Tips, advice, and the latest news from the savings world.
Some of the best, and most innovative, tips we get come from you the reader. That’s why for your weekly dose of motivation to Kick Start Your Savings we are sharing your tips. Whether it’s from our American Saver newsletter, on our Facebook page, or on our Twitter page, you are always willing to share your tips to help each other out. Keep it up! Together we can start small to save big.
Tips from American Saver
Every payday I would get a roll of quarters ($10) and put it in a jar at home. Now it’s a roll of dollars ($25) every payday to put in a jar that I don’t touch. Every other month, I deposit the rolled coins into a side account that is outside of town. That way I’m less tempted to touch it. - Linda Jones, Virginia
Credit scores affect everything from the interest rates you pay when you borrow money to whether you can rent an apartment or get a job. Obviously then, it is important to know how credit scores work and how high-interest debt can affect your credit score. However, a recent survey by Consumer Federation of America and VantageScore Solutions found that most Americans do not know what a strong score is and do not understand the financial cost of a poor score.
Credit Score Basics
Your credit score is a number lenders use to help them decide how likely it is that they will be repaid on time if they give you a loan or a credit card. This credit score is built on your credit history. The score is based on several factors, including your total debt, the types of accounts you have, the number of late payments you have made, and the age of your accounts.
Having a lower credit score means you will end up paying higher interest rates on all your consumer and mortgage loans. For example, on a $20,000, 60-month auto loan, you can pay up to $5,000 more in interest with a bad score than a good one. A low credit score can also make it harder to rent an apartment, get utility services, and even get a job.