It can be daunting for any parent to give new responsibilities to their children, whether it is giving them their own car, full access to the internet or cable, or trusting them while they are out with friends. Similarly, giving your teen the responsibility of a credit card is a task that requires careful consideration. The big question here is if teenagers be allowed to carry a credit card? Continue Reading…
We’re pleased to share the following information from our friends at BALANCE Financial Fitness to help you understand and navigate the Equifax Data Breach.
As you are probably aware, there has been a data breach, this time from Equifax. Reportedly, hackers may have accessed personal information from 143 million Americans, including social security numbers, birth dates, addresses, and in some cases driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people. Continue Reading…
According to CNN.com, nearly 80% of American taxpayers get a tax refund. We’re hoping you’re getting a refund this year! Whether it’s a little or a lot, every penny/dollar counts/helps. Many people reserve this money for vacations, padding for their savings, the purchase of a new car or home, and more. Continue Reading…
Today, every financial institution charges interest to borrowers as a return for lending money. The amount you borrow (the principal) + interest + length of your loan (term) = your total cost of credit.
Let’s assume two people borrow $20,000 for five years (60 months) to purchase a vehicle. Borrower #1 has a high credit score, allowing them to have a lower interest rate. Borrower #2 has a lower credit score, which will make their interest rate much higher:
At 2.9% interest, the first borrower will pay a total of $21,509.62 for this vehicle by the end of the loan.
At 14.9% interest, the second borrower will pay a total of $28,487.49 for this vehicle by the end of the loan.
Based on this example, you can see that not taking care of your credit comes at a large cost. By simply taking care of your credit you would save nearly $7,000!!
Once you have obtained your credit report, the first section to review is your personal information. Be sure your name, address (past and present) and social security number are correct. If there is an error, contact the credit reporting agency that is reporting your information incorrectly.
The next section of your credit report that you should review contains your credit score (if you ordered a report from a credit bureau) and the factors of your credit score. There are several factors credit reporting agencies consider when determining your score. Some of the more common factors include:
Serious delinquency and Public Records Filed – This would appear if you have collections, charge-offs, bankruptcies or judgments.
Ratio of balance to limit on revolving accounts too high – This appears when your credit card balances are close to the limit. There are not many factors that can affect your score in the short-term other than this one, especially if you have more than one card near the limit. Keeping your credit card balances at 20% or less of the limit every month is your best bet if you want to ensure this factor doesn’t affect your score. Continue Reading…
As we previously mentioned in Part 1 and Part 2 of our Credit 101 series, not all credit scores are created equal. What does that mean? The credit score you receive from Equifax will be different than the one you receive from Experian or TransUnion. Then there is your FICO (Fair Isaac Corporation) score. This is the most commonly used credit report by lenders and since they have their own “scoring system,” it will be different from the other three.
Just as your score will be different in each credit report, the agencies each have different score ranges: