Posts on Oct 2018

Fact vs. Fiction: What Really Impacts Your Credit Score?

A white“Facts matter” pin on a black backpack on a person's back

When it comes to credit scores, it can seem like everyone’s an expert. Ask a random group of people what factors affect your score the most, and you’ll likely get a different response from each person. And the most frustrating part is they’ll probably all be right—and wrong.

Credit scores are calculated based on a variety of factors, so they tend to feel like a secret code. Fortunately, this code is easy to crack. All you have to do is separate fact from fiction. Once you understand the specifics of how your score is determined, it will be easier to sort through all the misinformation.

Focus on the Facts

There are three primary credit reporting bureaus—Equifax, Experian, and Transunion, but the most trusted credit ratings come from the Fair Isaac Corporation (FICO). While some lenders and creditors look at a combination of scores from the various reports, the FICO score is widely considered the most reliable. According to FICO experts, your credit score is calculated based on five main categories:

  1. Payment history (35%) – Creditors want to be sure of two things: You pay your bills, and you pay them on time.
  2. Amount owed (30%) – To maintain an ideal credit score, aim to keep your overall debt under 30% of your total available credit.
  3. Length of credit history (15%) – Lenders want to see consistency in credit management. This category looks at how long you’ve had established accounts. The longer, the better.
  4. Credit mix (10%) – Credit scores factor in a wide range of accounts, from credit cards and retail accounts to mortgages and installment loans.
  5. New credit (10%) – Opening new credit accounts isn’t always a bad thing but applying for several all at once can have a negative impact on your score.

 

Six Common Credit Score Myths:

Checking your credit hurts you. – When you apply for a new loan or credit card, the lender runs a credit inquiry. Too many of these inquiries in a short period can cause your score to dip. However, checking your own credit doesn’t damage your rating. In fact, many credit card companies allow account holders to view their FICO scores for free because regular monitoring is an effective way to spot fraudulent activity or identity theft.

Your income level matters. – While your income certainly influences your ability to pay your debts, it doesn’t factor into your score. Credit reports may list your current and former employers, but that information holds no bearing on your score.

Your education or occupation is important. – It doesn’t matter whether you went to an elite university, community college, or dropped out of high school. Your credit score measures your ability to manage debt, not your educational pedigree. Same goes for your job. Gainfully employed, under-employed, or unemployed, you can still build a good credit score.

Closing a credit card will help your score. – Even if you pay off a credit card, closing the account can hurt you more than it helps. If you’re worried that you might misuse the credit, destroy the card—but keep the account open. The available credit and length of credit history will reflect positively and help you in the long run.

Quick fixes can help bad credit. – Yes, it is possible to improve your credit score—but you don’t have to pay someone else to do it for you. Because most credit repair relies on sensible, strategic steps applied over time, you can handle it on your own. Rather than paying a credit repair service, use the money you save to bring past due balances up to date or pay down your overall debt.

Avoiding all debt will help you keep a good credit score. – Your credit score is a metric that measures your ability to manage credit—not avoid it. If you don’t have any credit accounts, there’s nothing to measure. That being said, just because you qualify for credit doesn’t mean you have to max it out. You’ll help yourself more by using your credit strategically and paying off your balance each month.

While this list covers some of the most common credit score myths, there are countless others. By focusing on the facts and ignoring anything that doesn’t line up with them, you’ll find it easier to manage your credit with confidence.

Three Simple Suggestions for a Budget-Friendly Halloween

two skeleton near white concrete building with string lights at daytime

Think back to when you were a kid. What was your favorite thing about Halloween? Was it the costumes? The candy? The spooky decorations around your neighborhood? All the above? Now, think about your little ones. Which Halloween traditions excite them most? There’s a pretty good chance they love the same things you did.

That timeless trio of candy, decorations, and costumes account for more than 80% of Halloween spending. How much do people actually spend on Halloween? According to a National Retail Foundation survey, Americans spent an estimated $9.1 billion in 2017, and the number is expected to top $9 billion again in 2018.

From shopping for the newest costume to overspending on premium candy for trick-or-treaters, it’s easy to get caught up in the fright-filled fun and spend more than you intended. So, how do you give your little ones a Halloween filled with fantastic childhood memories without blowing up your budget in the process? We’ve got a few ideas.

Three Tips for Saving Money This Halloween

By following these tips, you can save money on candy, decorations, and costumes and help your kids enjoy a Halloween that’s a little less trick and a lot more treat:

Candy

Based on the survey mentioned above, a whopping 95% of Americans plan to buy candy this Halloween. If you’re looking for easy ways to save, steer clear of the brand name selections and buy in bulk. If you’re trying to be that house, the one all the kids talk about because you’re the ones that give out the “good stuff,” be sure to scan local sales and be patient. Stores will often discount candy on Halloween morning. A little last-minute shopping can give you the chance to get more for your money.

Decorations

Hosting a Halloween party for your friends? Instead of rushing out to a specialty store and buying elaborate displays and mass-produced trinkets, add a personal touch by letting your kids design decorations of their own. You may not win any neighborhood decorating contests, but your children will love showing off their handiwork to all their guests! Need some suggestions to get your family’s creative juices flowing? The home decorating experts at HGTV can help you scare up a great idea!

Costumes

When it comes to finding great deals on Halloween costumes for your children, thrift stores are your friend. If you shop early enough, many second-hand stores will have a selection of costumes that were only worn once or twice before the previous owners outgrew them. If you’re getting down to crunch time and you don’t have your kiddo’s costume figured out, Pinterest is a great place to find creative DIY ideas. And if your costume design project doesn’t turn out as perfectly as you hoped, don’t worry—nobody will notice because trick-or-treating happens in the dark!

Now, before you get carried away with crazy ideas about how to spend all the money you saved this Halloween, remember, Halloween savings can help ease the financial stress of Christmas shopping. That’s right, Christmas shopping. Once Halloween is over, there are only 54 shopping days until Christmas. Now, THAT is scary!

Financial Fitness Helps More Than Just Your Money

Woman in work out gear stretching her right shoulder.

When you hear the word “fitness,” what comes to mind? Gym memberships? Weights and treadmills? Lean, muscular athletes? Credit unions? If that last option seems out of place, it’s probably because your brain automatically equates fitness with optimum physical health. When you consider the global health and wellness industry generated more than $3.4 trillion last year, it’s easy to understand the tendency to think that way.

According to dictionary definitions, fitness refers to the ability to accomplish a specific task or purpose. With this perspective, it’s clear that physical fitness and financial fitness have some commonalities after all. Both types of fitness provide a wide range of personal benefits. Accomplishing goals in either area requires consistent effort, experienced guidance and efficient tools.

Consistent Effort — Fad diets and miracle cures will never lead to lasting physical fitness. Taking definitive steps toward an established goal is the key. This principle applies to finances as well. From budgeting to saving to investing, following healthy financial habits on a consistent basis leads to long-term success.

Experienced Guidance — Have you ever gone to a gym for the first time and wondered how to set your goals or structure a quality workout plan? If so, you know how valuable an experienced coach or trainer can be. That’s where Great Meadow FCU comes in. With our team of experts, it’s easy to find a financial coach who can help you set goals and create a plan to accomplish them. And the best part? We don’t charge for it like the gym does.

Effective Tools — When you’re working toward a physical goal, the right equipment can make all the difference. If you’re trying to increase your flexibility, a basic yoga mat should be enough. If you’re trying to improve your bench press, you’ll need a barbell and bench.

Depending on your financial situation, your needs might range from budgeting help and savings accounts to business solutions and investments options. GMFCU offers the perfect blend of products and services to help you accomplish your goals.

On the surface, physical fitness and financial fitness may seem like separate subjects. But science has shown that being balanced and healthy in one area affects the other areas of your life. Thanks to this overlap effect, there are benefits to your physical well-being when you are financially healthy. Start enjoying the benefits.

Uber Looks to Change the Travel Game. Again.

man driving vehicle with GPS system turned on

Visiting new places is fun. Feeling like a tourist is not.

With the upcoming release of the Uber Local service, Uber is doing all it can to help you feel at home no matter where you travel. The popular ridesharing service has been solving transportation challenges across the world since 2009, and now they’re stepping up their game to help travelers feel more like locals when they’re away from home.

Real-time data enables personalized service.

When you consider the fact that Uber boasts more than 40 million monthly riders, you quickly realize the company compiles massive amounts of travel-related data. Pick-up points. Drop-off locations. Commute times. Time of day. Average mileage. The list goes on. But rather than being content to let all that information sit in a server and gather figurative dust, Uber Technologies Inc has decided to leverage the data and help riders find current hot spots and popular points of interest.

In a recent interview, Alex Otrezov, Uber’s Head of Search and Experimentation, explained the goal of Uber Local by stating, “We use real-time data of our trips, obviously in an aggregate way, to show the hot spots to show where most Ubers are dropping people off. Whether points of interests or restaurants, whatever it may be, we want to make sure that we share that data with our users.”

Make your Spring Break even better with Uber.

With Spring Break just around the corner, you might be one of the millions making plans to get away for a few days. Whether you’re heading to the big city or the beach, there’s a good chance an innovative product like Uber’s personalized operating system would make it easier to find local points of interest that used to require knowing someone who lived in the area.

Once Uber Local officially hits the market, you won’t need to “know a guy” to find trendy NYC restaurants or track down the hottest events in Daytona Beach. All you’ll need is Uber. By utilizing mountains of transportation data and the latest A.I. technology, the world’s most popular ridesharing service will deliver a user-friendly service that tracks shifting trends, provides up-to-the-minute recommendations, and lets you travel like a local.