to consider negotiating a payment settlement with the creditor for less than what you owe or, if necessary, having the debt discharged in bankruptcy.  In some cases, you may be able to negotiate with the lender to remove the charge-off from your credit report in exchange for full payment—a process known as “pay for delete.” Even if you can&#39;t get it removed, paying off the balance could potentially reduce the impact to your credit score.  If the creditor does sell the debt to a collection agency, you&#39;ll face more attempts to collect the amount you owe. Some debt collectors may even resort to lawsuits to force collection through a court order. <h3>How Can You Limit Charge-Off Damage? </h3>The timeframe for when a creditor decides to charge-off an account ranges from 120 to 180 days from your initial delinquency date. You&#39;ll typically receive letters and phone calls reminding you of the past-due payment, urging you to get caught up. Don&#39;t ignore the creditor—this is the best time to talk to the lender to see if you can avoid a charge-off. If you&#39;ve had an account charged off recently, contact the creditor as quickly as possible to verify the accuracy of the account details and look for opportunities to pay off some or all of the debt to avoid transfer to a collection account and further damage to your credit score. In some cases, a charge-off could be reported in error. If this happens, it could damage your credit score, so you should act quickly to dispute the negative item with the credit reporting agencies. As long as the dispute isn&#39;t frivolous, the credit bureaus are required to investigate it and remove or update the information if it&#39;s found to be innacurate.   To contact the credit bureaus:  <ul><li><a href="https://www.equifax.com/personal/credit-report-services/credit-dispute/">Equifax</a> </li><li><a href="https://www.experian.com/contact/personal-services-contacts.html">Experian</a> </li><li><a href="https://www.transunion.com/credit-disputes/dispute-your-credit">TransUnion</a> </li></ul>If the creditor decides to charge-off your account, it&#39;ll only report only to the credit reporting agencies that it normally reports to. For many lenders, it&#39;s all three, but some lenders may only report to one or two of the major credit bureaus.

{noun} An interest rate that remains the same for a set time, usually for the life of the loan.

An interest rate that remains the same for a set time, usually for the life of the loan.<h2>What Is a Fixed Interest Rate?</h2>A fixed interest rate is an interest rate that remains the same for a set time, usually for the life of the loan. With fixed-rate financing, borrowers can enjoy payment stability and avoid the risk of a variable interest rate—which may increase substantially over time, especially in rising interest rate environments.<h2>How Do Fixed Interest Rates Work?</h2>When you take out a loan with a fixed interest rate, your loan terms will define the fixed rate period.Generally, for financial products like fixed rate mortgages and personal loans, your interest rate will remain the same throughout your loan term, as will your monthly payment amounts.For financial products such as adjustable rate mortgages, the interest is variable, which means it can change periodically. Often, an adjustable rate mortgage (ARM) will have an initial period where the rate is fixed. After the fixed period, your interest rate may stay the same or it may adjust based on prevailing interest rates at the time.<h2>What Is the Difference Between Fixed and Variable Interest Rates?</h2>Fixed interest rates generally won’t change—either for the life of your loan or during a predetermined fixed period. In contrast, variable interest rates fluctuate based on market conditions and may change at any time.<h3>What Benefits Do Fixed Interest Rates Offer?</h3> Having a fixed rate loan offers several benefits for your finances.<ul><li>Financial Predictability. A fixed interest rate makes it easier to plan your finances since your monthly payments don’t fluctuate over the fixed period, usually the life of the loan. Such predictable payments can help you more easily manage your budget and alleviate stress.</li><li>Eliminate Interest Rate Risk. With a fixed interest rate, you don&#39;t have to worry if interest rates start to increase in a volatile economy. Compared to loans with variable rates, a fixed-rate loan with a lower interest rate could save you money in a rising interest rate environment.</li><li>Potentially Lower Borrowing Costs. With fixed-rate loans, you’ll know your total borrowing costs—including interest and fees—before you sign your loan documents. With variable-rate loans, it’s difficult to calculate your total borrowing costs since your interest rate may change substantially over time.</li></ul><h3>What Are the Drawbacks to Fixed Interest Rates?</h3>While a fixed interest rate can help you plan your finances for the long term, there are a few drawbacks to consider.<ul><li>Potentially Higher Rates. Adjustable-rate financial products often have lower interest rates for an initial, introductory fixed period which may temporarily lower your cost to borrow. Fixed-rate products don’t offer such “teaser” rates.</li><li>Risk in Decreasing Interest Rate Environments. If interest rates start going down, you may end up paying more to borrow on a higher interest rate than if you took out a new loan.</li><li>Refinancing Costs. Even if you decide to refinance to get a lower rate, refinancing costs may outweigh the savings you may realize, and the process can be time-consuming. It’s important to compare the total cost of borrowing of your existing versus a potentially new loan before making a decision.</li></ul><h2>What Can You Do to Get a Good Fixed Interest Rate?</h2>Generally, having a high credit score and a demonstrated track record of responsible debt management can help you land a lower fixed interest rate. In contrast, if you have a low credit score and a spotty history of on-time payments, the lender may view you as a higher-risk borrower and may not offer you the best fixed interest rate they have available.<h2>Can You Switch from a Variable Interest Rate to a Fixed Interest Rate?</h2>In most cases, you can&#39;t switch from a variable to a fixed interest rate on an existing loan. While you may be able to refinance your loan—either with your current lender or a new one—and move to a fixed-rate loan that way, it’s important to consider how well you would be able to cope with economic uncertainty. A low variable rates may be tempting initially, but should economic conditions sour and rates begin to rise rapidly, it may be difficult to find a good fixed rate when you want one. Or you may experience an unexpected obstacle, like job loss, that could make refinancing into a fixed interest rate loan difficult.<h3>Are Credit Card Interest Rates Fixed?</h3>Generally, credit card interest rates are variable, not fixed.<h3>Are Student Loan Interest Rates Fixed?</h3>It depends on the type of student loan. Student loans like Perkins Loans and PLUS Loans have fixed interest rates. Many other direct federal student loans—both subsidized and unsubsidized—have fixed rates as well.

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