Tips for Keeping Your Financial Resolutions

Joseph Huml, Vice President/Retail Regional Manager huml_portrait

Whether you are among the 41 percent of Americans who typically head into the new year equipped with a list of resolutions or are among those who just want to get your finances in shape, knowing how to move the dial from intent to progress can be tough.[1]

Here are some tips to help you succeed in boosting your financial health in 2017.

  1. Conduct a credit cleanup. Sometimes it helps to clear the slate by consolidating high-interest debt into lower rate loans. Homeowners, in particular, often find financial relief—along with financing for home repairs or unexpected expenses—by using a home equity line of credit (HELOC). Not only is the interest rate on this type of debt more affordable than other types of personal loans, the interest you pay may also be tax deductible.
  1. Join the club. To avoid feeling overextended by holiday spending next January, open a Club Savings Account this January. Arrange to have a small amount ($10–$25) transferred from your checking account with each paycheck. In late November, the accumulated amount will be transferred back into your checking account just in time for you to start shopping for the 2017 holiday season.
  1. Get more than credit. Compare the rates and rewards you receive on your current credit card to see if there are more attractive deals out there. Also, with many issuers offering attractive introductory rates for new accounts, moving your outstanding balances could potentially save you money.
  1. Up your reserve. While having an emergency reserve equal to at least three months of your regular expenses is advisable, it can be hard to achieve. A more attainable goal is to try to build up your emergency reserve gradually. For instance, consider setting up an automatic deposit for a modest amount from each paycheck that will allow you to end up with an additional month’s worth of emergency reserve by year-end.
  1. Experiment with bursts of retirement savings. While it’s hard to hit the maximum contribution limit to your retirement savings account each month, try raising your contribution during the three months a year when your expenses are lighter. These short bursts can add up over time.
  1. Get a second opinion. Take advantage of free investment consultations when they are available. Sometimes, a banker can see a better way to save on fees or interest expenses and may be able to provide insights into ways of allocating your investments for expected market changes.
  1. Improve your score. Review your credit reports and scores at least annually. Since your score influences the interest rates you pay—and even employers and landlords look at them—it’s beneficial to make sure yours is as high as possible. When you review your credit reports, look for any errors or omissions. Pay attention to the timeliness of the payments you do make. Late payments and skipped payments are the biggest detractors to your score.

For more information on how we can help you keep up your resolve to improve your finances this year, visit us here or call 1-877-866-0202. We can’t wait to talk to you about what we can do to help you make this your best financial year yet.

Scoring Credit: Play It Smart

Jackie Allison, First Vice President, Retail Services 

Jackie Allison, First Vice President, Retail ServicesWhether you are requesting credit in the form of a credit card, car loan, or a home mortgage, it literally pays to have a winning credit score. The higher your score, the less you will pay over the life of the loan.

Who’s Keeping Score?
There are three main credit reporting bureaus:

  • Experian
  • Equifax
  • TransUnion

Each collects information in a report that summarizes your financial history. The bureaus use this information to calculate your credit score. Those scores are used by potential lenders to see if you are a “good credit risk,” someone who will likely pay back what they borrow, as agreed.

What Affects a Score?
While each bureau uses a different formula, they look at the same factors:

  • Whether you pay your bills on time. A late payment once in a while may not be damaging, but a pattern of late or missed payments is.
  • The amount you have outstanding each month as a percentage of your available credit. A high percent outstanding actually can lower your score.
  • The number of new credit applications you’ve submitted recently. This can signal a concern to the potential lender that you are acquiring too much new debt too quickly.
  • Payment history. If you have been late on a payment, get the account current and stay current. This will help improve your credit score.
  • The extent of your borrowing history. To have a credit score, you need to have had credit and demonstrated you can repay it. A good way to start building your history may be to have a parent co-sign on a loan application when you start working or, if you are able to do so, apply for a CD-secured loan at OSNB.

Before you apply for credit, take a look at your reports. You may request a free report once every 12 months from each bureau. To request your free reports, visit AnnualCreditReport.com.

Question any inaccurate information. And, if you are a joint borrower, exchange reports before applying. It may make more sense for the person with the higher score to apply for the loan on their own to lower its overall cost to you both.

If you do have a low score or a limited credit history, talk to us. Your banker can make suggestions that may help you raise it and lower your future borrowing costs. Because when it comes to your credit score, it’s never too late to improve it. For additional information, visit the FDIC’s consumer protection page.