5 Times Your Credit Score Matters Most

Credit - Arrows Hit in Red Target.Your credit score has a huge impact on the net loss or gain of some of life’s biggest financial moments: a good score gives you more options, better terms and bigger savings. Your credit score will follow you throughout your life and affect a variety of situations, but these five times are when your credit score really matters the most.

1. Financing a Car

There are three factors that determine how much financing a car will cost: how much money you put down, the length of the term of the loan and your credit score. On a $10,000, 60-month auto loan, a borrower with a low credit score could pay nearly $4,000 more in interest charges than a borrower with a prime credit score. If you have a less-than-stellar credit score, shop around for the best car loan rate available — the savings will be well worth the effort.

2. Buying a House

It’s common knowledge that your credit score matters when applying for a mortgage, but just how much your score costs you in the long run is often ignored. The difference between an excellent score and good score can cost you tens of thousands of dollars over the lifetime of a loan, and having a poor score can cost you your dream of homeownership altogether.

According to Informa Research Services*, the average national interest rate on a 30-year fixed rate mortgage for a consumer with a 760 or higher FICO score is 3.547% APR. If you take out a $200,000 mortgage loan at 3.547% APR, your monthly payment would be around $903. If you have a FICO score of 660, your rate could go up to 4.16% APR, which would raise your monthly payment by $70. The number seems negligible until you annualize those costs. The $70 increase adds up to more than $25,000 in additional interest on your home for the life of the mortgage.

3. Starting a Business

If you are a small business owner or have dreams of entrepreneurship, your personal credit is a major influence on the kind of capital you can access. Even if a business is set up as a corporation to limit personal liability, credit scores are often tied to the owner’s ability to personally guarantee the business’ debts; an analysis by the Federal Reserve estimated that 40.9 percent of all small business loans and 55.5 percent of small business borrowing is personally guaranteed.

4. Renting an Apartment

Though there are no official credit score requirements to rent an apartment, the higher your score, the better your housing options. A competitive credit score can give you the edge you need to rise above other applicants or take advantage of offers, like low down payment promotions for qualifying applicants.

Rental markets can be competitive, especially in large cities where many owners of multi-unit apartment buildings have a minimum score requirement to rent within the community. If you have a low score and have a hard time getting your rental application approved, you may have better success with a private landlord — your options will be limited but the requirements tend to be less strict.

5. Qualifying for Insurance

Insurance companies have standard practices for setting their rates, weighing various risk factors to calculate the exact rate to charge a customer, including their credit score. But the scores insurance companies use are different than the ones used by banks and financial services companies — these scores are called Insurance Credit Bureau Scores, or Insurance Risk Credit Scores.

Insurance scores consider credit information and previous insurance claim information, which allows insurers to determine how much of a risk someone is to insure. Actuarial studies suggests that someone who pays all of their bills on time, has a good credit history and hasn’t filed any insurance claims is less of a risk and a more profitable customer, according to the Insurance Information Institute. Therefore, a favorable credit score will not only get you a better rate on your insurance premiums, it could be the determining factor on whether you even get approved for coverage.

If you are looking to finance a vehicle, buy or refinance a home, or start your own business – be sure to contact First Financial for low rate loans and personalized service!**

*Calculations are accurate as of Dec. 8, 2014.

**A First Financial membership is required to obtain a First Financial loan and is available to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties. Subject to credit approval.

Article Source: Morgan Quinn for gobankingrates.com, http://www.gobankingrates.com/personal-finance/5-times-credit-score-matter/

3 Ways to Deal with Your Holiday Debt Before it Gets Out of Control

holiday debtDo you have high credit card balances after all the holiday shopping you did in November and December and still haven’t made a dent in it yet? First, you might want to plug your information into First Financial’s credit card payoff calculator and see how much you need to put toward those bills each month to get debt free within a few months, or whatever your debt-payoff timeline may be.

1. Open a Low Rate Balance Transfer Card

If the debt you’ve accumulated resides on a credit card with a high interest rate, you may want to explore a lower rate financing offer by transferring your balance to another credit card. This strategy requires a little math and firm commitment to your plan.

Make sure you know exactly how much you’ll be paying in fees when you transfer the balance and how long you have this lower rate financing. You can use one of the debt payoff calculators mentioned above to determine how much you need to pay each month in order to eliminate your debt within that period.

During this payoff time, it’s crucial you not add to your balance, because that will only make your goal more difficult (and expensive) to achieve.

First Financial has a great Visa Platinum Card with a really low rate, no balance transfer fees, no annual fee, plus rewards for purchases!* As a first time user, if approved – you may also be eligible for an introductory APR of 2.9% on all purchases and balance transfers for the first 6 months.** Get started by applying online today.

2. Get Your Money Back

If for some reason you never gave out all your gifts, you may want to consider returning some.  In the likely event you already distributed your gifts, take a look at your own haul. You don’t want to insensitively get rid of gifts someone thoughtfully picked out for you, but if you find yourself with things you don’t need or gift cards you don’t plan to use, consider selling them to help pay off your debt. Even exchanging an unwanted item for something you need could help you save money, if you were thinking of buying it anyway. Any way you can cut back on spending in the coming months will help you repay your credit card debt faster.

3. Take Out a Personal Loan

If you’re looking at several months or years of debt repayment, you may be better off consolidating the high-interest credit card debt with a personal loan at a lower interest rate. Again, it’s crucial you not add to the debt during or after you’ve repaid it, because that will drag out your debt issues and cost you more money in interest. It’s not always necessary to consolidate credit card debt, but sometimes that’s the best way to make repayment manageable.

First Financial also has personal loan options available, with fixed payments, plus several other great benefits.*** Apply online today!

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**The 2.9% promotional rate will apply to purchases and balance transfers only for six statement cycles from the new account holder’s initial balance and/or initial transfer to the First Financial VISA Platinum card. The balance transfer promotional rate does NOT apply to purchases or cash advances.

***Subject to credit approval. A First Financial membership is required to obtain a personal loan and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.

Article Source: Christine DiGangi for http://blog.credit.com/2015/01/3-ways-to-deal-with-your-holiday-debt-before-it-gets-out-of-control-104906/

5 Credit Assumptions You’ve Got All Wrong

Credit Inscription on Red Billboard.Let’s face it – when it comes to credit and credit scoring, there’s a lot of misinformation out there. As a result, many people make assumptions about their credit that are incorrect. Here are 5 common examples of false credit assumptions, and the truth behind each one.

1. Paying a late fee means you won’t get reported to the credit bureaus.

If you slip up and pay a bill late, getting hit with a late fee probably seems like punishment enough. After all, forking over an extra $25-$35 for your forgetfulness feels like a sufficient slap on the wrist.

But if your payment is more than 30 days overdue, you could expect a negative mark to land on your credit reports, regardless of whether or not you’ve coughed up a late fee. This is a good reason to prioritize paying on time – if you don’t, it could be costly in a number of ways.

2. Your credit utilization ratio is 0% if you pay your balance in full each month.

Paying off your credit card in full each month is a good habit to get into. But as you’re patting yourself on the back for avoiding interest charges, don’t forget to remain diligent about keeping track of your credit utilization ratio.

Here’s why: Your credit card issuer could send a balance report to the credit bureaus at any time during the month – not necessarily right after you’ve paid your bill. Consequently, keeping your balance below 30% of your available credit on all your cards throughout the month is key to maintaining a solid score.

3. All of your monthly bill payments are being reported to the credit bureaus.

Personal finance experts commonly recommend that we pay all of our bills on time. This is certainly important for avoiding late fees (see above), but it causes many people to assume that all of their bill payments are being reported to the credit bureaus.

This usually isn’t the case. Rent and utility payments are typically not reported unless you become seriously delinquent. You still should always pay on time, but these payments generally won’t give your score a boost.

4. Avoiding credit cards will help your credit score.

In an effort to avoid getting into debt, some people choose to forfeit credit cards altogether. While it’s true that maxing out a card will do damage to your credit score, avoiding plastic entirely usually isn’t a good idea, either.

Getting a credit card as soon as you can and using it responsibly (which means paying your bill on time and in full every month), is one of the easiest ways to start establishing a solid credit profile. The longer you go without establishing credit, the harder it will be to do so.

The takeaway? Using a credit card to build your credit doesn’t have to result in debt if you make a budget and track your spending carefully. Usually, the benefits of doing so outweigh the risks.

Try First Financial’s Visa Platinum Credit Card for a great low rate, rewards on purchases, no annual fee, and no balance transfer fees!*  Apply online today.

5. A bankruptcy will affect your credit for the rest of your life.

It’s true: Declaring personal bankruptcy will have a serious, negative impact on your credit. But don’t let Internet rumors or sensational media reports warp your thinking – a bankruptcy won’t actually trash your credit for life.

In most cases, a bankruptcy will stay on your credit reports for 10 years, and the effect of this event on your credit score will lessen over time. This is not to say that you should treat bankruptcy lightly, but it’s important to know that no negative mark has to affect your credit forever. By letting some time pass and cleaning up your credit habits, there’s always a way to bounce back.

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

Article Source: https://www.nerdwallet.com/blog/tips/credit-score/credit-assumptions/

Bad Credit Makes Everything Harder: How to Fix it and Start 2015 Off Right

07232014_Woman_Dollars_Lasso_Women_originalHaving poor credit definitely makes your life more expensive. Mortgages, car loans, insurance policies and a host of other items all carry higher rates if your credit score is low – which is why achieving and maintaining a solid credit score is a must for anyone who wants to improve their financial situation.

But higher expenses aren’t the only way a bad credit score can cost you. Renting can be more difficult, as landlords commonly pull a potential tenant’s credit score as part of the rental application process; many will dismiss renters with low credit scores without a second look. Finding the right credit card could also be a struggle, as there are fewer options for those with poor credit.

Here are three other lesser known ways that poor credit makes life more difficult – plus five tips to dig your way out of that:

1. Setting up utilities is more complicated.
For those with good credit, setting up utilities usually requires a simple phone call or two – but people with poor credit have to take extra steps. If your score is really awful, you may need to put down a deposit with each utility company to get your services started.

2. Getting a new job or promotion is more difficult.

Potential employers can’t view your actual credit score, but they can request an employment credit report, which omits your account numbers and personal information yet includes your payment history and loan information. In today’s employment market, a poor report could be the reason you’re rejected for a job or a promotion.

3. Starting a new relationship can be – complicated.
Not even your romantic life is safe from a bad credit score. Savvy consumers who are financially responsible know the potential impact of a partner’s bad credit on their own finances. According to a 2014 NerdWallet analysis, 53 percent of single adults over age 25 say they are “somewhat less likely” or “much less likely” to go out with someone with bad credit.

Though bad credit can be a heartbreaker in more ways than one – you can fix it. Here are five ways to raise your credit score:

  1. Pay your bills on time – no exceptions, no excuses. This is far and away the most important thing to build and maintain good credit.
  2. Avoid using more than 30 percent of the available credit on your cards during the month, say many experts. Monitor your balance carefully throughout your billing cycle and make a payment if you start to get too close to that threshold.
  3. Start using credit as soon as you can. The easiest way to do this is to get a credit card and use it responsibly and consistently.
  4. Only apply for credit you actually need – too many hard inquiries in the span of just a few months will ding your score.
  5. Use AnnualCreditReport.com to obtain a copy of your three credit reports once per year. Review them, carefully, for accuracy; if you spot an error, start the process of having it corrected as soon as you can.

Don’t forget about our free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live. Feel free to check out our interactive financial calculators – we even have ones for Credit Cards and Debt Management!

Original article source by Lindsay Konsko of The Fiscal Times.

Holiday Credit Card Traps – Beware!


Credit Card Trap, Predatory LendingBeware: Zero interest-rate financing. Store cards with discounts. Cash advances.

As consumers gear up for the holiday spend-a-thon, there are also plenty of opportunities to get into trouble with credit cards. And if you’re not careful, you can find yourself with a lower credit score, high interest payments, and more.

Holiday spending is expected to increase nearly 5% this year, with the average consumer planning to spend $804, according to the National Retail Federation. That can make credit card deals look enticing, and too good to be true.

Deferred interest credit card offers, for example, often surface this time of year, according to Gerri Detweiler, director of consumer education for Credit.com. These offers, often announced as “zero percent interest” or “special financing” promotions, typically give consumers a grace period on interest, sometimes for a year or more.

For a consumer making a big purchase and planning to pay it off within that time, deferred interest plans can be helpful, Detweiler said. But she warned that consumers who leave even a single dollar of charges on the card by the time the deferred interest period is over can be hit with retroactive interest charges on the entire balance they charged.

She had just received a letter from Home Depot, for example, explaining that if she took its deferred interest offer and did not pay it off in full within the specified period, she would be charged interest on all her charges retroactively at a rate of 22.9%. (The store’s website describes a six-month deferred interest offer with interest rates on unpaid balances ranging from 17.99 to 26.99%).

According to CardHub, a credit card comparison website, paying off your credit card debt one month behind schedule or missing a single payment could increase your financing costs by more than 27 times if you rack up charges under a deferred interest plan. The site has compiled a list of retailers offering deferred interest plans with varying degrees of transparency.

Regulators are keeping an eye on deferred interest offers as well. In September the Consumer Financial Protection Bureau issued a bulletin warning credit card issuers against “engaging in deceptive and/or abusive acts and practices in connection with solicitations that offer a promotional annual percentage rate (APR) on a particular transaction over a defined period of time.”

Opening new credit card accounts is another potential pitfall for consumers. Many retailers encourage consumers to take out store cards, often by offering enticements like a discount on that day’s purchases, or by offering a discount if the consumer spends above a certain threshold.

“Some of these offers will be designed to encourage you to spend more,” said Jeanine Skowronski, a credit card analyst with Bankrate.com.

High interest rates

Store credit cards often carry high interest rates. And even an application for a new credit card will appear on your credit report, Detweiler said.

“Every time there is an inquiry into your credit file, that’s a risk factor and that drops your score,” she warned. “If you open three or four new retail cards over the holidays, you can wind up not only with a lot of debt but also a lower credit score. If you know you are going to refinance a house or buy a car, be careful.”

Credit card cash advances are another potential pitfall for consumers. The interest on these is often well above the interest on credit card purchases.

“Stay away from them at all costs,” Skowronski said.

For people who really want to shop with cash, Detweiler recommends an alternative to credit card cash advances: a balance transfer. Consumers can ask a card issuer to deposit cash in their account to be used to pay off another card. Often, the interest rate on that balance transfer cash will be lower, Detweiler said — but usually only for a limited time. After that, she said, “any balances left will be charged a much higher interest rate.”

Of course, there are ways credit cards can be helpful with holiday spending too. For example, consumer protections on credit cards tend to be stronger than for debit cards: consumers are typically only liable for a maximum of $50 if they fall victim to credit card fraud, and as soon as the card is replaced they can use it again. Losses on a debit card are capped at a higher level, and it can take longer for a bank to straighten out an account where there has been fraud.

Credit card price protection promises can also be helpful. These guarantees typically allow a consumer to get a refund if the price on something they purchased drops within a specified period of time. Taking advantage of those guarantees takes discipline, though, as does sticking to a holiday spending plan.

Need to transfer a high rate credit card balance without any balance transfer fees, to a lower rate card? This is possible at First Financial, where our credit card rates are as low as 10.9% APR and we have no balance transfer fees!* And for a limited time – if you are approved for a balance transfer of $5,000 or more to our VISA Platinum Credit Card, you will receive 10,000 bonus CURewards Points! You can apply for the balance transfer by stopping into any branch or calling 866.750.0100 to be sent a balance transfer request form.**

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**Additional bonus points will be reflected within 30 days from the balance transfer approval and can be viewed when signed into your VISA Platinum Card Account online through Online Banking. In order to redeem bonus points, an offer reference must be made to a First Financial representative. Bonus points can only be redeemed one time per member, on an approved balance transfer of $5,000 or greater during the promotional period of 4/28/14 – 12/31/14.

4 Ways to Keep the Grinch from Stealing Your Good Credit

GrinchDuring the holiday season, we’re more at risk for fraud and identity theft as we head out or online to shop. Theft of your credit cards or identity can be devastating to your credit, not to mention your finances and emotional well-being. Not exactly something we want to happen during this joyous time of year, right? Here are some tips to remember as we are holiday shopping.

1. Shop Safe Online

Be aware that just because you can shop in the comfort and safety of your home doesn’t mean you’re not at risk for identity or credit card theft. Stay safe online by entering your credit card number in as few places as possible – use a payment service such as PayPal; shop at reputable websites with names you know and trust; and avoid clicking on links sent to you in email or banner ads that could take to you websites other than where you intended to go.

2. Keep an Eye on Your Cards

When you’re out shopping at a brick-and-mortar store, keep an eye on your credit cards and make sure store clerks are not allowed to leave your sight with your cards in hand. Also, pick-pocketers are common this time of year, so make sure to keep your valuables safe when you are in public.

3. Check Your Statements

Checking your bank and credit card statements regularly – even as often as every day – is a great habit to start now, if you don’t already do it. This time of year, when you’re more likely to have increased activity on your accounts, it’s especially important to review them carefully and thoroughly. Get signed up for online access so you don’t have to wait for paper statements to arrive. If you see anything questionable, you can act on it right away and resolve any problems. You can also sign up for alerts to notify you whenever a purchase goes through.

4. Check Your Credit Reports & Credit Scores

The end of the year is also a great time to pull your credit report and/or get your credit score and compare it to your last one. Check your credit reports for any incorrect or unfamiliar information, inquiries, or credit accounts. Report any suspicious or wrong information to the creditor and the credit bureau. You can pull your credit reports for free every year from each of the three major credit reporting agencies on AnnualCreditReport.com, and you can see two credit scores for free on Credit.com.

With these four simple steps and by being smart and aware of your surroundings, you can help keep yourself, your identity, and your credit safer from the Grinch. Cheers to a happy holiday season!

Don’t wait until it’s too late! Check out First Financial’s ID Theft Protection products – with our Fully Managed Identity Recovery services, you don’t need to worry. A professional Recovery Advocate will do the work on your behalf, based on a plan that you approve. Should you experience an Identity Theft incident, your Recovery Advocate will stick with you all along the way – and will be there for you until your good name is restored and you can try it FREE for 90 days!*

Our ID Theft Protection options may include some of the following services, based on the package you choose to enroll in: Lost Document Replacement, Credit Bureau Monitoring, Score Tracker, and Three-Generation Family Benefit. To learn more about our ID Theft Protection products, click here and enroll today!**

*Available for new enrollments only. After the free trial of 90 days, the member must contact the Credit Union to opt-out of ID Theft Protection or the monthly fee of $4.95 will automatically be deducted out of the base savings account or $8.95 will be deducted out of the First Protection Checking account (depending upon the coverage option selected), on a monthly basis or until the member opts out of the program. 

**Identity Theft insurance underwritten by subsidiaries or affiliates of Chartis Inc. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

Article Source: Jeanne Kelly of Credit.com, http://www.foxbusiness.com/personal-finance/2014/12/09/4-ways-to-keep-grinch-from-stealing-your-good-credit/