Ways to Save on Gearing Up for Cold Fall Weather

31 Ways to Save on Staying Warm & Having Fun This Fall

With the cold weather approaching, it’s time to look for ways to stay warm & entertained without breaking your budget. Consider: How are you going to keep your heating costs down this year?

The average American spends about $115.49 per month on energy, and nearly half of that goes towards heating and cooling. But heating isn’t your only concern — winterizing your home, your car, and your wardrobe costs money.

Here are some fall energy-saving tips and ideas for low-cost fall fun to help you enjoy colder weather without overspending.

Fall & Winter Savings Tips

Ready for sweater weather? Consider these 31 tips for saving money this fall while staying cozy and enjoying the season.

1. Seal Your Home

Before the cold weather hits, use caulk to seal any openings around your house that could allow cold air in. If too much cold air is getting in, then you’ll need to crank up the thermostat, which may cost you unnecessarily. Install weather stripping and seals around your doors, windows, mail chute, and air conditioner, too.

Recommended: 25 Fall Home Projects to Tackle This Year

2. Have Your Heaters Checked

Get in touch with your landlord, repairman, and/or heating company to check that your furnace and fireplace are properly functioning. They may check to see that the pilot is still on and clear any buildup and dust that may have accumulated in the warmer months, potentially saving you a costly (and inconvenient) service call mid-season.

3. Clean Up Your Yard

Branches, debris, or overgrown trees on your property can damage your home or car. Clean up any unsecured items or dead trees and branches while it’s still warm enough to enjoy the outdoors. Call a professional gardener for advice if you need to.

4. Winterize Your Gutters

Gutters filled with leaves and other debris can clog and form ice dams in the winter. Water can get into the roof and foundation of your home. Spend some time clearing your gutters before the cold weather comes to avoid costly repairs.

Recommended: What are the Most Common Home Repair Costs?

5. Set Your Thermostat to 68 Degrees (or Lower)

Make a goal and tell everyone in your home that you want to keep the thermostat at 68 degrees or lower throughout the fall and into the winter. This can help you keep utility bills under control.

6. Open Curtains During the Day

Take advantage of sunlight to heat your home and provide bright natural lighting throughout the day. You may be able to turn your thermostat down during the day when the curtains are open for additional energy savings.

7. Close Curtains at Night

When the sun starts to set, close those curtains to trap that heat inside your home and insulate your windows.

8. Invest in Thermal Curtains

Those cute sheer panels you have up in the summer just aren’t going to cut it in the cold fall months and beyond. Instead, switch them out for thermal curtains, which will add more insulation and keep your home warmer. Ideally, your thermal curtains will have thick padding and multiple layers of fabric to stop air from circulating from your window and into your home.

9. Set Your Ceiling Fan to Spin Clockwise

Warm air rises. When your ceiling fan spins clockwise, it pushes down the warm air from ceiling level to your level — to keep you cozy all season long.

10. Turn Your Thermostat Down at Key Times

Whenever you don’t need much heat, like when you’re sleeping or out at work, you can find some extra fall savings by turning your thermostat down 10 to 15 degrees. Less heating should mean lower heating bills.

11. Install a Smart Thermostat

When you’re looking into how to save on utilities, technology is your friend. If you often forget to turn your thermostat down, you might want to invest in a smart thermostat such as the Google Nest. The Nest allows you to control your thermostat from anywhere via smartphone app, and offers intelligent programming such as Eco mode, which can sense when you are not home and automatically adjust the temperature to save energy.

12. Wear Warm Clothes at Home

Break out your favorite cozy sweater and flannel pants for wearing around the house, because they could help you save big on your electric bill. For every degree you lower your thermostat in cold weather, you could save 1% on your monthly heating bill. It’s called sweater weather for a reason, after all!

13. Pile on the Blankets

Along with layering up, another one of the best savings tips for cold fall weather is to purchase warmer blankets. Typically, down, cotton fleece, wool, and cashmere blankets are the warmest. They are great insulators and perfect for using on your bed or on the couch.

14. Check Your Car Battery

It takes much more energy to properly power your battery in the colder months. Along with making sure your car battery is functioning properly, ask a mechanic to check and see if it’s at or above 600 CCA. This should improve your car’s performance in cold weather.

15. Look Into Your Car’s Cooling System

While you’re at the mechanic and winterizing your car, have your cooling system checked, too. It’s a good idea to make sure you have a ratio of between 50/50 and 70/30 of antifreeze to water to protect against freezing and potential corrosion.

Recommended: 31 Ways to Save Money on Car Maintenance

16. Consider Buying Winter Tires

Getting winter tires is crucial if you live somewhere that experiences winter weather early on, like in October. When temperatures drop to freezing levels, the rubber compounds in the non-winter tires will harden, and this will reduce the tire’s ability to grip the road. This could be very dangerous and not only lead to accidents and injuries but considerable costs as well.

17. Head to the Thrift Store

While buying new cold-weather clothes may be convenient, you could save big by purchasing these items secondhand. Even if you don’t find any clothes that fit, you may be able to stock up on scarves, mittens, blankets, and more.

18. Shop at the Right Times

If you’re purchasing new fall clothes in September, you likely aren’t going to get the best deal. Instead, break out those fall clothes from last year and then wait until late January or early February to restock on cold-weather apparel. The end of the season is when you’re going to snag the best deals.

19. Sign Up for Store Promotions

If you sign up for store emails with your favorite retailers, you can access coupons and other deals throughout the season and save on your cold-weather clothing and accessory purchases.

20. Sign Up for Rewards Programs

Enrolling in retailers’ rewards programs could also lead to big fall savings. For instance, with Macy’s Star Rewards, you can get 1% back in rewards, a birthday surprise, and other perks and offers. If you use your Macy’s card to make purchases, you could save even more. Platinum members get 5% back on purchases as well as free shipping and more. Look into your favorite stores’ rewards programs to see what you could receive for being a loyal shopper.

21. Look at Shipping Costs

When it comes to shopping for cold-weather gear online, make sure you calculate shipping costs into your budget. If you need to buy something from a specific store, determine whether the shipping costs are worth it or if there is an option to get it shipped free to the store.

Recommended: 9 Tips for Finding the Best Deals Online

22. Create a Fall Budget

Having a budget year-round is ideal, but creating one for the fall can keep you at the top of your fall savings game. Use a budget planner app (like SoFi Relay) to track your spending, meet your fall savings goals, see all of your accounts on the go, and monitor your credit score.

Recommended: Budgeting for Basic Living Expenses

23. Make Your Fall Lattes at Home

While you may love the Pumpkin Spice Latte from Starbucks — who doesn’t? — that treat could end up costing you more than $5 a pop. Instead, buy ground coffee that comes in fall flavors and the instant version of the PSL, which is only $5.99 for a pack of five at Target. Add some whipped cream, and the homemade version will taste just as good.

24. Eat More Plant-Based Foods

Save money on food in the fall by switching to at least a partially plant-based diet based on the fruits and vegetables that are in season. Foods that are in season in the fall include apples, pumpkins, bananas, carrots, spinach, kale, lemons, cabbage, raspberries, bell peppers, beets, and broccoli.

25. Make Chili

Chili is a cost-effective food that can be plant-based or meat-based and keep you satisfied for days on end. At the beginning of the week, make a big batch that you can eat on its own, with bread, or inside of tacos. This comfort food will keep you warm, cozy, and satiated all season long.

26. Clip Those Coupons

Another way to save is by looking in your weekly store circulars and clipping coupons for all the foods you’re going to purchase. You probably get these for free in the mail or as an insert in your weekly newspaper.

27. Go Online for Coupons

You can also save money on food by searching for coupons online prior to heading out to the store. Aside from your grocery store’s coupon offerings, you can find entire websites filled with manufacturer’s coupons simply by searching “grocery coupons.”

28. Find Free Events in Your Area

While going to your local county fair or pumpkin patch is enjoyable, it could involve a pricey admission fee. Instead, look for free events to go to in your area. Check your local newspaper’s event calendar or log onto Yelp for some ideas.

29. Sit Around the Fire

If you have a fire pit, you can invite some friends over for some low-cost or free fall fun. Break out the marshmallows and hot apple cider to get into the spirit of the season!

30. Jump Into a Pile of Leaves

Piles of leaves provide lots of entertainment, especially for kids. Once you’re finished raking your yard, set aside a pile you or your kids can jump into for some good old-fashioned free fall fun.

31. Switch to a Streaming Subscription

While a cable package can cost more than $200 per month, streaming services like Netflix cost less than $20 per month. Since you’re going to be spending a lot of time indoors, maximize your fall savings by opting for a streaming subscription instead of paying big bucks for cable packages.

The Takeaway

With a little common sense and some focused spending on things like preventative maintenance and smart technology, you could cruise into this fall and winter prepared to stay cozy and save money.

Optimize your fall savings even more by signing up for a cash management account from SoFi Money. You won’t pay any minimum balance, overdraft, or monthly fees. Additionally, you can access 55,000+ fee-free ATMs within the Allpoint Network when you need to take out cash.

Ready to save in a way that’s convenient for you? See how SoFi Money can help.

Photo credit: iStock/StefaNikolic


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SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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What Hurts a Home Appraisal?

What Hurts a Home Appraisal?

When it comes to what hurts a home appraisal, some of the main factors include updates that were needed but weren’t made, comparable properties, your home’s location and whether you hired an inspector to flag any issues or necessary repairs. By getting out ahead of the factors within your control before an appraisal, you may get a more favorable answer to the all-important question of what your house is really worth.

The more you know and understand about the home appraisal process, the better. Here’s a crash course of sorts on the process and what negatively affects home appraisal.

A Primer on Home Appraisals

A home appraisal reveals the fair market value of a home, which is important whether you’re buying, selling or refinancing a mortgage. An appraisal can also be used to determine property taxes. Lenders require appraisals because they ensure that the lender won’t offer you a loan that’s more than what the home is worth.

So, what do appraisers look for when they do a home appraisal? A real estate appraiser, who is a third party licensed or certified by the state, will review a home inside and out, looking at a home’s age, size, foundation, appliances and neighborhood, among other things. They will then compare the house to other comparable homes in the area to assess its value.

An appraisal is usually required by a lender when a buyer is getting a mortgage or when someone is refinancing their mortgage. If an appraisal is for a home sale, neither the buyer nor the homeowner can be present. When someone is refinancing, on the other hand, the homeowner is permitted to attend. That no doubt is a plus as it’s an opportunity for the homeowner to ensure the appraiser takes note of any upgrades and new features that could increase their home’s worth.

Things That Can Hurt Your Home Appraisal

Much hinges on the appraisal, so you’ll want it to go as smoothly as possible. Start by knowing what hurts a home appraisal so you can avoid any hiccups that could prevent you from getting the highest value for your home.

1. Much-Needed Updates That Never Happened

If you’ve been putting off any needed upgrades, this is when it could come back to bite you. Let’s say you’ve been meaning to renovate your kitchen and somehow just didn’t get around to it. A kitchen that looks pretty much like it did 30 years ago isn’t going to wow anybody, least of all an appraiser who will wonder what else is in decline.

While it can be helpful to take care of some common home upgrades that can net you a return on your investment, you don’t necessarily want to go crazy updating either. Not only could it be tougher to recoup all the money you put into home improvements, you may find that while you love the changes you’ve made, your taste may not have universal appeal. It’s a delicate balance to make upgrades that will get two thumbs up from the appraiser and the potential buyers.

2. Comparable Properties

When it comes to housing, you do kind of have to keep up with the Joneses. With appraisals, it’s all about sales of comparable homes over the last 12 months. What are homes similar to yours on your street or a few blocks over selling for? If they are getting top dollar that will push up the price of your home. On the flip side, if those homes are hanging around on the market for months and selling at prices below expected, that could put a drag on what you can get for yours.

Comparable sales help determine the market, which is why both your real estate and your appraiser will look at them. Ideally, the appraiser, as much as possible, is comparing apples to apples so you get a fair appraisal. The other properties should be similar in size, age and amenities, among other factors. It’s a losing proposition for you if the appraiser goes for the extreme, say a house that sold at a bargain because someone was in a hurry to bail for whatever reason.

3. Skipping a Home Inspection

When it comes to your house, ignorance is not bliss. While you may know when you need to make a repair to a leaky roof, for instance, there can be plenty wrong that’s not obvious to you. That’s why it’s a good idea to have a home inspection before you put your house on the market.

A home inspector can suss out all manner of malfunctions that could be plaguing your house, particularly things you may be clueless about. If you get bad news, think of it as good news since you’ll now have the opportunity to make necessary home repairs before you put your house on the market and an appraiser comes with a magnifying glass of sorts looking for signs of trouble.

4. An Undesirable Location

Few things matter more in real estate than location. If you’re in a neighborhood that’s seen as flawed or your house is on a busy or noisy street, that could all come into play when it comes to the value of your property.

Location also counts within your home. If your layout is dated — say it’s old-fashioned and highly compartmentalized instead of today’s more in-demand open layout concepts — that could be less attractive to buyers. Or, they might only be interested in knocking down walls and reconfiguring the space, which likely means they’ll want to pay less for the house if they are going to have put money into it to bring it in line with what they’re looking for.

4 Ways to Prevent Low Home Appraisals

Just like there are some things you can get out ahead of before they hurt your home appraisal, there are also some moves you can make to prevent your home appraisal coming in lower than you’d like.

1.   Hire your own appraiser: Typically, the lender hires the appraiser. However, there’s no reason you can’t hire your own appraiser before the sale. Your realtor should have a handle on someone who is experienced and has a reputation for giving fair estimates. You then can ask the buyer or lender’s appraiser to review what your appraiser produced.

2.   Provide records: If you have records of repairs and upgrades that’s the kind of proof that works in your favor. It also doesn’t hurt to have documentation like photos — before and afters aren’t just for an Instagram post of your new haircut.

3.   Prepare for the appraiser’s visit: Don’t dismiss the importance of maintaining curb appeal. Your home should be clean inside and outside before the appraiser comes over. Strive to get as close to an interior design catalog as you can.

4.   Dig up property comparables on your own: You don’t have to leave it to the appraiser and real estate agents to do all the homework. Go the extra mile and consider calling real estate agents with homes in escrow to get the sales prices. Create a list that you can pass along to the appraiser.

Checking Your Home Value Without an Appraisal

You can get a sense of what your home is worth even if you don’t get an appraisal. There are several websites that can give you valuable insight into your home’s potential value, including Zillow, Trulia, Redfin, Realtor.com and Eppraisal, among others.

Another option is to use a house price index (HPI) calculator , which relies on data from mortgage transactions over time to estimate a home’s value. Projections are based on both the purchase price of the home and the changing value of other homes nearby. This tool can help you see how much a house has appreciated over time. You’ll also get a glimpse of estimated future changes in mortgage rates.

The Takeaway

Because your home is likely your biggest asset, it’s worth putting the time and effort into the appraisal process. The payoff could be huge if you tend to the major factors that hurt an appraisal or get proactive about preventing a low appraisal.

If you’re worried about budgeting for any necessary updates or repairs, a tool like SoFi Relay can help you track your spending in different categories.

Stay on top of your budget as you get your house appraisal ready.

Photo credit: iStock/ucpage


Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
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What Credit Score is Needed to Rent an Apartment in 2021?

What Credit Score is Needed to Rent an Apartment in 2021?

While there’s no universally required credit score needed to rent an apartment, having a solid credit score can certainly help your chances of a landlord handing you a set of keys. In general, a landlord will look for a credit score that is at least “good,” which is generally in the range of 570-739. However, that can vary by landlord or property manager, as well as the location in which you’re renting.

Read on to learn more about how your credit score can affect renting an apartment — and how you can approach renting if you have a lower credit score.

What Credit Score Do I Need to Rent an Apartment?

Truth is, the answer to what credit score you need to rent an apartment is a bit squishy. In general, you’ll have a better chance of approval if your credit score is at least deemed “good.”

What’s considered good? Credit scores are generally classified as follows per FICO® (keep in mind that different scoring models may vary):

•  Exceptional: 800-850

•  Very good: 740-799

•  Good: 570-739

•  Fair: 580-669

•  Very poor: 300-579

There also are variables that can affect whether your credit score qualifies you to rent an apartment. For example, if you live in a city where there is huge demand for apartments, landlords may give preference to those with higher credit scores.

Can You Get an Apartment if One Person Has Bad Credit?

If one person has bad credit, know that it will likely make it tougher for you to get an apartment. Landlords have a lot of leeway and can follow criteria of their choosing.

Still, it’s not impossible even if it is trickier. One smart strategy in this situation is to put the lease in the name of the person whose credit and income is best. You could also offer to show your income or provide a reference.

What Landlords Look at On Your Credit Report

When your landlord reads your credit report, they will be looking for clues about your financial health and habits.

Of much importance is your debt-to-income ratio. In a nutshell, this is the amount of your monthly pre-tax income that gets spent on debt payments. It’s certainly not news to you that if you’ve filed bankruptcy that’s not going to be a negative. A landlord also may be spooked if you have hefty credit card balances.

Your credit history disclosed on your credit report also may include your rental history as some landlords and rental property managers share your business to the credit bureaus. This can be plus if you’ve been doing the right thing; if not, this can work against you.

Too many hard inquiries also can raise red flags for a landlord. This is because frequently applying for different types of credit could suggest financial instability, which increases risk in the eyes of lenders — as well as landlords.

How to Rent an Apartment with a Lower Credit Score

Just because your credit score isn’t stellar doesn’t mean you’re resigned to sleeping on a friend’s couch or living with your parents. There are ways to rent an apartment even with a lower credit score.

Pay a Higher Security Deposit

One way to show that your credit history is just history is by offering to make a higher security deposit. Say you are required to pay first and last month’s rent upfront. To sweeten the deal, maybe you tack on a couple additional months of rent.

If you want to instill confidence in your potential new landlord, this might do it. Just make sure you actually have the room in your budget to offer up the cash.

Get a Co-Signer

While getting a co-signer may put a damper on feeling like you’re finally a grownup, it may be worth sucking it up and getting a creditworthy parent or other trusted individual to co-sign for your apartment. This can give your landlord peace of mind if someone is willing to pay the rent on your behalf if you’re unable to.

Just keep in mind that your co-signer will be on the hook if you drop the ball and that co-signers generally must meet even steeper credit score and income requirements.

Play Up Your Income

Maybe your credit score is nothing to brag about, but you’ve worked hard and now have your finances in order, with solid savings and a good income. If you could show that you earn three or four times your rent on a monthly basis, that might divert attention from your lousy credit score. Additionally, if you have a solid stash in your savings account, that can also give your landlord assurance that you have the funds to cover your monthly rent.

Consider Getting a Roommate

Adding a roommate to your lease or rental agreement can increase your creditworthiness and your qualifying income. This is especially the case if you can find a roommate with good credit — and get your landlord to pull their credit first.

Benefits of Good Credit When Renting an Apartment

A landlord needs more than their gut instinct to help them determine who to rent to, which is why a credit score carries a lot of weight when it comes to getting your rental application approved. A good or — better still — an excellent score can give landlords the confidence to consider you for the apartment, especially if all other signals they get when checking on your background indicate they should give you the greenlight.

Having a solid credit score can help you to snag the apartment you want, and avoid the hassles associated with trying to secure an apartment when your credit isn’t as great, such as getting a roommate or a co-signer. Especially if you live in a city with a competitive rental market, a good credit score can be a serious edge.

How to Monitor and Keep Track of Credit Scores

Ideally, you want to check your credit and get a copy of your credit report before you start apartment hunting. It’s important to know where you stand and, if there are any errors, you want to fix them right away.

Until April 20, 2022, you can get free weekly credit reports from the three national credit reporting agencies, Equifax, Experian and TransUnion. To get your free reports, simply go to AnnualCreditReport.com .

While your credit report provides information on your various credit accounts and their balances and your payment history, it does not include your credit score. You can check your credit score by looking at a loan or credit card statement or through an online credit score checker. You can also buy a score directly through credit reporting companies. Even if you might have checked your credit score not that long ago, don’t skip doing so again — your credit score updates every 30 to 45 days.

If your score is low, consider taking steps to improve it before jumping into your apartment search. Actions like paying down credit card balances and making sure you don’t have any more late or missed payments for a stretch can show progress.

What’s Expected in 2022?

According to an outlook on the U.S. rental market published by the property management platform ManageCasa, demand for rentals will grow in the coming year. In fact, ManageCasa writes that the “rise in rents for the rest of 2021 and 2022 might be surprising to some.”

The report indicates that the U.S. rental property market is currently experiencing severe shortages, heightened demand and high property prices, while those looking to rent are competing with a wealthier pool of renters. This is driving up prices.

Further compounding the situation is the fact that housing prices are so inflated that the percentage of people who can afford a home has already dropped off and likely will continue to do so, according to Forbes’ predictions . This could lead to a rental market that is even more competitive, which may not bode well for those with less than stellar credit.

The Takeaway

You’ll want to shoot for having a good credit score — generally in the range of 570-739 — to get an apartment. While you may be able to still get an apartment if you don’t have solid credit, it will make it more challenging with the competition you’re likely to face.

If you have the luxury of time, do what’s necessary to improve your score so that when you begin your search you’ll be an ideal candidate. An online credit monitoring tool like SoFi Relay can make it easier.

Stay on top of your credit score and easily see what impacts it.

Photo credit: iStock/MixMedia


Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website
.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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What Credit Score Do You Need to Buy a Car in 2021?

What Credit Score Do You Need to Buy a Car in 2021?

Because a credit score is an important indicator for determining a consumer’s creditworthiness when buying a car, those with excellent credit histories tend to have an easier time borrowing money on favorable terms compared to those with lower credit scores. However, industry data shows that high-risk borrowers remain viable candidates for auto loans. In other words, there is no universally defined credit score needed to buy a car.

Read on to learn how your credit score can affect buying a car, plus some tips for purchasing a car with a lower credit score.

What FICO® Score Do Car Dealers Use?

There are a few different scoring models that car dealers may use for determining a customer’s credit score. They may use the FICO Auto Score 10 , an industry-specific model featuring a score range from 250 to 900. The auto industry also may use VantageScore 3.0 or the newer VantageScore 4.0 model, which has a score range from 300 to 850.

No matter which scoring model is used, a bad credit score falls on the lower end of the range and a good credit score sits on the higher end of the range.

What Is the Minimum Credit Score To Buy A Car?

There may not necessarily be a minimum credit score required to buy a car. Consumers with deep subprime credit scores from 300 to 500 have obtained financing for new and used vehicles in the second quarter of 2021, according to the credit bureau Experian’s State of the Automotive Finance Market report for that period. Although the percentage of borrowers in this category is very low, this indicates that even those with the lowest credit scores still may have access to auto financing.

Average APR by Credit Score Ranges

Consumers from all credit score categories have obtained auto loans in 2021, but car buyers with excellent credit histories tended to secure the lowest annual percentage rate (APR) financing, according to Experian’s Q2 report. When assessing what is a good credit score to buy a car, Experian’s data confirms that consumers in the super prime and prime categories obtain the lowest interest rates on average for financing.

Quarterly financing data on new vehicle purchases in the second quarter of 2021 shows the following average APRs by credit score ranges:

•  Deep subprime (300-500): 14.59%

•  Subprime (501-600): 11.03%

•  Near prime (601-660): 6.61%

•  Prime (661-780): 3.48%

•  Super prime (781-850): 2.34%

How to Buy a Car With a Lower Credit Score

Obtaining a loan to purchase a new or used vehicle when you don’t have great credit can be cumbersome, but it’s not impossible. Here are some ways a consumer with poor credit may be able to obtain auto financing:

Make a Large Down Payment

Offering a large down payment on a vehicle purchase may allow car buyers to obtain more reasonable rates and better terms for financing, resulting in more affordable monthly loan payments. By putting more money down at the time of purchase, lenders also may view the loan as less risky, thus increasing your odds of approval.

Get Cosigner Assistance

Buying a car with the assistance of a cosigner is another way to potentially bolster your chance of securing favorable financing. A cosigner agrees to share the responsibility of repaying the loan, effectively promising the lender that if you don’t make the payments they will. If the cosigner is creditworthy, it puts the buyer in a much better position to obtain financing than going it solo.

Consider a Less Expensive Car

Especially if you are buying a car with bad credit, it is important to know how much you can realistically afford to spend — and then stick to that budget, even if the dealer tries to upsell you. Additionally, finding a less costly car will reduce the amount you need to borrow, and it may be easier to get approved for a smaller loan amount than a larger one.

Benefits of Good Credit When Buying a Car

The benefit of a good credit score when buying a vehicle is that you may secure lower interest rates compared to consumers with poor credit. Unless a consumer buys a vehicle outright with cash or receives 0% APR financing, the consumer will eventually face monthly principal and interest payments until they’ve paid off the loan balance in full. Auto financing terms may vary in length, with some maturing at 60 months, 72 months or 84 months.

Car loans with a high APR may cause consumers to pay a long-term premium above and beyond the actual sales price of the vehicle.

How to Monitor and Keep Track of Credit Scores

There are a number of ways you can check your credit score, including through your credit company or another financial institution where you have an account, as well as through a credit service or credit scoring website. Contrary to what you may expect, your credit report does not include your credit score, though it does provide valuable information about your credit history and debts, which is why it can still be helpful to read over your credit report before making a major purchase like a car.

Credit scores can fluctuate over time depending upon financial circumstances, and credit score updates occur at least every 45 days. That’s why it’s important to take a look at where your score stands right before you begin the process of car shopping.

Also keep in mind that it’s common for credit inquiries to occur when you’re shopping around to see what auto loan terms you qualify for. While soft inquiries don’t affect your credit score, hard inquiries, such as those that happen when you’re comparing rates for an auto loan, can ding your score. However, most major credit scores will count multiple car loan inquiries made within a certain period of time — typically 14 days — as one inquiry.

What’s Expected in 2022?

Based on the trends outlined in Experian’s Q2 report for 2021, prime borrowers with good credit in 2022 may continue shifting away from used vehicles in favor of new vehicles. Experian’s research also shows that subprime financing remains at near-record lows, with just a fraction of car loans in 2021 going to consumers in the deep subprime risk category. These trends could continue into 2022.

The Takeaway

While it is possible to buy a vehicle with bad credit in 2021, consumers in the subprime or deep subprime risk categories may want to explore ways of improving their credit scores to help secure financing with more favorable terms. As far as what credit score you need to buy a car, any score is potentially sufficient for obtaining financing.

If you want to check your credit or work to improve your score before buying a car, SoFi Relay is a user-friendly app that allows you to easily monitor and keep track of your credit score.

Stay on top of your credit score with weekly updates.

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
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.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
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When to Count Your Home Equity as Part of Your Net Worth

When to Count Your Home Equity as Part of Your Net Worth

Your home may be your largest asset, but should you include it in your net worth calculations? In some situations, it’s a good idea, and in others, not so much.

Some say you should list all assets as part of your net worth, including your home. Others contend that you have to live somewhere, and any money you have tied up in your home is essentially earmarked for that purpose.

Generally, though, when using tools to tap your home equity, you may want to include your house as part of your net worth. But when calculating retirement savings, it’s a no-go.

How to Calculate Net Worth

At its most basic, net worth is everything you own minus everything you owe.

To calculate your net worth, tally the value of all or your assets, including bank accounts, investments, and perhaps the value of your home or vacation home. Then subtract all or your debts, including any mortgage, student loans, car loans, and credit card balances.

If the resulting figure is negative, it means that your debts outweigh your assets. If positive, the opposite is true.

There is no one net worth figure that everyone should be aiming for. Your net worth, though, can be a personal benchmark against which you can measure your financial progress.

For example, if your net worth continues to move into negative territory, you know that it is time to tackle debts. Hopefully, you’ll see your net worth grow, which can give you some idea that your savings plan is working or your assets are increasing in value.

Your home may, strangely, function as both an asset and a liability. Your home equity—the part of the home you actually own—can be an asset. But your lender may still own part of your home. In that case, mortgage debt is a liability.

As you track your home value and other assets to take your financial pulse, you may find that your home is simultaneously your biggest asset and biggest liability.

When to Include Your Home in Net Worth

Generally speaking, you may want to include your home as part of your total assets and net worth when you want to leverage the value of the equity you have stored there.

You can tap the equity in your home with a number of financial products. Here’s a look:

Home Equity Loan

A home equity loan allows you to borrow money that is secured by your home. You may be able to borrow up to 85% of the equity you have built up. For example, if you have $100,000 in home equity, you may have access to an $85,000 loan.

The actual amount you are offered will also be based on factors such as income, credit score, and the home’s market value.

You repay the lump-sum loan with fixed monthly payments over a fixed term.

As with home improvement loans, which are personal loans not secured by the property, you can use a home equity loan to pay for home renovations.

Or you can use a home equity loan for goals unrelated to your house, like paying for a child’s college education or consolidating higher-interest debt.

Just remember that if you fail to repay the loan, the lender can foreclose on your home to recoup its money.

Home Equity Line of Credit

A home equity line of credit (HELOC) is not a loan but rather a revolving line of credit. You may be able to open a credit line for up to 85% of your home equity.

You can borrow as much as you need from your HELOC at any time. Accounts will often have checks or credit cards you can use to take out money. You make payments based on the amount you actually borrow, and you cannot exceed your credit limit.

HELOCs use your home as collateral. If you make late payments or fail to pay at all, your lender may seize your home.

Traditional Refinance

A traditional mortgage refinance replaces your old mortgage with a new loan. People typically choose this path to lower their interest rate or monthly payments.

They may also want to pay off their mortgage faster by changing their 30-year mortgage to a 15-year mortgage, for example, reducing the amount of interest they pay over the life of the loan.

How do net worth and home equity come into play? One important metric lenders use when deciding whether you qualify for a mortgage refinance is your loan-to-value ratio (LTV), how much you owe on your current mortgage divided by the value of your home.

The more equity you have built in your home, the lower your LTV, which can help you secure a refinanced loan and influences the rate of the loan.

Cash-Out Refinance

A cash-out refinance replaces your mortgage with a new loan for more than the amount of money you still owe on your house.

The difference between what you owe and the new loan amount is given to you in cash, which you can use to pursue a number of financial needs like paying off debt or making home renovations.

Your cash-out amount will typically be limited to 80% to 90% of your home equity, and interest rates are typically a little bit higher thanks to the higher loan amount.

Recommended: Cash-Out Refinance vs HELOC (Home Equity Line of Credit)

Reverse Mortgage

A home equity conversion mortgage, the most common kind of reverse mortgage, allows homeowners 62 and older to take out a loan secured by their home.

Borrowers do not make monthly payments. Interest and fees are added to the loan each month, and the loan is repaid when the homeowner no longer lives there, usually when the homeowner sells the house or dies, at which point the loan must be paid off by the person’s estate.

When Not to Include Your Home in Net Worth

There are a few instances when it doesn’t make sense to include your home in your net worth, or you aren’t allowed to.

Retirement Savings

If you’re using your net worth to get a sense of your retirement savings, it may not make sense to include your home, especially if you plan to live there when you retire.

Your retirement savings represent potential income you will draw on to cover your living expenses. Your home does not produce a stream of income on its own, unless you tap your equity using one of the methods above.

Applying for Student Aid

A family’s net worth can have an impact on eligibility for federal student aid. The more assets a family has, the more that need-based aid may be reduced.

However, the equity in a family’s primary residence is a nonreportable asset on the Free Application for Federal Student Aid (FAFSA®). Most colleges use only the FAFSA to decide aid.

Several hundred colleges, usually selective private ones, use a form called the CSS Profile, which does ask applicants to report home equity, though a number of schools, such as Stanford, Harvard, Princeton, and MIT, have moved to exclude home equity from their considerations for aid.

When Becoming an Accredited Investor

An accredited investor may participate in certain securities offerings that the average investor may not, such as private equity or hedge funds. Accredited investors are seen to be financially sophisticated enough, or wealthy enough, to shoulder the risk involved with such investments.

To become an accredited investor, you must have earned more than $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years, or you have a net worth over $1 million. However, you cannot include the value of your primary residence in your net worth.

The Takeaway

Whether or not you include your home in your net worth will depend largely on what you’re trying to accomplish. If you plan to tap your equity, then it is an important figure to include. But it’s not always included when it comes to things like student aid or retirement income.

While your mind is on home equity, maybe you’ve thought about a cash-out refinance, or maybe it’s time to sell and buy anew.

If you’re curious about a home loan or mortgage refinance, see what SoFi offers.

It takes two minutes to check your rate.

Photo credit: iStock/Chainarong Prasertthai


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SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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