How to Build Credit if You Have a Small Income

Building and maintaining a good credit score is one of the best moves you can make for piggy bankyour financial health. It might seem intimidating at first – the credit scoring system is definitely complex – but when it comes time to apply for a mortgage or other loan, you’ll be happy you made building a solid score a priority.

How does the picture change if you make a small income? As it turns out, not much. You don’t need to be a Rockefeller to achieve good credit. Take a look at the details below to learn how to build a great score, no matter how large or small your paycheck is!

First, know what makes a good score.

Before digging into specific recommendations, it’s important to understand the factors that affect your credit score. The FICO scoring model – which is the most widely used credit scoring system in the United States today, takes a lot of variables into account to create your score. These include:

• Payment history
• Amounts owed
• Length of credit history
• Mix of credit accounts
• Recent credit inquiries

You’ll notice that income is not one of the factors used to determine your credit score. This means that earning a big salary doesn’t equate to earning a high credit score. Even if you have a small income, you can succeed at scoring high, as long as you’re using the right strategies.

Need to get your credit score in check? Try First Financial’s First Score Program, a low cost, interactive session ($30) with a First Financial expert, which simulates your credit score with various “what if” scenarios. You can email us at firstscore@firstffcu.com or call 866.750.0100, Option 4 to get started.

Obtaining credit is an important first step.

It’s empowering to know that the steps to good credit are about financial behaviors, not the size of your bank account balance. But what exactly should you be doing to get there?

Above all, it’s important to start using a credit account responsibly as soon as you can. Proving to potential lenders that you can be trusted with borrowed money is the best way to start building your credit momentum.

One of the easiest ways to do this is with a credit card. If you’re not earning much money, you might be shying away from plastic to avoid the temptation to overspend. But this may in fact stall your efforts to build good credit.

If you’re not interested in getting a credit card, obtaining another type of loan to establish a credit history is a good idea. You might have trouble getting approved if your income falls below the lender’s requirements. In this case, offering a big down payment or securing a co-signer might help you qualify as well.

Did you know First Financial has a lower rate VISA Platinum Credit Card, great rewards, no annual fee, and no balance transfer fees? Apply today!*

Keep up with good habits.

Once you’ve gained access to credit, keeping up with good habits is essential to building your score further. Specifically, you should focus on a few important behaviors.

The two most important factors the FICO score looks at are:

  • Payment history – Are you making the minimum payment required on time every time? This accounts for 35% of the FICO Score.
  • Credit Utilization – Are you keeping the balances on revolving credit (typically credit cards) below 30 percent of your available credit? This accounts for 30% of the FICO Score.

In short, paying your bills on time and in full are the two most powerful things you can do to create and hold onto a good credit score.

And just to be clear: Neither requires a big income. Spend and borrow within your means, and it will be easy to manage your payments properly.

The takeaway: Those with small incomes have the same opportunity as their high-earning counterparts to build good credit.

Use the tips above to get started 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. 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: Lindsay Konsko of NerdWallet

http://www.usatoday.com/story/money/personalfinance/2014/09/01/credit-score-financial-health/13628811/

Shoppers Beware: Retail Credit Card APRs Average 23%

Open WalletBefore you take the bait from the cashier and sign up for a new store credit card, be sure to read the fine print first.

Retail credit cards boast average annual percentage rates of 23.23%, according to a CreditCards.com analysis of cards from 36 of the nation’s biggest retailers.

That’s more than eight percentage points higher than the average credit card APR of 15.03%.

“Retailers dangle incentives like 15% off a purchase to encourage consumers to sign up for their credit cards,” said Matt Schulz, senior industry analyst at CreditCards.com. “But the much higher interest rates far outweigh the one-time discount for anyone who carries a balance.”

If you’re confident you will never miss a payment and you think the retailer’s rewards program would provide you with savings, then it could be a fine deal. But if there’s even a small chance you’ll carry a balance, you could end up paying big money in interest as a result.

Customers with a 23.23% APR credit card, for example, would be hit with $840 in interest if they carry a $1,000 balance and only make minimum monthly payments — and it would take them 73 months to repay that balance. That compares to $396 in interest for the average credit card.

Jeweler Zales’ store card topped the list, with a rate of up to 28.99%, Office Depot and Staples both offer cards with rates as high as 27.99%, and Best Buy credit cards come with rates ranging between 25.24% and 27.99% depending on your credit.

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.**

If you have a great deal of debt, we also have a free, anonymous online debt management tool called 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.

*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.

Article Source: Blake Ellis for CNN Money, http://money.cnn.com/2014/08/07/pf/retail-credit-cards/index.html?iid=SF_PF_River

 

Is There Such a Thing as Good Debt?

3d man sitting sad with text 'debt'.Most of the time, the word “debt” has negative connotations. Debt costs you money and therefore takes money away from financial goals like saving and investing.
So could there ever be good debt? That’s no easy answer. How you use debt has a big impact on whether or not you can consider it “good.” If you have too much of a “good” thing — that’s when it can turn into bad debt. So let’s consider 3 types of debt: investing in a college education, buying a home, and starting a business.

1. Are Student Loans Always Good Debt?
Student loans aren’t always good debt, because most people don’t consider how long they’ll be paying back their student loans when they take them out. But that doesn’t make them bad. If you take them out to obtain a job that you could have only secured with a college education and earn enough to make your student loan repayments manageable, your student loan debt was a good debt.

Here are some tips for student loans:

  • Keep your total loans under your projected starting salary when you graduate. If you’re able to do that, you should be able to pay them off with the standard 10-year plan.
  • Cut down on the loan amount. Get college credits while you’re in high school, go to a community college for your first two years, stick to a state school, and apply for scholarships.
  • Get a job to pay for your living expenses while you’re in school so you don’t take out loans for living expenses.
  • Keep in mind that private student loans don’t offer the flexibility of federal loans, so try to apply for federal student loans first.

Check out our FREE student loan calculator here to help manage your student loan debt, which will show you how much you can save by consolidating multiple loans or how to pay off your high interest student loan debt as quickly as possible.

2. How Much Should I Borrow for a Mortgage?
Owning a home used to be considered the American dream, and for many people it still is. Most people need to take out a mortgage for their purchase. If you think you’ll be in the same area for several years and can put a 20% down payment on a home, a mortgage could be a good long-term investment. Interest rates on mortgages are historically low, and owning a home can also provide tax benefits. The nice thing about a home is that it’s an investment you can live in.

However, many people end up buying a home without thinking about how it will affect their lifestyle or how they’ll pay their mortgage if an emergency came up. To avoid this, here are a few rules of thumb:

  • Make a 20% down payment so you can avoid paying private mortgage insurance.
  • Don’t use your entire savings account for a down payment. Homes are a hotbed for dipping into your emergency savings, as there are far more unexpected expenses that come up than when you’re living in an apartment.
  • Boost your credit score before you buy. Make sure you have a score above 700 so you can qualify for the best mortgage rates available. This can save you thousands of dollars in interest over the life of the loan.

Try First Financial’s First Score Credit Counseling program; a low cost, interactive session ($30) with a First Financial expert, which simulates your credit score with various “what if” scenarios. You can email us at firstscore@firstffcu.com or call 866.750.0100, Option 4 to get started.

  • If you think you might move in the next five years, you might want to rent so you don’t have to move during a down market and possibly sell your home for a loss.
  • In figuring out your monthly housing costs, the principal and interest on the mortgage loom large. But don’t forget property taxes, insurance, utilities, repairs, landscaping, snow removal and other factors. Make sure that your monthly housing expenses leave room for other expenses too.

We offer a number of great mortgage options, including refinancing – click here to learn about our 10, 15, and 30 year mortgage features and see what a good fit for your home is!*

To receive updates on our low mortgage rates straight to your mobile phone, text FIRSTRATE to 69302 and each time our mortgage rates change, we’ll send you a text message with the new rates.**

3. What About Using a Loan to Start a New Business?
Entrepreneurship seems to be the new job security for many people in this generation. Incurring debt to start a business can be good debt if the funds help you to build a sustainable livelihood that allows you to repay any money borrowed and improve your financial situation. Just be cautious of how much debt you’re taking on.

Follow these tips to be financially smart and successful in your business:

  • Self-fund your business venture with savings first.
  • The smaller the investment, the quicker you can make money.
  • Do your research and get experience in the field before your launch. Some business opportunities require much bigger up-front investments, which may lead to a small business loan.

Did you know First Financial offers Business accounts, loans, and services? We understand that not every business is the same and, therefore, not every loan need can be the same.  This is exactly why we look at each individual business and create a customized lending solution to meet your specific needs. Please contact us at business@firstffcu.com and we’ll be happy to provide you with more information on business loans and services.

Debt Costs Money, So Use it Wisely
Debt can be good, but only if it helps you leverage your assets to build wealth. Every good debt has the potential to turn bad, so do your research first. The fewer monthly obligations you have, the more money you have to fund a lifestyle that you love.

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.

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Subject to credit approval. Credit worthiness determines your APR.

 **Standard text messaging and data rates may apply.

 Article Courtesy of Daily Finance Online by Sophia Bera

First Financial Foundation Announces Winners of 2014 Erma Dorrer Literary Scholarship

Press Release

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(L to R): 2014 scholarship winners Kimberly Rogers, Demonica Britt, Michael Perry, President/CEO Issa Stephan, and Carly Burrus.

WALL, N.J. – The First Financial Federal Credit Union Foundation (www.firstffcu.com) recently awarded $500 scholarships to four deserving undergraduate students.

This year’s winners included: Kimberly Rogers of Ocean Township, Georgian Court University; Demonica Britt of Freehold, Seton Hall University; Michael Perry of Freehold, Boston College; and Carly Burrus of Neptune, Coastal Carolina University.

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Pictured above: 2014 scholarship winner Kimberly Rogers with Issa Stephan and her parents.

This year, there was one scholarship topic for student applicants to respond to: In today’s world, identity theft, building credit and maintaining good credit are essential elements in our financial lives.  How will you address these essential financial elements during your college years, and how will you guide your friends and family to address the above elements?  Your response should include details about how to protect yourself and what others should do to protect themselves from ID theft, as well as how you plan to build credit and maintain credit for your financial future.

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Pictured above: 2014 scholarship winner Demonica Britt with Issa Stephan and her daughters.

Applicants submitted a written essay or video clip to answer the question, and had to be a member of the credit union by 12/31/13 and about to attend for fall 2014 or currently attending a 2 or 4 year college anywhere in the country.

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Pictured above: 2014 scholarship winner Michael Perry with Issa Stephan and his parents and grandmother.

“We are thrilled to be able to aid these admirable and bright students in their journey of success and education,” said First Financial President and CEO, Issa Stephan.  “Our credit union puts a high priority on education, after all – that’s how First Financial began 78 years ago, with a group of schoolteachers in Asbury Park.”

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Pictured above: 2014 scholarship winner Carly Burrus with Issa Stephan and her mother.

View more about this year’s scholarships and the First Financial Foundation on First Financial’s website.

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About the First Financial Foundation:

Since 1994, First Financial has supported the Monmouth & Ocean communities with the Erma Dorrer Scholarship Program. Today, that program has been extended into the First Financial Foundation to assist charitable organizations of the Monmouth & Ocean County Communities.  The First Financial Federal Credit Union Foundation is a non-profit working to support a variety of community programs and organizations throughout Monmouth and Ocean Counties.  We direct 100% of your contributions to programs because all administrative expenses are paid for by First Financial Federal Credit Union.  To learn more, visit www.firstffcu.com.

What’s Going There? First Financial Plans in Howell

Courtesy of the Asbury Park Press Online

construction0708The recent explosion of commercial growth on Route 9 in Monmouth County continues on an 8½-acre construction site along the northbound side of the roadway just north of the muncipality’s park-and-ride near the boundary with Freehold Township.

First Financial Federal Credit Union, the Wall-based not-for-profit financial cooperative that operates four locations throughout Monmouth and Ocean counties, will spend roughly $1.5 million to build a 3,000-square-foot branch on the site. The company broke ground on the single-story branch late last month and plans to open it in December. The company also plans to spend $4 million to move its headquarters there from Wall by 2016.

Rather than an expansion, however, First Financial’s construction of the branch marks an attempt at consolidation. The company desired a freestanding branch on its own land, and so it allowed its lease of a storefront within Lanes Mill Marketplace on Route 9 North in the township to expire this past April and will do the same with its leased storefront within Barclay Square on Route 9 South in Freehold Township once it opens the new branch.

Similarly, First Financial’s lease on its current headquarters on Route 34 in Wall will expire in 2016, so it will open a new corporate office building that will stand two stories tall and span 20,000 square feet.

*Article written by staff writer Anthony Panissidi of the Asbury Park Press. 

Budget Tips for Planning for Life’s Unexpected Curve Balls

couple-worry-moneyLife doesn’t always go as planned, and many of life’s major events, like getting married, having a baby and buying a home can crowd your savings capability and even throw you into a financial tailspin.

When it comes to making ends meet, retirement is often left out of the savings equation. Eighty-four percent of people say saving for retirement has been undercut by a life event, according to this year’s HSBC Future of Retirement survey of more than 15,000 people. But people react differently when in crunch mode, the survey says, and in some cases, extreme measures are required to cover budget needs. Three tactics improve cash flow in a financial crunch: increase income, decrease expenses or a combination of both.

Time to Downsize?

In reality, you have more control on your spending side, particularly with flexible expenses like travel, entertainment, gifts and food. But if your financial woes seem irreversible, you may have to take a hammer to large expenses like housing.

In fact, 21% of women surveyed say they would downsize, compared to only 14% of men. And 31% of men say they would dip into their retirement savings to cover unexpected expenses.

Though experts concede downsizing may be extremely emotional, it’s more preferable than taking a chunk out of retirement savings. Actually, 29% of respondents say the financial strain of home ownership puts a real crimp in retirement savings.

If you have any questions about the home buying process, feel free to ask us! We know it can be an intimidating process at times, and we’re here for you. To apply for a 10, 15, or 30 year First Financial Mortgage – click here.* You might also want to subscribe to our mortgage rate text message service, by texting FIRSTRATE to 69302. When our mortgage rates change, you’ll be the first to know!**

Rethink Your Lifestyle.

Today’s lifestyle norms may have something to do with one-dimensional thinking. Items once seen as luxuries are now seen as necessities, says Ravi Dhar, director of the Yale Center for Customer Insights.

Plus, what people do with their money has more to do with psychological and emotional issues than it does with crunching the numbers, claims Marcee Yager, a retired certified financial planner. “It’s never just about the money.”

Because non-financial issues often dictate financial decisions and create a domino effect, consumers need to look at both quantitative (intellectual) and qualitative (emotional) issues when making life choices, says Yager. “Without shared thinking, people’s heads start spinning.”

The idea that emotional understanding must be factored into financial decisions has gained very little traction, claims Yager. “Big investment banks don’t tend to make things soft and fuzzy.”

Dhar even questions the effectiveness of some system resources like the many online investment tools available to consumers. Calculators project four, six, or eight million dollar targets for a retirement 30 years into the future. He says the timeframe seems intangible and the goals unattainable.

For consumers looking to navigate their way out or steer clear of the financial weeds, experts offer the following:

Take small steps to wealth. The only way to build up reserves is to do it gradually. Budget a realistic portion of your paycheck to start an emergency fund or return to the basics. “The best thing people raising families can do is go back to the old traditional practice of putting money in an envelope or a cookie jar,” adds Yager.

Be flexible. Think about what’s possible to mitigate a tight financial situation. Baby boomers tend to be fearful of change, particularly of moving to unknown places, says Yager. In fact, new locales both in and outside of U.S. borders can create wonderful opportunities that improve your quality of life.

Keep a minimum three-month reserve for savings. Learn to cut corners, live on less and shop in cheaper places.

Write it down. Take a financial fitness quiz then put your pencil to paper. You need to see the numbers then monitor your day-to-day situation.

For a FREE and anonymous online debt management tool, try 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!

If your credit score is not where you want it to be, try First Financial’s First Score Program, a low cost interactive session ($30) with a financial expert – which simulates your credit score using various scenarios.

First Financial also hosts free credit management and debt reduction seminars throughout the year, so be sure to check our online event calendar or subscribe to receive upcoming seminar alerts on your mobile phone by texting FFSeminar to 69302.**

Turn to professionals. Reviewing your savings situation and retirement potential with a professional financial advisor can help to ensure that all your future requirements are identified.

If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your brokerage, investments, and/or savings goals, contact us at 866.750.0100 option #6 or stop in to see us!***

Click here to view the article source, from FoxBusiness.com.

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. A First Financial Mortgage is subject to credit approval. See Credit Union for details. **Standard text messaging and data rates may apply.***Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC , a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

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