“The more intentional we are with our financial behavior the better our personal finances become": Actor Hill Harper

Hill Harper, Actor & Financial Literacy Activist joins the Yahoo Finance Live panel with the importance of financial literacy.

Video Transcript

ZACK GUZMAN: But we've talked a lot about the way that the health of the consumer has rebounded in this pandemic. We've talked a lot about how savings rates have increased and Americans have paid down debt as well as there are a lot of uncertainties about what the road back to normal might look like. I want to bring on our next guest, not just an actor you might know from "The Good Doctor," but also an advocate for financial literacy, a financial literacy activist. Hill Harper joins us right now.

And Hill, good to be chatting with you here. I mean, we've talked a lot about this issue because there was so much uncertainty early on, obviously. But now kind of surprising to see that the way that a lot of Americans have been able to navigate this with credit scores, according to Experian's latest survey here, hitting a record high, 710 last year. So talk to me about what you're hearing out there, as people have been able to kind of take this gut punch in check.

HILL HARPER: Absolutely. Well, you know, April is Financial Literacy Month. And so, I'm proud to partner with Experian to be able to have conversations like this about personal finance and people taking control of their finance. You know, as you said, the Experian survey, if anybody would know what credit scores are-- what's happening with credit scores, it would be Experian. So, Experian found that credit scores have gone up. And I think that people are saving more. They're spending less. They're paying down their debt. And you're seeing that result in positive credit score activity.

And people are also staying at home. They're checking their score more often. They're becoming more intentional. All of these are good things that folks are doing. The hope is we can continue that same intentionality coming out of the pandemic. I know you had an earlier guest talking about, well, people are going to get out there spending. Well, hopefully, people can stay very intentional about identifying their needs versus their wants and stay very intentional about their spending to keep those scores moving up and using free tools like the Experian Boost tool that's out there.

You know, I talk about this tool because I like it. People can't do it if they don't know about it. You go on to experian.com/boost. You can use this tool that adds in more positive payment histories. It's the only algorithm of its kind as far as the rating agencies where you load in bills that you're paying, whether through your credit card or your bank account, like Netflix, Hulu, whatever, and you can actually get credit for paying those bills where other places, you don't get that credit. I like that because that hits the everyday consumer and helps them build their score. They've raised, I think, 50 million is the number that Experian on aggregate has increased credit scores through just adding that to their algorithm through Experian Boost, which is fantastic.

AKIKO FUJITA: Hill, to your point, this pandemic has allowed a lot of Americans to really reset their credit. A lot of them have paid down their debt through the stimulus checks. They haven't really spent a lot of money, being at home. What's the one piece of advice that you pass along to those who are saying now that I'm emerging out of this pandemic in a better state, how do I keep that going?

HILL HARPER: OK, well, let me give two things, really, that I think are critical coming out. The pandemic has taught us one thing. We need to have an emergency fund. So you may have gone through that emergency fund. And at this point, it's not where it needs to be. I always talk about at least minimum six months. So what should occupy that?

Number one, your shelter cost, whether you have a mortgage and taxes or you're paying rent, your food, water, and your utilities. I also include my telecom and my cell phone bill into that as a need. Those are needs versus wants. You add up that, times it by 6. That's what you need to have in your emergency fund. You don't need to take care of that all at once. Put money into that bucket. Make sure you have it. The more months, the better.

Also, pay down your highest interest credit-- usually, they're credit cards. But even if it's a car loan or whatever, target that first. Many folks don't even know what the interest they're paying on some of their credit cards is. And so find out that information.

And then check your credit score regularly. The more intentionality you have around that-- people have been sitting at home, checking their score. Keep checking it when you're not sitting at home, right? Go to Experian.com and check that out. That's important. And all of those things, adding intentionality to it, helps. I haven't mentioned budgeting yet and any of those things. But we got to know, the more intentional we are with our financial behavior, the better our personal finances become.

AKIKO FUJITA: Some good takeaways there. Hill Harper, it's good to talk to you today. Appreciate your time.