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Just like the stores had Easter candy out before Valentine’s Day was over, tax time is coming soon. April 15 – or 17 – thanks to that oh-so-generous government extension that was granted for the filing of 2011 returns – is only a couple months away.

For many families, tax time is not as painful as it could have been, since last minute measures were enacted to protect some tax credits that may put money in your pocket. But before you get too excited about how to spend that money, we’d like to suggest doing something painfully responsible with your tax return.

We know, the dream vacation or the new car would be a lot more fun.

But a good tax return can really help to turn a bad credit score into a good one, and taking advantage of tax time in such a practical way doesn’t mean you have to give up your dream – just postpone it for a year. You’ll not only improve your credit score, but what financing you do get the next year will cost you less because of it. And really, given how quickly tax time comes each year, the time will fly by.

Depending on the size of your return, you can either pay off some smaller credit card balances completely or you may want to pay off enough on the balance of each of your credit cards to make sure they are each at less than 50% of the limit available. There is no one measure more critical to your credit score than keeping at least 50% of the credit line free.

In the short term, your tax return might by you some fun, but in the long term, if you put it to work for you by putting the return toward your credit card balances, it can significantly change your financial future. Better credit scores mean lower interest rates, better auto insurance rates, and better refinancing options for your home. Better credit ratings can even mean getting that job versus being overlooked (except in California, where it is now illegal to use credit scores in making hiring decisions).

This tax season, invest in yourself and your financial future. And next year, you can send us a postcard from Europe as you enjoy your dream vacation that is costing you less thanks to better credit!

(1)  Lose fifteen pounds

(2)  Drink less coffee

(3)  Spend more time with the kids

(4)  Finally buy a new car

Sound familiar? Yeah, those were our new year’s resolutions too.

Much has been said in the news lately about the average age of cars owned in the United States reaching an all-time high of almost eleven years old. While cars may be more durable and resilient that ever before, many of us want, or desperately need, a new car. Unfortunately, our credit score or errors on credit reports may be keeping us from realizing this dream.

Cleaning up those credit reports to help people achieve their resolutions of owning shiny new cars (or other dreams) makes the first quarter of each new year a blissfully busy time at Ovation.

It usually takes 6 to 8 months of dedicated work to navigate the cumbersome but time-tested dispute process with the three major credit bureaus and clear blemishes and mistakes from the credit reports of our clients. So if we start working on that new year’s resolution now, many clients will smell that new car smell by September – still plenty of time to fulfill that resolution (we don’t make any promises about the 15 pounds).

Coupling credit repair with a healthy tax return will make payments on that new ride more manageable. The tax return will provide the big down payment that will help to lower the principal payments or allow us to reach a little higher up in the automotive echelon. However, whether the down payment is $1,000 or $15,000, the cash down does nothing for the interest rate. It is our credit report and credit score that drives the interest rate, and it significantly affects the monthly payment, especially over a longer-term loan. Better credit means lower interest, leaving more money in your wallet each month for gas to feel the torque of that new engine.

Perhaps it isn’t a car that gets your engine going? Perhaps you are perfectly happy with the dependable subcompact in the driveway. The first quarter of the year is still a great time to get our finances in order, check the three major credit reports for errors, pay things off, and dream of our financial goals for the coming year. This can only help you realize your dreams, whatever they are – practical and pragmatic or romantic and whimsical.

Once the credit reports are tidy, remember to park the new car (or the old clunker) in the garage, slam a cup a green tea, and go on a long walk with the kids.

If you didn’t know any better, you might suspect that credit cards were the insidious invention of a Las Vegas casino conglomerate. Certainly, the odds of “winning” in the game of credit spending are in favor of the “house.”  Getting ahead of credit card debt demands that you get ahead of interest payments in your effort to pay down the principal amount – the amount you actually charged.  While it may seem that every dime in your spending budget is accounted for, preventing you from making larger credit card payments, you can find ways to cut back personal spending. You can indeed spend less day-to-day, ultimately saving you more money in the long run by paying down your monthly credit card debt sooner rather than later.

One of the best ways to curtail your discretionary spending is to examine how often you eat outside the home. Your job may demand a daily quick trip through the doughnut shop or coffee shop drive-through, you may make enough money to afford lunch out each day with your co-workers, and your family schedule may be hectic enough to make pizza delivery or fast food a blessing. These combined expenses, however, dramatically impact your household budget. Some research suggests that half of our food budget is allocated to eating outside the home. You can save money by avoiding the daily latte, the lunch with co-workers, and the fast food hamburgers. Pack lunches and plan meals ahead of time to better manage your time, expenses, and your diet.

As you examine your dining habits, also take a look at your entertainment expenses. Do you need 200 or more stations, or are you paying $50 per month for the privilege of watching your two favorite channels? Consider online websites that often offer free streaming movies and television programming. Alternatively, you can pay a monthly fee that is a fraction of what you might pay your local cable or satellite provider for streaming services like Hulu and Netflix. As well, the expense of renting a movie and making popcorn at home is far less costly than taking the family to a movie theater. Your family evening is also more intimate when sharing a movie at home, and you can avoid twenty minutes of advertising and movie previews.

Other methods of reducing spending include walking or riding a bike instead of driving your vehicle, monitoring your utility use (electricity, water, and heating are often wasted, yet controllable expenses), and cutting back on impulse buying that is often triggered by sales found in department stores (get what you went to the store for, and get out!).  All of these items by themselves might seem trivial, as may the relative cost of a cup of coffee, one food item, or a quick drive to the store. These items calculated collectively, however, represent a significant portion of your budget that would best serve you by being assigned to your monthly credit card payment.