Credit Score Articles

Good credit score makes it easier to save money

One of the benefits of having a good credit score is that it's easier to save money because one typically can get better interest rates when paying for their cars or homes.

In fact, the widespread attention being paid to the importance the credit score may overlook the importance of also saving money, even though government statistics have found in recent months that this is becoming a bigger part of the average person's financial routine.

The recession seems to have played a role in changing public attitudes toward the tax refund, which was once seen as something more of a cash windfall that could be used as bonus money. According to a recent survey from CompleteTax, 35 percent of taxpayers expecting a refund this year plan to save.

Other priorities found in the survey included 23 percent saying that they planned to pay bills with their tax return, while 13 percent said their refund would go to pay off credit card debt and 12 percent said the money would be spent on essential purchases. With the vast majority of taxpayers either planning to save their tax refund or use it pay down debt, only 15 percent said that they planned to spend most of it.

"People are not looking at their tax refund this year as a windfall to go out and splurge. Rather, it’s a necessity to help build or rebuild their savings or reduce their debt," said Gary Lundberg of CompleteTax.

Also, 51 percent of taxpayers said they expected a return as large as they got last year, while 25 percent expected a small one and 19 percent expected it to be about the same. Those earning less than $50,000 were the most likely to say they planned to pay off bills.

Even those who struggled to find work in 2010 may be able to benefit at tax time, because one provision in the government stimulus bill exempts the first $2,400 collected in unemployment benefits from being taxed.