 TITLE: How Savings Can Impact Your Credit CONTENT: How a Savings Account Can Indirectly Help Your Credit\n-----------------------------------------------------\nBuilding and keeping money in a savings account is an important step in putting your credit in a healthy place. You'll want to have enough money in an account to use for a crisis, meet your current financial obligations and help your future borrowing prospects, especially obtaining a home loan.\n*   **Cover emergencies**: Money held in an emergency account will enable you to pay for crucial but unanticipated expenses without having to borrow for them. For example, if you need to go to the hospital, you may have to pay thousands of dollars for a deductible before your health insurance kicks in. Using savings can prevent you from having to charge a large bill that would throw your credit utilization ratio off balance.\n*   **Insure current debt**: Savings can give you peace of mind that you'll be able to cover your bills if costs go up or if expected income doesn't come through. If you have a car loan, a savings account will help you make sure those payments always show up on your credit report as on time, even if you lose your job or have other expenses pop up.\n*   **Appease a mortgage lender**: If you're in the market for a home loan, having plenty of cash in a savings account will not just make you more appealing to a lender, it's usually essential. That money serves to lower the lender's risk level. If you can't keep up with the payments in the first few months of buying a home, you could wind up in early foreclosure. Most mortgage lenders will expect you to have at least two months' worth of mortgage payments set aside in a bank account.\nIn addition to socking money away for all the events, planned and unplanned, that come up in your life, familiarize yourself with what appears on a credit report. It will give you the opportunity to address any problems before they get out of control. You can access your Experian credit report for free, and there is no downside to reviewing it frequently. With a recent copy of your credit report, you can compare what you owe to the amount you have set aside. Every so often step back and calculate your net worth by adding up all of your assets and subtracting the total of all of your obligations and debt. You'll want that figure to be positive and grow over time. Savings is a major part of your overall financial well-being, which includes safeguarding your credit. END