Washington County Weekend Post

Credit is defined as a customer obtaining services or products before payment with the trust that payment will be made in the future. Credit affords people pur- chasing power they would not have if they had to pay for something outright at the time of checkout. In addi- tion, credit enables men and women to finance expensive automobiles, buy homes or furnish those homes, con- tributing much to the foun- dation of a strong economy. A strong credit history and score is vital to personal finance. The steps people take concerning their finances can greatly affect their credit. Identifying the behaviors that may be detri- mental and those that are beneficial can help cus- tomers reevaluate their habits and improve their creditworthiness in the eyes of lenders. Payment history The financial advisement resource Credit Karma says one of the most important factors affecting credit scoring is payment history. Having a long history of making payments on time is essential for a strong credit score. Missed payments and a reputation for paying late can drive ratings down. It can take some time to recover from late payments. Failure to recognize late or missed payments may result in bankruptcy or tax liens, which are a heavy black- mark on credit. Credit utilization rate Credit utilization refers to the amount of credit you have available, based on credit card limits, compared to the amount of credit you're actually using by way of the balances on credit cards, advises the credit tracking company Experian. Lenders prefer to see ratios of around 30 percent or less. To calculate credit utiliza- tion rate, divide your credit card balance by your credit limit. So if your balance is $600 and your limit is $1000, that's a utilization rate of 60 percent. Number of accounts The number of open accounts you have affects your credit score. Scoring models often look back and consider how many accounts are open and if there are any outstanding balances. Length of credit history The length of your credit history is another factor that affects your score, according to Investopedia. Credit scor- ing takes into account the age of your oldest account, if you've used that account recently, as well as the aver- age age of all your accounts, including the newest. Closed accounts can stay on your credit report for up to 10 years, but when an account closes, this will affect your credit history average. Cred- it scoring rubrics will deter- mine just how the ratio of new to old accounts and fre- quency of use will impact your score. Credit scores are impor- tant. Understanding them further can help people secure their financial futures. 2A • WASHINGTON COUNTY POST • SUNDAY, APRIL 26, 2020 GMTODAY.COM Sundays, April 12 - May 3 in the Washington County Post. Tuesdays & Thursdays, April 14 - May 7 in the Daily News. (BPT) – When you made your resolutions at the start of the year, was saving money one of them? How's that going? According to the third annual "State of Savings in America" survey by Pure- Point Financial, a digital bank and division of MUFG Union Bank, half of Ameri- cans believe creating a sav- ings plan is an important goal - but nearly a third think it's more likely they'll achieve their "dream body" in 2020 than reach an annual savings goal. And 51 percent think they're more likely to travel to an exciting new place than achieve their sav- ings goal this year. While 84 percent of Americans said they were saving for something, only two in five felt confident about their money-saving habits - regardless of their age. What are the most effec- tive strategies when it comes to saving money? Here are some tips: Establish a goal Saving money is always easier with a concrete goal in mind. From there, you can devise a plan to reach that goal. You may want to create a vision board or other visu- al tool to help keep you inspired and motivated to stick to your plan. Savings goals could include: • Creating an emergency fund - aim for three to six months' worth of expenses • Paying down a debt • Saving for an important purchase or investment, such as a household appli- ance or down payment on a car or house • A special vacation Set it and forget it If you're going to save your hard-earned money, you'll want an account that works hard for you, too. Begin saving immediately by setting up monthly automat- ic transfers into a savings account that offers a compet- itive rate. For example, if you begin setting aside just $20 each week, you'll have $1,040 (plus interest) saved within one year. Automatic savings deposits help create positive habits for your future suc- cess - and if it's automatic, you won't have to think about it. Talk it out According to the new sur- vey, over 20 percent of Amer- icans would rather talk to their best friends about an embarrassing health issue than the status of their sav- ings account. Nearly three in 10 who considered them- selves bad at saving reported they hide the fact that they have little to no savings from friends because they feel ashamed. While it can be hard to talk about your finances, chances are your friends and/or family may be in a similar situation. By open- ing up a dialogue about financial goals and chal- lenges with others, you may learn new tips and tricks to spend less and save more - which will help you stick to your plan. Having a buddy to keep you on track can also be very motivating. Compare rates and shop around Make sure that you're comparing available savings rates and getting the best possible rate for you. If you're not getting at least 1 percent on your account, you're leaving money on the table - so it's time to start shopping around. Save what you can Just getting in the regu- lar habit of saving is key to improving your financial confidence. Try to save at least 10 percent of your income if you can. However, any amount is a good place to start. What's important is that you build the habit of saving now. Eliminate money drains Just as older generations used to pay for magazine and newspaper subscriptions they never read, paying for today's streaming services and other online subscrip- tions you don't use can drain money you could be putting into savings instead. According to the survey, one in three Americans do not regularly review their subscription services to keep track of how much they're spending - and it's very easy to lose track. Take a good look at your monthly bills, reviewing automatic pay- ments to find subscriptions you may not be using. Once you've cancelled any sub- scriptions you're not enjoy- ing, total up what you were paying and set up monthly automatic withdrawals for that amount into your sav- ings account instead. Celebrate America Saves Week by coming up with your own financial goal. To start saving today, begin by looking for the best rate for your account. Visit Pure- Point.com to learn more about your options. Save smarter: Tips to get your 20/20 financial vision in 2020 What affects your credit score?

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