Having a good credit score can provide you with a lot of benefits—we hear that all the time. Did you know, though, that it may also help you with your nursing career?
We didn’t either. So we went to April Brissette, Chief Credit Officer of Bankers Healthcare Group. She took time to explain how good credit can influence your career and how to make sure that you have it (or fix it if you don’t).
Please explain why having a good credit score can boost your nursing career. Can it help you get a better job? Do employers now look at credit scores before hiring or promoting?
A lot of employers do background checks, particularly those hiring for professional level positions, and your credit score can be part of the background check. No one can pull your credit without your permission, but that is often in the fine print of the background check you sign off on. Of course, you can decline a background check if you’re concerned about your credit score, but that might be a red flag to the employer.
Your credit score can be viewed as a reflection of your character. Someone with good credit illustrates being trustworthy and responsible; someone with poor credit can paint a very different picture. If an employer sees that you have public records (for example, bankruptcy or tax lien) or you’re past due on accounts, it can tell a story about your financial history.
For temporary positions, like a traveling nurse, background research has a tendency to go up. Why? Because when you’ve had numerous employers for a short period of time, they may not be viewed as strong references.
As a representation of your financial health, your credit score can open or close a lot of doors—not just for financing approvals, but for even getting a job.
How can a nurse find out what his/her credit score is?
Sign up for CreditKarma.com—it’s a free app/website where you can access your credit score as many times as you want, and you pay absolutely nothing. (Advertisers use the site to market to people, which is why it’s free.)
It’s incredibly important to know your score; it’s a laborious process to get things removed, so you’re better off being informed about what your report says. Check it regularly. When you’re doing a self-inquiry—checking your score yourself, also known as a soft pull—it does not impact your score, and nobody will know your credit is being looked at.
CreditKarma alerts you about anything that affects your score and gives you recommendations on how to improve it, as well as approval odds for different financing options, tailored specifically to you.
Suppose nurses don’t have good credit scores? What can they go about doing to raise them?
The best way is to keep your accounts current: Pay everything on time.
Reduce or eliminate the amount of inquiries you have. Only have your credit hard pulled if it’s absolutely necessary. For example, when buying a car, you don’t want to have three dealers pull your credit—because dealers then send it to their banks and before you know it, a ton of people have accessed it and then your score drops.
Keep your revolving availability at least 50%, ideally 75%. Let’s say your available limit on your credit cards is $10,000 total; you want to ideally keep your balance at $2,500 or less, but never past $5,000. The lower your availability, the more your score goes down, and that can be an indication that you’re struggling, from a lender’s perspective.
It takes time to improve your score. The most derogatory credit items can remain on your report for 7 to 10 years. They will have the largest impact on your score when they first appear. Over time, the impact it has on your report decreases. If you’re coming back from a terrible life event, you just have to take time to work toward improving it—but it’s important to use that time to get your score back up by doing everything right.
Ask to be added as an authorized user/signer—perhaps a parent or spouse can add you to use their credit card or to just have you added to the account. It doesn’t make you the authorized payer, but it goes onto your credit report and history. Just be warned that if the actual signer is late, it will also affect your score.
What are some tips to create a good credit score?
The number-one common mistake that young professionals make is opening a ton of credit card and store card accounts. This increases the number of inquiries and hits your credit score. They think it’s helping build their credit because creditors want to give them a card, but it won’t help get your score up. Ideally, you should limit your inquiries to 1 to 2 times a year. Every six months, try to establish credit with an institution—a credit card, auto loan, etc. And remember, make all of your payments on time and don’t go over 50% of your limit.
Pay off your balances in full on your credit card every month if you can. There’s a misnomer that if you don’t carry a balance, it won’t help your score—but it’s actually the opposite. Pay off in full if you can.
Don’t over-borrow. There are a lot of lenders that will give you more than you should borrow. Be smart, and don’t borrow something if you can afford to make the full monthly payment comfortably.
What are some things that nurses absolutely should do or shouldn’t do with their finances to keep a good credit score?
Do not pay anything late, no matter what it is.
If you can make even the minimum payment, do it, because if something is late, it’ll show up on your credit report. Credit cards should be used as a tool rather than a crutch. Use them to get your rewards or in an emergency situation.
Put everything on autopayments. This is a great way to make sure your payments are never late. It’s a great safety net; it won’t get your balance down unless you schedule to pay it off in full, but it can reduce the stress in that you never have to worry about incurring a late fee. A lot of lenders will offer you a discounted rate if you set up auto-payments—just ask.
Do not co-sign for someone else. In our experience, what we see is a lot of borrowers will co-sign for their children for auto-loan/school loan, and their child doesn’t make the payment—then their credit score can suffer. There is a misunderstanding that as a co-signer, not the main borrower, you’re less of a risk or free from it, but it’s not true.
Should they see a financial advisor for help? If so, what should they look for in one?
I don’t think it ever hurts. Seeing a financial advisor might not do anything for your credit, but they can help you take control of your finances.
Do your research—choose someone who is a certified financial planner. The credentials prove they’re educated and certified.
Is there anything that you think is important for readers to know?
You wouldn’t want to miss out on the perfect career opportunity because you haven’t protected your financial health.
When you’re a nursing student, thinking about your finances seems almost like a pointless task. With the immediacy of paying for school and the almost universal need for student loans that you pay back after graduation, thoughts of your future financial plans stay where they are – way in the future.
Believe it or not, this is actually a great time to think about your future and your finances, which includes retirement but also might include big-ticket things like a car, a house, travel, or additional educational costs. When you start working right after graduation, you’ll want to develop good financial habits right from the outset. If you can begin planning for your future early, you’ll be much better prepared.
You may not be able to set aside money when you’re still taking courses and during clinicals, but you can learn how to make good financial choices.
Set a Budget
As a nursing student, get comfortable with the funds you have, the funds you earn, and the amounts you owe. Don’t guess at how much your food costs are each month—add them up so you know. Use an online budget app like Mint (it’s free!) to calculate that in with your rent or mortgage, any insurance costs, student loan payments, transportation, and costs for entertainment, pets, or clothes.
Balance that with what you take home each month and you’ll get a good idea of your cash flow. If you get comfortable doing that early on, you’ll have an easier time making sure you make solid, financially stable decisions in the future.
Learn Where to Save
When you have a budget, you’ll know what you have and don’t have. You can figure out if you can cut back on one thing to make some extra money for something you want. Eliminating a take-out lunch once a week and you can easily save another $50 to $70 a month. Add that to an emergency fund until you have enough to cover three to six months of expenses. Then start putting it in a retirement fund. You’ll never notice the difference.
Pay Your Loans
This one is simple, but can be difficult. If you have student loans pay them on time every single time they are due. Defaulting on your student loans or being late on payments can wreak havoc with your credit score. And you’ll need good credit to secure a car loan, a loan for a home, or even future student loans if you return to school. Don’t let a mistake limit your life that much.
Plan Your Next Steps
Set some financial goals. Do you want to save $1,000 this year? Do you want to commit to saving 15 percent of your income? Figure out how much that breaks down to save each week and then do that. Either have it automatically withdrawn and placed in a different account or fund or do it yourself each payday. Setting concrete goals complete with amounts and the steps you have to take to reach your goal is half the battle.
Start implementing steps toward setting good financial behaviors now and you’ll be thankful years down the road.
The weather is finally warming up and you may be dreaming about your vacation this summer. Travel doesn’t have to break the bank. If you’re looking for ways to save on your vacation, consider these four tips.
Drive
Airfare is continuing to rise. The average roundtrip domestic airfare, including taxes, in 2013 was $363. If you’re single, that may not sound like a lot. But if you are a family of four, airfare alone could cost you $1,452. To save money, consider driving instead (if you have a reliable car or van). You’ll also see a lot more along the way.
Stay Close to Home
When the economy sank in 2008, the term “staycations” became popular. It may not sound too exciting to stay in your hometown or region for a vacation, but if you’re open-minded, there are probably lots of fun activities that you’ve never done because everyday life gets in the way. Look for museums, wineries, festivals, amusement parks, concerts, art fairs, etc. Consider it a challenge to plan and enjoy an entire week off in your own neck of the woods. You may discover a whole new appreciation for your hometown.
Earn Rewards
Do you use a cash back credit card or mileage card? If not, you should consider one for the rewards. If you are a responsible spender, and not in credit card debt, these cards offer discounts and miles toward your summer adventure. Research reward card options on CreditCards.com. If you enjoy flexibility, consider a cash back card. You’ll earn a percentage (usually 1%) back for every dollar you spend. Most cash back cards also offer special promotions during certain months such as 5% cash back at restaurants. Over time you could cash in your cash back bonus on travel expenses.
Double Up
Another great money saver for travelers is sharing lodging expenses with a fellow traveler or even another family. Grab a friend for a weekend getaway and slash your hotel room fees in half by sharing a double room. Or, organize a family weekend at the lake with another family and rent a vacation home for a week and split the cost. A short weekend trip is a good way to see if you enjoy traveling with others. If you find that you do, you can plan a longer trip together in the future.
Denene Brox is a Kansas City-based freelance writer.
Image credit: Darren Robertson/freedigitalphotos.net
It’s an unpleasant reality that in our current economy many workers experience being laid off – and that unfortunately includes nurses.
Being laid off can be overwhelming and the first thing you probably worry about is how you will cope financially on less income. There are some strategies that laid off nurses can use to cut expenses and the stress of a lay-off. While you’re looking for your next nursing position, follow these practical budgeting tips from Tiffany “The Budgetnista” Aliche, author of The One Week Budget: Learn How to Create Your Money Management System in 7 Days or Less.
If you haven’t been laid off, but feel there is a threat, follow Aliche’s four step plan:
Step 1: Begin preparing now by cutting back. Now is the time to drastically reduce your spending. Put the money you save toward your emergency account.
Step 2: Pay-down credit card debt and store debt. Credit card debt it very expensive, but even more expensive is store debt. Pay off any purchases you have first. You don’t want to lose items due to lack of payment. After that, work on your credit card debt. You might need the limits as an additional back-up.
Step 3: Consider opening a new “emergency credit card,” while your credit score is still (hopefully), decent.
Step 4: Update your resume and let friends and family know you’re looking for a new job.
If you’ve been laid off, cut these non-essential “extra” expenses:
Cable (immediately)
Cell phone bill: Get your usage assessed. You may qualify for a simpler plan that costs less
Dry cleaning: Try Dryel, an at home dry cleaning product
Eating out
Grooming: Do your own touch-ups between salon visits
If you have been laid off, be sure to:
Reach out to your service providers and put them on notice (car insurance, loans, mortgage, utilities, etc.). Ask what kind of help they provide for clients experiencing financial hardship.
STOP spending on non-essential items. If it’s not absolute need, don’t buy it.
Finally, Aliche says, “you have to start living at your financial baseline. That the lowest possible budget your life will allow; a no-frills life. Every penny spent has to be done so wisely, because there is no guarantee it will be replaced anytime soon.”
For more savvy budgeting tips, visit The Budgetnista website.
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