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

3 Bad Choices that Could Damage Your Credit Score

Your credit score is a big deal. That number decides what kind of loan you’ll be able to get and what interest rate you’ll have to pay. If your credit score is low, you’ll need to find ways to raise and improve it. If your score is good, here are three things you may want to avoid in order to maintain your high credit rating.

Cosigning a loan: You’re a nice person and you do nice things for people you care about. In reality, you should really never cosign someone else’s loan. If the borrower starts missing payments, your credit score will take a big hit. The last thing you want to do is be on the hook for someone else’s car payments, personal loans, or credit cards.

Closing a credit card account: Maybe you have a credit card that was just used to build credit or have in case of emergencies. You may have paid if off and decided to stop using it, but be sure you don’t close that account. That card’s credit history is good for your credit score. Also, closing the account will lower your amount of available credit which could negatively affect your debt utilization ratio. Closing a credit card account is one action that can damage your credit score in two different ways.

Not looking for errors: Always keep a close eye on your credit score. If you haven’t looked at yours recently, check out annualcreditreport.com. If you don’t keep an eye on your credit report, you could have your identity stolen and not even know it. Even if isn’t the case, there could still be inaccuracies. The day you find an error on your credit report that is negatively impacting your score, is the day you’ll be extremely happy you checked.

If you’d like more insight into your credit score and managing your credit – view our credit and debt management guide here.

Article Source: John Pettit for CUInsight.com

Millennials: How You Can Avoid Credit Pain

bigstock-Young-Business-Man-Under-Stres-89718578-e1446206462272Millennials think they know a lot about credit. But the numbers tell a different story.

More than 7 in 10 millennials said they feel confident about their credit knowledge, according to a recent survey by Experian. If fact, millennials on average estimated they had a score of 654. But it turns out that for many 18-to-34-year-olds, even that was an overestimation. And millennials are less likely to check their credit reports, Experian said.

Here’s how it works: Thirty-five percent of your credit score is determined by your payment history, or whether you have made payments on time, 30% is your credit utilization, or the amount borrowed compared to the total credit available, 15% is determined by the length of your credit history, 10% comes from the number of applications for new credit and 10% is from the types of credit you have (i.e. revolving, installment, mortgage etc.).

Generally, credit companies prefer a mix of credit because the variety suggests you know how to use credit responsibly. A combination of car and student loans along with some credit card use, for example, helps build up your credit score as long as you pay on time over an extended period.

Scores range from 300 to 850. If your score is above 750, you’re considered to have excellent credit, which paves the way to the lowest interest rates and a better chance of getting approved for loans. If your score is on the lower side, it can cost you — that means higher interest rates on everything from credit cards to auto loans.

Here’s the breakdown:

800+ = exceptional
740-799 = very good
670-739 = good
580-699 = fair
Below 580 = poor

Financial advisors warn that a bad score may even hurt your chances of getting a job. Employers have access to your score and can factor it in to their decisions. Your credit score is a reflection of you and if your credit is bad, it could inject some doubt about your ability to handle personal matters and business matters.

With a lower score – you may still get a loan, but you will likely have to put more money down as a down payment and pay a higher rate, which can be costly.

For example, having a score of 650 versus 760 can cost you $125 more a month on a 30-year fixed rate mortgage for a $200,000 loan, according to credit tracking firm CreditSesame.com. That’s $1,500 more a year, or $45,000 over the life of the loan.

You are entitled to a free report from the three credit bureaus (Experian, Equifax and TransUnion) once every 12 months from annualcreditreport.com

Experts suggest checking your report regularly. Once a year is sufficient to get a gauge on your number, and check for any errors, like an incorrect payment status or delinquencies that have since been remedied.

Remember to keep an eye on the debt-to-limit ratio. What you borrow compared to the total credit available, also known as your debt utilization ratio, counts for a whopping 30% of your credit score. A debt utilization ratio greater than 30% will have a negative effect.

If you are borrowing too much, start a debt repayment plan to lower the ratio as much as possible.

Ideally, credit cards should be paid in full at the end of each payment period to avoid sky high interest. Paying in full each month also demonstrates that you are a responsible borrower. This will help build up good credit and save you money since the faster you pay down debt, the less interest you’ll pay.

Even if you don’t pay off all of your debt right away, make sure you are always paying on time. Set up automatic payments to avoid late payments. A missed payment will also hurt your score.

Ultimately, a credit score is one of the most important numbers you have. In the long run, a bad score could raise the cost of a car or home loan, increase you credit card interest from a single digit to double digits or even deny you credit entirely.

Not only does a good credit score save you money by lowering interest rates, it’s a reflection of you and your personal matters. So it is worth putting in the time to build up a good report. A credit score is one of the building blocks of your financial future and that has a big bearing on your entire life.

*Original article source written by Landon Dowdy of USA Today.

3 Sneaky Things Hurting Your Credit That You Can Easily Fix

Credit-ReportWhen it comes to understanding your credit, it can feel as complicated as trying to solve a Rubik’s cube. Frustrated by this confusion, many consumers neglect their credit, which can have a devastating impact on their financial futures.

A Consumer Action study recently revealed that 27% of Americans have never checked their credit report. That’s alarming, because it’s estimated that a large number of consumers have errors on their credit reports that could damage their credit.

Here are three things that could be hurting your credit:

1. Wrong Information

The wrong personal information on your credit report could hurt your credit. This could be things like your name misspelled, your incorrect home address, where you’ve worked in the past or even your Social Security Number listed incorrectly. How does a wrong address hurt your credit? Your information may be mixed up with someone else’s, especially if you have a common name, or are a “Jr.” or “Sr.” Or it could indicate identity theft — and that could really wreak havoc with your credit. By reviewing your credit report, you’ll be able to quickly see if there’s any information that needs to be updated or changed.

2. High Balances Compared to Limits

Another sneaky thing that could hurt you is your credit card balances — even those you pay in full. How can a credit card that you pay off hurt your credit? Issuers typically report your balances as of the statement closing date. But then those cards aren’t due until about a month later. So in the meantime, the balance on your reports may look high in comparison to your credit limits.

Generally you want the balance on each card to stay below 20 to 25% of your available credit. If you have a retail card with a small limit or a rewards card that you use to pay for everything to earn points, then this factor could come back to haunt you.

So you need to either pay your charges off before the statement closing date or ask for a higher credit limit. Of course, a higher credit limit should not be an invitation to overspend. You won’t improve your credit scores if you get in over your head with debt!

3. Outstanding or Delinquent Bills

The third sneaky thing that could hurt your credit score could be outstanding or delinquent bills. You’ll want to make sure you check your credit report to make sure that you have no outstanding bills or any delinquent bills that you need to get addressed.
Review your credit report and make sure you’re not being marked for anything delinquent that could be damaging your credit. This could be things like former gym memberships, old credit cards, or even medical bills.

*Article Source Courtesy of Jeff Rose of Daily Finance Online