4 Ways to Make Your Tax Refund Work for You in 2017

Tax Return | OneUnited Bank

Congratulations! You just found out you’re getting a tax refund this year.
If you have bad credit, however, the best use of that money is not buying something expensive or lavish. We know – bummer. Instead of spending your refund, use it to help rebuild credit. It doesn’t matter how much you’re getting back, even the smallest amount can be put to good use and can help strengthen your credit score. Here are some ways you can make your 2017 tax refund work for you by using it to rebuild credit.

1. Pay Down Any Collections

If you have any accounts in collections, we always suggest you start there. According to Credit Sesame, “In the newest versions of the FICO and VantageScore credit scores…paying or settling your delinquent debts, specifically those that have been sent to collections, can result in a higher credit score. Both FICO 9 and VantageScore 3.0 exclude collection accounts from score calculations once they’ve been paid off.” So use your tax refund to chip away – or completely pay off – any accounts in collections. Doing so can immediately raise your credit score for an instant win.

2. Bring Down Your Credit Balances

By bringing down the balances on your credit cards, you can start bringing up your credit score. There are multiple strategies you can use to pay off your balances, including starting with the smallest balance or the card with the highest interest rate. Each strategy has its advantages, and it’s really up to you to decide which card should be paid down first. If you’re wondering how much it’s going to take to completely pay off your credit cards, use this calculator to find out.

3. Invest in Yourself

Investing the money is another great way to use your refund to help you build your credit. Place it in a high-interest savings account or high-interest checking account to start building an emergency fund. While building up a savings account won’t immediately affect your credit score, it can help you rely less on credit cards for future purchases.

4. Open a Secured Card

Apply for a secured credit card such as the UNITY Visa Secured Card. A secured card, or second chance credit card, is a card that works like any other credit card but is funded by your own money. It is treated like other credit cards in the eyes of the three credit bureaus, so using it wisely can help you rebuild your credit score.

By using your tax refund to fund your new UNITY Visa Secured Card, you can also take advantage of our How to Rebuild Credit Program. Through working one-on-one with us, you can use your secured Visa card prudently and strategically to raise your credit score.

Don’t worry about not getting approved due to your bad credit. Cards like the UNITY Visa are made to help people with bad credit get out of their current situation and into a better financial position. The minimum deposit we accept is $250, which will equal your credit line.

Getting money back during tax time can mean finally buying that pricey item you’ve been eyeing. But if you have bad credit, using that money to rebuild your credit would be a much better option. Take your tax refund and open your new UNITY Visa Secured Card today.

OneUnited Bank

OneUnited Bank, the nation’s largest Black-owned bank and FDIC insured, understands we have to focus on money and technology to close the racial wealth gap. With your support, by simply opening and actively using a OneUnited Bank account, we will continue to accomplish our mission!

  • Kristen S.
    Great advice! Thanks
    February 22, 2017 Reply
  • Nai
    This is precisely what my husband and I were planning to do! Good to see it's the right move financially.
    February 22, 2017 Reply
    I enjoyed reading about your products you have to offer and look forward to doing business in the near future.
    February 23, 2017 Reply
  • Andrew Miller
    How do i invest in some shares with one united?
    February 25, 2017 Reply
  • Taranika Webb
    I love it... Because that's what so many people do go out and buy pricey items that they don't need I like the fact that you teaching us about putting our taxes dollars to good use instead of spending just because I have it. You know what I'm thinking now maybe more blacks can be approved for loans to buy homes and start black businesses. Thanks taranika webb
    February 28, 2017 Reply
  • Lewis
    Great idea
    April 6, 2018 Reply
  • Victor
    For example, if you receive 4K back in the form of a refund, place that amount in a secured account through a money market, cd or another financial vehicle.of your banking institution. You then have this amount to utilize as you borrow against your "own" money that is in the bank. If payments are at a very moderate rate lets say $200.00 a month. You in turn payback your money less than 2 years. In that time period you would have increased your credit score immediately with the bank loan and have your 4k in the bank as you utilize the 4k you borrowed against. A no brainer win! win! If for some reason you have a hardship repaying the money, your financial institution can rework your note to accomodate..
    April 6, 2018 Reply
  • The PREP Factory
    Low hanging fruit! Great information needs to be shared! We see such a connection with college planning, so we just had to post this on our Facebook page: https://www.facebook.com/thePREPFactory/ We invite you to check out our post.
    April 7, 2018 Reply

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