OpenSky®, known for providing tools and resources to help consumers build credit, offers some suggestions and tips on how to put tax refunds to good use:
1. Pay down or pay off credit card or loan debtUsing a windfall like a tax refund to pay down debt is a great way to fix up your finances – you’ll not only save on the amount of interest paid out but also can improve your credit, since reducing the ratio of debt-to-credit positively impacts credit.
2. Open an emergency savings accountLife happens. Having money put aside for emergencies, such as car repairs or medical bills, could save you a big headache. Without savings, an unexpected cost could create future debt.
3. Make home repairsHome maintenance goes under the category of preventing future debt – making necessary repairs and upgrades is a good use of tax refund dollars. Protecting your investment pays off in the long run, when the house sells for top dollar.
4. Build or rebuild creditFor those people starting out post-school, or starting over after a life upheaval, a tax refund can be a down payment toward better financial health. Using tax refund money as a security deposit to get a credit card, such as the OpenSky Secured Visa® Credit Card, allows you to begin building a credit history as soon as you start using the card.
Taxpayers have until Monday, April 18, this year to file their 2015 tax returns and pay any tax due. But don’t wait until the last minute. The sooner you file your return, the sooner you’ll get your refund if you’re due one – and the sooner that money can be put to good use.