Steps to Improving Your Credit Score

Maintaining a good credit score is an important part of building your financial future. Not only does your credit score help lenders determine your credit risk, but it also affects the interest rates and fees you pay. Without a good credit score, you’ll have difficulty securing a loan or mortgage down the line. But don’t stress! If you take action to improve your credit score now, it will start increasing in no time.

What makes up your credit score?

Understanding your credit score is a crucial piece of planning your financial success. The bulk of your credit score is made up of your payment history (such as on time or late payments) and the amount owed. Additional factors include the length of credit, new credit (or the accumulation of debt in the last 12-18 months), and the type of credit.

What will hurt your credit score?

Maintaining a good credit score means being cautious with how your handle your money. Your credit score can be negatively impacted by:

  • Missing or late payments
  • Maxing out credit cards and shopping for credit excessively
  • Opening up numerous loans and credit cards in a short time frame
  • Closing credit cards out (as this could lower your available capacity)
  • Borrowing from finance companies

How to improve your credit score

Poor credit won’t haunt you forever, and it’s still completely possible to turn your credit score around! While there is no quick fix, there are long-term improvements you can make to help boost your score over time.

Here’s what you can do to better your credit:

  • Pay your bills on time – You may have to set a reminder on your phone so you don’t forget, but this is very important!
  • Pay off or pay down your credit cards. Come up with a payment plan that focuses on paying down the highest interest cards first, even if that means maintaining minimum payments on your other accounts in the meantime. The goal is to keep credit card balances low and pay them off when possible.
  • Don’t close credit cards – This may decrease your capacity, thus negatively impacting your score.
  • Slow down on opening new accounts as this approach could backfire and actually lower your credit score.
  • Contact a financial advisor or creditor if you’re having trouble making ends meet. They will help you better manage your credit and pay on time.

Don’t let your credit score stop you from bettering your financial future! Use our guide to managing your credit and getting out of debt for additional tips and resources, or stop into your local branch to speak with a representative!

How to Manage Your Credit Card During Difficult Times

Life can get expensive, especially during times like these. While your credit card has likely provided you with some additional freedom and flexibility lately, it’s important to remember that your credit card is not free money. You will have to pay it back eventually (and with interest)!

With U.S. credit card debt hitting an all-time high of $930 billion earlier this year, according to the latest data from the Federal Reserve Bank of New York, we could all probably use a reminder on how to effectively use and manage our credit cards. Here’s some important advice:

Try to pay your credit card off ahead of time.

There are many reasons you should always try to pay your credit card off ahead of time, but the most important is to avoid paying interest. Accounts that don’t run a continuous balance are given an interest-free grace period, which usually lasts until the next due date. If you can’t pay in full, be sure to pay as much as you can – in order to reduce your interest payments.

In addition to avoiding interest payments, paying your credit card off ahead of time can also help to improve your credit score – since it reduces the amount of your credit limit used. This, along with payment history – can account for the majority of your credit score.

Don’t strain your wallet.

You should avoid maxing out or spending anywhere near your credit limit, as it could cause long-term financial issues – like fees, debt, and damage to your credit score. A good practice is to use less than 40% of your available credit. Treat your credit card similar to a debit card or checkbook. If you don’t have the money currently or can’t save to pay it off later, that should be a sign that you really can’t afford to make a purchase.

Monitor your balance daily.

If you’re using your credit card for everyday purchases, it can be easy to forget how fast those daily transactions can add up. That’s why it’s crucial to regularly monitor your balance. One of the best ways to do this is to download your card’s mobile app. Also, be sure to set up daily or weekly account balance updates/notifications that can be sent directly to your phone or email. You can often do this right from the mobile app, or through your online account. Typically you can also set up monthly payment reminders here too.

Take advantage of your credit card rewards. 

Take full advantage of any rewards or benefits programs offered through your credit card. This can mean anything from retailer gift cards, cash back, electronics and airline miles. These perks can save you money! If you’re contemplating a new credit card, make sure to choose the credit card that best suits your needs and lifestyle – along with a low APR.

First Financial has great credit card options, lower APRs and no annual fee.* 

Let us help you find the right card for you! Check out our website or give us a call so we can answer any questions you may have. Or if you like what you see, you can apply online 24/7!

*APR varies up to 18% when you open your account based on your credit worthiness. These APRs are 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 Fees. 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 Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties.

Article Source: Jackson Bolstad for CUInsight.com

 

3 Credit Score Tips During COVID-19

COVID-19 will undeniably have an impact on consumers’ lives and finances in the coming months. Now is a critical time for people to take the appropriate actions to protect and monitor their credit. How can you keep your credit score in check during this time? Keep reading.

Review your credit score and report regularly.

Monitoring your credit score and report is just as important as monitoring your account balances. Noticing a sudden drop in your bank account balance without any action on your part, is a major indicator that there could be fraudulent activity on your account. The same goes for your credit. Do a monthly review to ensure that all the information on your credit report is accurate, and immediately dispute anything that is incorrect with the credit bureaus – before it has a negative impact on your credit score. It’s best to be proactive!

Sign up for a credit monitoring service.

It’s important to have a credit monitoring service working behind the scenes for you, and in between any periodic reviews. A credit monitoring service will immediately notify you of any unexpected changes or activity that could negatively impact your credit. In today’s world, these alerts are typically in real-time – giving you the ability to stop any fraudsters as soon as possible. Growing unemployment and financial strain during this time will increase fraudulent activity around the globe, and could also up your chances of being hacked or scammed – so please stay on top of your credit report.

Monitor your rates to find more savings.

It’s always recommended to have a rainy day fund for times like the present. Could savings be hidden in your auto loan with a refinance or using the equity in your vehicle (cash out auto loan)? Rates are at historic lows, which means it’s the perfect time to revisit the interest rates you are paying. If you live, work, worship, volunteer, or attend school in Monmouth or Ocean Counties in NJ – contact us to inquire about refinancing your credit card debt into a fixed low-rate personal loan. An auto or mortgage refinance can also often shave dollars, sometimes hundreds – off your monthly payment.*

Staying on top of your credit is important to do for both yourself and your loved ones. Your current credit decisions will have an impact on your finances for years to come. A late payment can stay on your credit report for up to seven years and costs the average person hundreds, if not thousands more in interest. Check out our credit management guidebook, be sure to review your credit report – and if you have questions, reach out to us! We are here for you.

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. A First Financial membership is required to obtain a First Financial loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. Current loans financed with First Financial FCU are not eligible for review or refinance.

Article Source: Chris Fraenza for Savvymoney.com

Ways to Protect Your Credit Cards

If you’ve ever been a victim of identity theft, you know it’s awful. Between the time it takes to get everything corrected and the stress it causes – it’s definitely a spot you’d like to avoid if you can. Though nothing is fool proof, there are several ways in which you can protect your finances. Here are a few that pertain to keeping your credit card information safe from fraud.

Secure all your cards: If your wallet is ever stolen and you lost every card, think about what a nightmare it would be to have to cancel and replace them all. Really consider this the next time you leave home. Try to only take the cards you absolutely need and keep the rest in a secure location like a safe or locked drawer. Try to also minimize the amount of cash you have on you as well and only bring what you need. This way if your wallet gets lost or stolen, you aren’t literally losing everything.

Pay attention: It might be difficult to keep track of a criminal’s activities in real-time, but you can check on your accounts regularly. Today’s smartphone banking and credit card apps really make it easy and fast to check on all your accounts and look for fraudulent transactions. If you’re keeping track of your spending and looking at your accounts daily, you’ll know the minute something happens that looks out of the ordinary. Checking on your accounts every day also helps you monitor your monthly budget and spending habits too.

Opt for being more high-tech: Have you ever used your smartphone’s digital wallet? Many retailers are set up to take payments via Apple Pay and Google Pay, and it’s very easy to use. EMV chips in your credit and debit cards also make transactions more secure and prevent card skimming as well. When shopping online, if PayPal or your phone’s digital wallet are options for payment over entering your card number – always go that route.

Using the above tips can help protect your financial information and really save you from an identity theft headache. Also be weary when using an ATM or paying for gas at the pump – be sure to check for any skimming devices before inserting your card. If something seems off to you, it probably is. Read about how to spot a skimming device in our guidebook here.

T.H.I.N.K First because There’s Harm In Not Knowing!

Article Source: John Pettit for CUInsight.com

Is a Rewards Credit Card Right for You?

Believe it or not, there isn’t a “one size fits all” credit card rewards program. For every card on the market, it seems like there are hundreds of different ways to earn rewards.

With all the options, the research can be overwhelming and you might not know where to start. Have no fear, because we’ve come up with a few ways you can choose the right credit card rewards program for you!

Is a rewards card right for you?

That’s the first question you need to ask yourself. A rewards card isn’t right for everyone. Here’s a handy checklist to help you decide whether or not a rewards credit card is a good fit for you:

  • You have a good credit score. Most card issuers are looking for consumers who have a FICO score of at least 670. Of course, a higher credit score will help you get a lower interest rate, but a that mid-600 range will get your foot in the door. FYI, the higher your credit score, the more lucrative rewards programs you’ll most likely have access to.
  • You can pay off your balance every month. Rewards cards sometimes have a higher-than-average interest rate. When you carry your balance over each month, you could end up paying more in interest charges than you earn in rewards.
  • You can maximize the value of your rewards. A rewards card can cost you money if you don’t maximize your reward-earning potential. If you don’t earn enough points, you can actually lose money if your card has an annual fee.

Now that you’ve determined if you could benefit from a rewards card, let’s talk about choosing the card with the program that best suits your lifestyle and spending habits.

Choosing the right card.

There are three main things to consider when choosing a card: your spending habits, personal preferences, and your credit score. If you don’t look at your spending habits and personal preferences, you could end up spending a lot of money and racking up rewards that aren’t right for you.

Let’s say you have a large family and your primary expenses are groceries and gas. It would make sense for you to have a credit card that offers bonus rewards on those types of purchases. But, if you’re single, have a small grocery budget or don’t have a car, those rewards wouldn’t make sense for you.

Use your cards for everything.

The more you use your card, the more rewards points you’ll earn. But, don’t let that be an invitation to start spending money on things you don’t need. Instead, use your credit card in place of cash or your debit card whenever possible.

Start looking for everyday situations where you can use your credit card instead of another payment method – gas, groceries, food, etc. But, always make sure you only spend what you can pay off every month.

What if a rewards card isn’t for you?

Rewards cards aren’t for everyone, and there’s nothing wrong with that. Maybe your credit score isn’t in the right range for a rewards card at the present time, or maybe you’re not interested in using your card to gain rewards. Maybe you’re just looking for a credit card for emergencies only.

Let us help you find the right card for you! Check out our website, stop by and talk to us or give us a call so we can answer any questions you may have. Or if you like what you see, you can apply online 24/7!

 *APR varies up to 18% when you open your account based on your credit worthiness. These APRs are 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 Fees. 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 Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties.

5 Ways You Should Never Use Your Credit Card

We all know that credit cards can be a valuable tool. They can help you build credit when you’re just starting out, and can really benefit you in the case of a spending emergency. However – if you’re not careful, they can do more harm than good. When it comes to spending, here are five ways you should really never use your credit card.

To help you feel better: Yes, a new purchase can cheer you up, but if you’re looking to feel better – a mountain of debt probably will only make things worse in the long run. If you feel the need to splurge, use whatever cash you have in your wallet or make sure you’re spending from your checking account using a debit card instead.

Hospital bills: Credit cards are best to use on a purchase that you can pay off quickly. Medical bills typically aren’t small, so be sure to think about how long it could take you to pay off that amount of debt. This type of debt can quickly build up, being that you are probably paying a pretty high interest rate each month.

A cash advance: If you’re in a pinch, you might think taking a cash advance from your credit card is a good idea. However, you should first consider other options before going down this road. A cash advance may seem like a good option, but it may carry a higher interest rate than your normal credit card. You may want to do some digging into the fine print in your account disclosures before considering this.

Paying for college: This is probably one of the worst things you could ever put on a credit card. You may not be thrilled about student loans, but those usually come with much lower interest rates than a credit card ever could. If you’re having trouble paying for school and you don’t have a full time job yet, you may be sitting on this debt for years – if it’s on a credit card. It would not be a wise decision to begin your financial future with thousands in credit card debt.

To help start a small business: It’s great to follow your dreams, and if starting a small business is one of them – wonderful. However, charging your business equipment to a credit card is not the best idea. Try looking into a small business loan instead, rather than purchasing items on a higher interest credit card. No one wants to think about it, but what happens if your small business doesn’t make it and you’re still paying off thousands on equipment you can no longer use?

If you are looking for higher credit lines, lower APRs, no annual fees, no balance transfer fees, a 10-day grace period, rewards (cash back or on travel & retailer gift cards), an EMV security chip, and more, check out First Financial’s Visa Credit Card options. Click here to learn more and apply online today.

 *APR varies up to 18% when you open your account based on your credit worthiness. These APRs are 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 Fees. 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 Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. No late fee will be charged if payment is received within 10 days from the payment due date.

Article Source: John Pettit for CUInsight.com