“The more intentional we are with our financial behavior the better our personal finances become": Actor Hill Harper
Hill Harper, actor and financial literacy activist, joins the Yahoo Finance Live panel on the importance of financial literacy.
ZACK GUZMAN: But we've talked a lot about how consumer health has recovered from this pandemic. We've talked a lot about how savings rates have increased and Americans have paid off debt, and there is a lot of uncertainty about what the route back to normal might look like. I want to address our next guest, not just an actor you may know from "The Good Doctor," but also a financial literacy attorney, a financial literacy activist. Hill Harper is joining us now.
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And Hill, nice to chat with you here. I mean, we talked a lot about this topic because obviously there was so much uncertainty early on. But now it's somewhat surprising to see that the way many Americans have managed this with credit scores hit a record high of 710 last year, according to Experian's latest survey here. Talk to me about what you are hearing out there as people have been able to keep that bowel beat at bay.
HILL HARPER: Absolutely. April is the month of financial literacy. So I'm proud to partner with Experian to have such personal finance conversations and people who are in control of their finances. You know, like you told the Experian survey, if anyone knew what credit scores are - what happens to credit scores, it would be Experian. Experian found that credit scores have increased. And I think people are saving more. You spend less. They pay off their debts. And you can see that this results in positive credit score activity.
And people stay home too. They check their scores more often. You become more deliberate. All of these are good things people do. The hope is that we can continue with the same intent that emerged from the pandemic. I know you had a previous guest who talked about people out there going to be spending money. Hopefully people can be very anxious to identify their needs versus their wants and very anxious to upgrade their spending to improve those scores and use free tools like the Experian Boost tool that are out there .
You know, I am talking about this tool because I like it. People can't do it if they don't know about it. You go to experian.com/boost. You can use this tool that adds more positive payment histories. This is the only algorithm of its kind on the credit rating agencies where you load bills that you pay, be it through your credit card or bank account, like Netflix, Hulu, whatever, and you can actually get credits for paying them Bills get bills where other places don't get this credit. I like this because it hits the everyday consumer and helps them build their score. I think they raised 50 million, the number that Experian increased overall creditworthiness by simply adding this to their algorithm through Experian Boost, which is fantastic.
AKIKO FUJITA: Hill, to your point, this pandemic has allowed many Americans to really roll back their credit. Many of them have paid off their debts through the stimulus checks. You didn't really spend a lot of money being home. What is the only advice you give to those who are now saying that I am coming out of this pandemic in better shape? How can I keep this up?
HILL HARPER: Okay, let me really mention two things that I think are critical. The pandemic taught us one thing. We need an emergency fund. Maybe you went through this emergency fund. And at that point, it's not where it needs to be. I always speak of at least six months. So what was that supposed to occupy?
Number one, your housing expenses, whether you have a mortgage and taxes or paying rent, food, water, and utilities. I also include my telecommunications and cell phone bills as needs. These are needs versus wishes. You add that times 6. That's what you need to have in your emergency fund. You don't have to worry about it all at once. Put money in that bucket. Make sure you have it. The more months the better.
Also, pay off your balance with the highest interest rates - usually credit cards. But even if it's a car loan or whatever, aim for it first. Many people don't even know what the interest rate they are paying on some of their credit cards. Here's how to find out that information.
And then check your credit score regularly. The more intentions you have - people sat at home and checked their scores. Keep checking if you're not at home, right? Go to Experian.com and check out this. This is important. And all of those things that add intentionality help. I haven't mentioned budgeting and all of those things. But we have learned that the more consciously we are about our financial behavior, the better our personal finances become.
AKIKO FUJITA: Some good food stalls. Hill Harper, it is good to speak to you today. Cherish your time.
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