Resolve to Replace Your Bad Financial Habits

Most people have at least one bad financial habit. Whether it’s impulse shopping, forgetting to pay bills on time or putting off building that emergency fund, balancing what you want to do and what you “should” do is never easy. The new year is the perfect time to identify potential financial weak points and replace bad habits with productive ones.

Start by identifying your bad habits. Sometimes a bad financial habit is easy to identify. For example, there might be a growing stack of bills in the kitchen that you willfully ignore. Others may be subtler, or perhaps they’ve become so ingrained that you do them without thinking twice.

Not sure where to start? Looking through your previous months’ expenses can help you identify expensive trends or one-off purchases that are part of a larger theme. Online or paper bank statements can make this particularly simple. If you have a budget, you likely already compare projected spending with actual spending on a monthly basis, if not, this might be a good time to start.

You might recognize a few of these common bad financial habits in your life:

  • Paying bills after the due date.
  • Paying only the minimum required on bills.
  • Ignoring bills and letting them go to collections.
  • Putting off saving for retirement or for a rainy day.
  • Impulse shopping or “retail therapy.”
  • Not keeping track of how much debt you have.
  • Taking on debt to pay for something you don’t currently need.

Ultimately, all of these lead to spending more than you earn and in some cases, bad habits can have a cascading effect.

Try to figure out what’s driving your behavior. You might need to figure out what triggers your behavior and the reward you perceive afterward before you can change a habit. However, triggers and rewards aren’t always obvious.

For example, you might buy big-ticket items when they’re on sale because you want to feel like you’re accomplishing something by “saving” so much. Perhaps you could foster a similar feeling of accomplishment by investing the money in a tax-deferred retirement account and calculating how much it’ll be worth after years of compound interest.

Aim for these healthy financial habits. What habits should you try to adopt? Budgeting is certainly a worthy activity, but also consider the following mix of behaviors and specific objectives that can help keep your finances in order.

  • Pay bills on time. In addition to avoiding late-payment fees, making on-time payments is one of the most important factors in determining your credit score.
  • Make paying down debt a priority. Rather than accruing interest, make a point to pay down debts as quickly as possible.
  • Build and maintain an emergency fund. Having three to six months’ worth of living expenses in savings can help cushion the blow from a financial or personal setback. You could start with a goal to put $1,000 aside and then build towards the full emergency fund.
  • Save for retirement. You can put aside a percentage of your income for retirement and invest the money within a tax-advantage account, such as a 401(k) or IRA. Find a comfortable contribution amount to start with, and then try to increase it at least once during the year.
  • Plan your large purchases. To help prevent impulse shopping from draining your budget, resolve to wait at least one day before buying anything that costs over $100 (or whatever amount makes sense for your budget). If you know there’s a large purchase coming up, start saving early by setting a little money aside from each paycheck.

You might consider asking others for input during this process. Especially if you’re having trouble identifying a bad habit or finding the motivation to change, sometimes an outside perspective can help.

Bottom line: Make a resolution to replace your bad financial habits with healthy ones this year. Start by identifying the habits you want to change and trying to figure out the trigger and reward that surround the behavior. Then, try to replace that behavior with something positive. After identifying and trying to change your personal financial habits, you might want to consider the financial practices you share with a spouse or significant other.

 

By Nathaniel Sillin

Health and Wealth in One – How to Make Money While Working Out

 

The end of the year is a perennial period of self-reflection, and you may enjoy partaking in setting a few New Year’s resolutions. Unfortunately, you also may (more than once) enthusiastically start a year with shiny optimism only to find yourself falling short a few weeks later. You are not alone.

Resolutions related to finances and health, two important components of everyone’s life, are especially common. Here are a few ways that you could tie physical activities to achieving your financial goals. Hopefully being able to tackle both resolutions at once can help keep you motivated for the entire year.

Compete with yourself, or others. If you’re up for a little friendly competition, consider creating or joining a challenge and putting money on the line.

There’s an online app that you can use to place a wager on how often you’ll work out. At the end of the week, you have to pay your preselected amount for each workout you miss. But if you complete your workouts for the week, you collect a portion of the amount paid out by everyone else.

Some people make an arrangement with a friend where you each agree to work out X times a week and to pay the other person $5 or $10 for each workout missed. Or, you could opt to make a donation to a charity of your friend’s choice rather than pay each other. The goal is to provide accountability, and the financial aspect can add a sense of urgency and be a great motivational tool.

Connect an activity tracker to rewards programs. Several services give you points each time you work out and let you redeem the points for cash, gift cards or other prizes. The real trick is to use multiple programs and maximize your rewards from every workout. Some employers also provide bonus points to employees that use these programs or have similar rewards programs of their own.

Make working out your work. If you’re looking to make a serious lifestyle change, and potentially some serious money, consider becoming a personal trainer or fitness instructor. While the certification process can be expensive and time-consuming, afterward you’ll be able to charge clients for classes or one-on-one training.

Or, you could try to find flexible and active work that suits your interests and experience. Gardener, referee or dog walker could be good fits to supplement your income.

Keep exercise-related expenses down. It can be tempting to buy new workout equipment or sign up for a gym when you’re excited about a New Year’s resolution. However, there are many ways to get fit without expensive equipment or a large gym.

For example, you can find videos of free instructor-led workouts or yoga sequences online or try an app that creates and leads you through workouts. If you want to take up an activity that requires facilities, look for inexpensive options at local community centers.

Raise money for a charity with every step. You may not have a strong desire to earn money but are still looking for a little extra motivation to work out. Similar to the programs that reward you with points, there are apps like Charity Miles that you can use to raise money for your favorite charities while exercising.

You could also sign up for a charity walk, run or ride and know that when you cross the finish line you’ll be helping a good cause.

Bottom line: By keeping costs down and looking for ways to make money while staying active you can make your budget (and body) more flexible. This approach could help you stay motivated for longer, and you can use the extra money to pursue your other goals for the year.

Perhaps you’re trying to save for a down payment or vacation, focused on building your retirement savings or looking to make a significant impact in your community by donating to non-profit organizations. Every extra dollar can bring you one step closer to achieving that goal.

By Nathaniel Sillin

Research Finds Sharp Increase in ‘Whaling’

Whaling is not just another fish story. It’s a real threat. The terms whale phishing and whaling are used to describe a type of attack that targets the “big fish” in a company. However, more often it is when someone impersonates the “big fish” in the company to trick employees into doing something that results in a financial gain to the criminal and loss to the company. A survey conducted by Mimecast, Ltd. of 436 IT experts around the world found that 67% of the respondents saw an increase in fraudulent payment attacks and 43% reported an increase on attacks attempting to get confidential information such as tax or HR information.

Spearphishing is typically how whaling attacks are perpetrated. Someone will send an email pretending to be a CEO or other executive to an employee in the targeted department, such as accounting or HR. Often they will ask for wire transfers, such as what happened to Ubiquiti Networks, resulting in losses to that company of $46.7 million. In the case of Seagate, an employee was tricked into sending income tax data of all employees by posing as the company’s CEO. And a Snapchat employee handed over payroll data to a scammer after being convinced it was a request from that company’s CEO.

Business Email Compromise (BEC) scams such as these are on the rise and according to the FBI have increased 270% since January of 2015. Therefore, it’s important to be aware of them and how not to fall victim.

  • Always confirm with the requester any wire transfers or transfer of sensitive information before taking any action. Do this by making a phone call to him or her, by emailing with a completely new email message (do not hit the reply button), or by walking to the requester’s office or desk. Doing this will take very little time, but could save your organization millions of dollars.
  • If there is not a process in place for multiple approvals for wire transfers, put one in place. The more people that see such requests, the less likely a fraudulent one will occur.
  • Be wary of any email request that seems so urgent that you don’t have time to verify it. If you are made to believe it’s just too urgent to confirm, it should be considered a big red flag that it is a scam.
  • Never give out login credentials to anyone, especially if they are requested in email. Email is usually not a secure form of communication, so anything you send is in plain text for those who wish to steal credentials to easily get.
  • Use caution in what you post on social media and networking websites. Often, the scammers find out whom to target in spear-phishing using sites like LinkedIn.
  • Get training on cyber security or provide training if you have the authority and ability to do so. If you can’t do it yourself, there are many qualified and reputable companies that will provide everything from annual training, to ongoing training and testing on cyber security threats.

Whaling and other types of phishing are not going away any time soon. That’s because they work. No industry is immune and smaller organizations are being targeted more often. So, don’t get complacent and let the phishers hook you, even if you think you are just a small fish.

© Copyright 2016 Stickley on Security

 

Your Quest Diagnostics Lab Results May Be in the Hands of Cyber Criminals

The transition from paper to electronic records in the healthcare industry is both good and bad. It’s easier for all of our care providers to get our information, but it’s also easier for hackers to get that information when it’s stored on databases and can be accessed online or on mobile devices. The latest healthcare related company that is victim of a breach is Quest Diagnostics. This company performs lab tests and diagnostics for one in three adults in this country and half of the physicians and hospitals, according to its website.

On November 26, the company said an unauthorized third party accessed names, dates of birth, and lab results of 34,000 patients. Neither social security numbers nor financial information was included in the accessed data, which was retrieved through what the company said was an improperly secured mobile application. It was created and provided by a company called Care 360 and is called MyQuest. It is used to store and share patient health records electronically.

Quest is sending information via US Mail to those affected by this incident. If you receive a letter, it will be more important than usual for you to review the benefit statements you receive in the mail from your insurance providers. The information on those documents is what gets submitted to them about your healthcare. If anything is incorrect or unclear, contact them to get it clarified.

Healthcare fraud can be very lucrative for cyber criminals. Medical records are more valuable than credit card numbers because they contain a lot more information and information that isn’t easily changed and that doesn’t expire. Also, it may take victims longer to figure out they have been victims because of the timing of receiving the benefit statements.

The FBI has reported that criminals often sell healthcare records for as much as $50 each. The Ponemon Institute put that number at over $363 in a recent study. Compare that to the $1-5 for a credit card number and you can quickly see why it is an attractive target. Consider the Excellus and Anthem Blue Cross breaches. The two of them resulted in theft of over 10 million and 78 million records, respectively.

Because of the big payday for cybercriminals, these types of breaches are expected to rise over the coming years as more organizations embrace electronic records and mobile apps. In the case of Quest Diagnostics, they have reported this incident to law enforcement and are determining the best ways to increase the security of their data going forward.

© Copyright 2016 Stickley on Security

What Are Your Financial Goals?

If you had to choose between sitting down at the kitchen table and setting goals or sitting on the beach in the Caribbean, you would probably choose the beach. But how would you pay for the airfare? Hotel? Food? Souvenirs?

Goal setting in and of itself may not be exciting and fun, but it helps you to save for and achieve exciting and fun things, as well as things that may not be as exhilarating but are still pretty important (such as having enough money for retirement or a child’s college education). You could just wait and see what is left over at the end of the month after you pay your bills, but since it is easy to get in the habit of spending what you make, you may wind up having no savings if you take this approach.

Even if you are putting money in savings, how do you know if it is enough to get what you want when you want it by? By taking the time to think about what your goals are, how much they cost, when you want them by, and what your regular obligations are, you will know exactly how much to save each month and if you need to make changes to your budget so that you can both reach your goals and pay your bills with ease.

The first step in achieving your financial goals is, not surprisingly, determining what your goals are. For right now, just think about the goals themselves and when you want to achieve them by – don’t worry about the cost. Do you want to buy a new computer in a year? Have a down payment for a house in four years? Be debt free in five years?

Once you figure out what your goals are, you can then calculate how much you will need altogether and what you should set aside each month. How you do this depends on whether it is a short-, mid-, or long-term goal.

Short-term Goals

Short-term goals are achieved in under a year. To determine the amount you will need to save for a good or service, look at what the cost is now – it is unlikely that the price will be that much different seven or eight months down the road. Once you know the total amount you need, determining the amount you need to save each month is easy – just subtract any amount you have already saved from the total cost and divide by the months until the desired achievement date.

Example 1
You would like to buy a new sofa nine months from now. You visit a few furniture stores and discover that the model you are interested in cost about $900. You have not saved anything yet. Therefore, you would want to save ($900 – $0)/9 = $100 a month.

Example 2
You would like to establish an emergency savings account within eight months. Unlike with the sofa, you can’t go to the store to determine how much you need. Instead, you want to look at what your expenses are – most experts recommend setting aside three to six months worth of essential livings expenses. You calculate your essential expenses at $1,000 a month. You would like to have five months worth of expenses in your emergency savings account and already have $1,000 in there. Therefore, you would want to save ($1,000 x 5 – $1,000)/8 = $500 a month.

Mid-term Goals

Mid-term goals are achieved within one to five years. To determine the total cost and amount you need to save per month, you can use the method just described for short-term goals or use the method that is described in detail in the long-term goals section. This method takes into consideration the fact that the cost of most things rises over time due to inflation and that your savings will grow beyond your contributions if you earn a return on your investments. The math for the first method is much easier, but the second gives you more accurate numbers. You don’t necessarily need to go the extra mile to consider inflation and return for goals of smaller amounts that you plan on achieving in a year or two, but you may want to do it for high-cost goals with a longer timeframe.

Example 1
You would like to take your family to Disney World in year. Currently, the cost of the vacation is $2,000. You have not saved anything for the trip yet. Using the short-term goal method, you calculate that you need to save ($2,000-$0)/12 = $167 a month. If you use the long-term goal method (assuming an inflation rate of 3% and an interest rate of 1.5% on your savings account), you would need a total of $2,060 and have to save $170 a month. As you can see, because the timeframe is short and the amount saved is small, using the first method gives you fairly accurate numbers without needing to whip out a financial calculator to do the more advanced math of the second.

Example 2
You owe $11,320 in credit card debt ($5,000 on a card with a 12% APR, $3,320 on a card with a 15% APR, and $3,000 on a card with a 19% APR). You would like to be debt free in four years. To figure out how much you should pay, you can’t just take $11,320 and divide it by 48 months – you need take into consideration the fact that you are charged interest each month on your outstanding balance. This can be done with a debt repayment calculator. One is available at www.federalreserve.gov/creditcardcalculator. To be debt free in four years, you will need to pay $132 on the first card, $93 on the second, and $90 on the third. (*Note: Make sure your monthly goal amount covers at least the minimum required payment.)

Long-term Goals

Long-term goals are achieved in more than five years. When you are figuring out the total amount you need to save for a long-term goal, it is important to consider the effect of inflation, which, as mentioned previously, is the general increase in the price of goods and services over time. Ever hear someone lament about how a loaf of bread, gallon of gas, movie theater ticket, etc., only cost a quarter back in the day? Well, inflation is one of the reasons those things cost multiple quarters now.

Start by researching what the cost of the goal is now. Next, figure out the rate of inflation you will use. (You can do research on what the inflation rate has been historically for your goal, but if you can’t find anything specific, you can use the general inflation rate (typically measured with the Consumer Price Index), which in recent years has hovered around 3%. Don’t worry too much about coming up with a precise inflation rate – even economists sometimes disagree on what to use.)

Keep in mind that the cost of your goal is the after-tax amount that you need. In many cases, the taxes that you have to pay on your savings may be minimal or nonexistent. However, if you are saving the money in a tax-deferred account, like a 401(k), or expect significant earnings from a taxable investment, then it is a good idea to figure out the pre-tax amount and use that figure when calculating how much you will need to save each month. Doing this will ensure that you have enough money for both your goal and taxes. If you do not know what your tax liability will be, you may want to seek the help of a financial planner or accountant.

Once you know the total amount you need to save, you can figure out how much you should set aside each month. As discussed previously, it is a good idea to factor in the return that you expect to earn on your investments. For example, if you put money in a certificate of deposit (CD), you will be paid interest. If you invest your savings in stocks, the value of the stocks will likely increase over time, and you may also receive dividends. (Investment options are discussed in more detail later.) Some investments may come with a fixed rate of return that you know ahead of time. If what you plan to invest in doesn’t, you will have to estimate what you expect the return to be. One way to do this is to look at what the return has been in the past – past performance is not always a very good predictor of future performance, but unless you have a crystal ball, you may have no other choice.

Example 1
You plan on buying a house in seven years. You would like to have a down payment of 10%. You look at home listings on-line and see that the homes you are interested in cost around $200,000. You have already saved $5,000. A real estate agent tells you that home values in your area typically increase about 4% a year, and you plan to put your savings in a mutual fund with a historical return of 5%. The current value of the desired down payment amount is $200,000 x .1 = $20,000. You use the “What will my investment be worth in the future?” calculator to determine the down payment amount you will need in seven years. You enter today’s date in “Present date”, today’s date plus seven years in “Future date”, $20,000 in “Present value”, 4% in “Rate of return”, and leave the “Compounding period” at annual. You get an answer of $26,318.64. You then use the “How much should I save each month?” calculator to determine how much you should save each month. You enter $5,000 in “Balance at start date”, 5% in “Rate of Return”, $26,319 in “Savings goal”, and 7 in “Number of years”. You need to save $192 monthly to reach your goal.

Example 2
Your child will be going to college in 10 years. You would like to pay for half of his tuition costs. You look up the current tuition at several schools. The average is $24,000 a year. You plan to put the money in your state’s 529 college savings plan, which in the past has earned an average return of 6%. You have not saved anything yet. Future college tuition can be easily estimated with the “College Cost Projector”. The tuition inflation rate (which is typically much higher than the general inflation rate) is already provided – you just need to fill in whether it is a two- or four-year college, current one-year tuition costs, and years until matriculation (start of college). (Leave “Adjust tuition after matriculation” at yes.) Entering your information in the calculator, you get a result of $209,616.96 for the total projected tuition costs (assuming an inflation rate of 7%). Thus, the amount you want to save is $209,617 x .5 = $104,809. Using the “How much should I save each month?” calculator, you determine that you need to save $640 a month to reach your goal.

Example 3
You are planning on retiring in 35 years. Other than that, you have no idea where to begin. Determining how much you need to save for retirement is no simple task. In addition to considering inflation and rate of return on your investments, you also need to consider what you expect your expenses to be when you retire, how long you expect to live, how much taxes you will have to pay on withdrawals, and what your Social Security benefits will be (or if you even want to count on receiving Social Security). Your best bet is to use a retirement calculator (a detailed one is available on the AARP’s website) or consult with a financial advisor.

How Realistic Is Your Goal Plan?

After you set your goals and determine what amount you need to save each month to reach them, it is a good idea to consider if you can actually save that much each month. If you goal plan tells you to save $1,500 a month but your income is $1,700 a month, you probably can’t save $1,500 a month. To determine how realistic your goal plan is, start by listing your current income and expenses. If there is not enough money in your budget right now to save what you want for your goals, consider if you can make any changes to your income and/or spending. Can you get a part-time job? Cut back on dining out? Get a cheaper cable package? Spend less on clothing?

If you still fall short after making adjustments to your budget, you may have to rethink your goals. Is there a cheaper alternative available? (For example, you can go to a local amusement park instead of Disney World.) Can you extend the timeframe? Are there any goals that are less important that can be dropped? Maybe you would really love to buy a $5,000 garden gnome to put in your front lawn, but having enough money for retirement is a bigger priority.

Savings

Once you have a realistic goal plan, you need to determine where your savings will go. There are three main types of investment classes:

  • Stocks. A share of stock represents a percentage of ownership in a corporation. In other words, if a company is divided into a million shares and you buy one share, you would own one millionth of that company. You can make money from receiving dividend payments and selling the stock for more than you bought it for. Historically, stocks have provided the greatest return long term. However, there are no guarantees – one day your stock may be worth more than what you paid for it, the next, less.
  • Bonds. A bond is a loan to a company or government, with you, the bondholder, as the lender. Organizations issue bonds when they want to raise funds. Generally, you receive the principal, called the par value, at maturity of the bond and interest periodically while you are holding the bond (although some only pay interest at maturity or not at all). Depending on the market, you may purchase a bond below, at, or above its par value. In general, bonds are between stocks and cash equivalents in regard to risk and return.
  • Cash equivalents. Cash equivalents are assets that can be readily converted into cash, such as savings and checking accounts, certificates of deposit, money market deposit accounts, and U.S. Treasury bills. They tend to be low-risk, so there is little or no danger that you will lose the money you deposit. As a result, cash equivalents provide a low return.

It is best to keep money for short-term goals in cash equivalents. Because you will be using the money soon, your primary concern is that you not lose any of your principal investment. If you put it in stocks, there is a good chance they could be worth less in six months. However, make sure to keep your savings separate from the checking account you use to pay for your regular expenses. If you are using a savings account, you should be able to have part of your paycheck directly deposited into it or set up a regular automatic transfer from your checking account to your savings account.

For long-term goals, the value of your investment in six months is less of a concern than inflation. The return on cash equivalents is often less than the rate of inflation, meaning if you keep your money there, its value will be essentially decreasing over time. That is why it is a good idea to put a large chunk of the money you are saving for long-term goals in stocks and bonds, which, on average, have a higher return than cash equivalents. There is a risk that the value of your investments will decrease, but the risk is lower the longer your investment period is. Inflation can be a concern for mid-term goals, but since the timeframe is shorter, you may want to be more conservative with your investment choices.

Diversification can help you reduce the risk of losing money when you invest. A well-balanced portfolio has a mixture of stocks, bonds, and cash equivalents. (What the exact percentages should be depends on how far away you are from your goals and your risk tolerance.) It is also a good idea to diversify within each type of investment class. For example, you can purchase stocks from manufacturing companies, technology-oriented companies, and financial services companies. A simple way to get diversity is to purchase shares in a mutual fund. In a mutual fund, money from several investors is pooled to buy different stocks, bonds, and/or cash equivalents.

Take advantage of tax-deferred accounts when they are available. For example, for retirement, use a 401(k) or 403(b) if your employer offers it, or you can set up a traditional IRA or Roth IRA on your own. If you are saving for your child’s higher education, you can use a Coverdell Education Savings Account or 529 plan. 401(k)s, 403(b)s, and traditional IRAs allow you to make tax-free contributions, while Roth IRAs, Coverdell Education Savings Accounts, and 529 plans allow you to make tax-free withdrawals. All of these accounts allow your earnings to grow tax free.

Be flexible
Your savings should be the first “bill” you pay each month. But what if you simply can’t put the $150 into your Maui extravaganza fund one month because your transmission blew? Resist the urge to panic, and consider it a temporary setback. With a little extra effort, you may be able to make it up over the next couple of months. Or you may be able to alter your plans or achievement date slightly. However, if you find yourself regularly unable to meet your savings goal, there may be deeper issues to contend with. Were you too optimistic with those overtime hours? Couldn’t give up smoking to save the extra $100 per month? Or perhaps the goal really wasn’t for you – you thought a new computer was vital to your happiness, but the prospect of owning it just isn’t giving you the thrill you anticipated. Revisit your goals and budget and make adjustments so that they are more achievable.

By taking the time to set financial goals, you can go from wishing to having.

 

Balance

Personal Finance for Millennials

Many Millennials, who graduated during a time of job scarcity and enormous student debt, are more than a little skittish about financial matters. After all, in addition to their own challenges, many saw their parents’ generation struggle with layoffs, stock market losses, and the housing crisis. Still, there’s a lot that today’s 20-somethings can do to build a brighter financial future.

Commit to Saving
If you’re living paycheck to paycheck, saving may seem out of reach. But the first step is to make a budget, identifying where, exactly, all of your money’s going now and pinpointing the wallet sucks that are keeping you from saving. Make it a goal to save at least 10-15% of your income, and start by creating an emergency fund with 3-6 months of living expenses. If, after seriously scrutinizing your budget, you just don’t see room for saving, at least commit to saving any financial windfalls—like bonuses and tax refunds – and saving future salary increases.

Looking for Supplemental Income
For many young people who are just starting out, the best way to find money to save is to generate additional income with a side job. If your employer doesn’t prohibit it, you might take on a second job during your off-hours or earn extra cash Ubering or pet-sitting. Or, if you’re a crafty sort, you could try selling your wares on a site like Etsy.

Start Investing Early
Once you have a decent emergency fund, you should start thinking about retirement. Yes, retirement! If your employer offers a 401(k) plan, sign up as soon as you’re eligible, because even small amounts set aside while you’re young will add up to a significant nest egg decades from now. And, if your employer offers 401(k) matching funds, be sure to contribute enough of your earnings to max out the match. Otherwise, you’re leaving money on the table.

Manage Your Debt
No discussion of Millennials’ finances would be complete without a word or two about student debt. If you’re carrying a heavy burden in federal loans, you may have options for restructuring your debt to make it more manageable. If your loans are with private lenders, you’ll have less flexibility, but focus first on paying off the loans with the highest interest rates. The same goes for credit card debt. New grads are often bombarded with credit card offers, so it’s easy to get in over your head. If that’s where you are, rip up any new offers and commit to whittling down your debt by refraining from new charges and always paying more than the monthly minimum.

Shape Up Your Credit Score
Being late with payments or, worse yet, defaulting on your credit obligations has a huge and negative impact on your credit score. This may not seem like a big deal if you’re not looking to buy a house or car anytime soon, but it isn’t just lenders who make decisions about you based on your credit score. A poor credit score can cause you to pay higher rates for car insurance in some states. Most landlords and many employers also check credit scores when evaluating candidates.

 

Balance, July 2016