Some saving strategies

Life looks very difficult without savings. Its importance has grown manifold in this era of rising prices and uncertainties. You will need it the most when you are left with no job or business, health uncertainties and even after retirement.A good saving makes the future more secured.

Pay off high cost debt
Paying off high interest rate debt faster and sooner will help you to save more interest which would have been otherwise taken by some lender. Generally interest keeps on accumulating to grow into a large sum thereby forcing you to file bankruptcy. Paying high interest rate funds first will help you to narrow down your expenses and small loans on the other hand can be tackled gradually.

Retirement program
Participating in work related retirement program such as 401(k) helps in increasing the disposable income. With a dollar for dollar match program one could receive greater than 100% return on their investment.



Automatic fund transfer from checking to savings account
One should go ahead and take the advantages of such technology which is now available with banks. A portion of fixed monthly income automatically transfer into savings account there by leaving behind less money to spare and at the same time increases your savings.

Factors in your interest rate

How much you pay for a loan depends on many factors. Understanding such factors helps in saving time and money. Generally bank charges on the amount, period for such a loan and your credit history.

I have mentioned some important factors that accounts for interest rate calculation.


Credit score

Credit reporting agencies collect all information and transaction from your account. They know how many times you have applied for loans, your repayment dates, how you have paid your bills and whether you have filed for bankruptcy. Such agencies pass on such information to bangs and other lenders on basis of which interest rate for your loan is calculated.
A good credit score /credit report helps to borrow funds at a cheaper rate.

Federal Reserve discount rate

This is the interest rate which the federal bank charges from the commercial banks for borrowing funds. This interest rate directly affects the rate at which commercial bank floats the loan in the market. When federal discount rate is high, commercial banks are bound to charge high interest rate from their customers. One cannot do much about it.




Competition from other lenders

Financial institution and banks are there to make profits and are largely governed by the competitive forces among them. If they charge too little they have the chances of getting out of the business on account of low profits. Again, if they charge on higher side, customers may switch to other lending organization.
But you should know, allowing too many potential lenders to run your credit report may hamper your credit scores.
So as a customer you should always seek for selected options and avail the funds from the best and cheapest source


So to avail loans in the best rate you can do two things, look out for more options and try and keep a good credit score by prompt payments of bills etc…

Ways to fix your credit score

Without a good credit score it is impossible to get a loan with low interest rate and even getting other financial products at low cost would become difficult. The best alternative is to look out for increasing the credit scores that would help you in raising your credit rating.

Use automated payment/alert system

Delaying the payments or even skipping hampers the credit scores to a very large extent.
So the first step to fix the credit score is to avoid misplacing the bills by using electronic billing whenever possible. One can set up automated payment so that late payments can be avoided.

Mention your Circumstances to creditors

If you have missed your payments as a result of illness, job loss or other unavoidable circumstances, you can attach a note stating such reasons to your creditor. It can help in acceptance especially when your credit history shows that you have started paying again when circumstances improved.




Pay your debt
If your available credit limit has reached to its maximum limit, you should work fast to reduce it instead of letting things to worsen even more. Creditors judge you on your debt-credit ratio and if you keep it mounting you are only hurting your chances of getting a loan. Frequent payment always helps the cause.


Check for identity thefts
You can frequently check your credit scores to see that your credit information is not being manipulated. Checking credit information will not hamper your credit ratings.
Identity thefts and credit card hacking has become quite common that would only result in abnormal balances and worst credit scores. Track all your dealings through credit card so that you can limit the unauthorized use of your credit card before hand.