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Credit Report
To get a glimpse of your financial future, many businesses look at your past. Your financial history is contained in your credit report, which can determine everything from whether you qualify for a loan and the rate you'll pay on that loan to your prospects for renting an apartment or obtaining car insurance. A strong credit report is key to building and managing your finances.
Building Credit
Understanding what credit is and how your credit score can be improved is a crucial step toward reaching your financial goals. Your credit score is a measure of factors that may affect your ability to repay credit. It's a complex formula that takes into account how you've repaid previous loans, any outstanding debt, and other financial history.
Credit Scores
When you apply for credit, lenders determine your credit risk by examining your credit scores, also known as FICO® scores. Each of the three main credit bureaus — Experian, TransUnion, and Equifax — keeps credit information about you that is used to calculate your FICO scores. This includes your payment history, the amount of money you owe, the length of your credit history and the number of recently opened credit accounts.
Mobile Banking
We’re living in an increasingly mobile world, with Wi-Fi available almost anywhere, anytime. It’s no surprise that just about every bank now offers mobile banking capabilities through countless banking account management and monitoring apps. In fact, 52 percent of smartphone owners with bank accounts use mobile banking, according to a survey done by the Federal Reserve in 2015.
Electronic Banking
Technology is evolving faster than ever, and as banking and money management becomes increasingly electronic, it's important to understand new capabilities – not only for convenience, but also for security. Electronic banking, which is also known as electronic fund transfer (EFT), refers to the transfer of funds from one account to another through electronic methods. A 2015 study by the Federal Reserve found that 22 percent of mobile phone owners use mobile payments. As electronic banking becomes increasingly widespread, you'll likely encounter instances where it's preferable to make payments or transfer money electronically.
Opening a Checking Account
Do you track your purchases? It may be a bit alarming to see how much they add up to, but it's an important habit to develop. With a checking account, you have an official record of every purchase you make using funds from that account, as well as money you receive and deposit. That can come in handy when you're creating a budget, preparing for taxes, or need proof of payment. Each month you'll get a statement that tallies every purchase you've made.
Financial Institution Basics
Just like any other business, a financial service provider sells products to earn money so that it can run its operations and provide services. To understand how financial service providers operate, know that when you deposit money with them, it gets pooled into a shared fund along with everyone else's.
Spending Within Your Means
Spending within your means may sound like a simple rule to follow, but many Americans spend more than they save, which can result in debt. The good news is that it’s completely avoidable, and it’s reversible over time. With a little planning, tracking and adjusting your spending, you can live happily within your means.