Expecting a Tax Refund

Expecting a Tax Refund? Filing Early Could Help Your Credit Score

There are plenty of reasons to file your federal income tax return early. For example, early filing can help prevent identity theft losses. Here’s another: If you’re owed a refund, it could enable you to improve your credit score. Several factors determine credit scores, including “credit utilization,” or the amount you owe creditors relative to your available credit. You can lower your credit utilization percentage and potentially boost your credit score by using any IRS refund to pay down consumer debt. However, it usually takes at least a month or two for credit reports to reflect recent debt payments. So if you anticipate a refund and have debt to pay down, don’t wait to file!