SafeAmerica Credit Union

Credit Report

• By Kevin Alvarez

Credit Reports – How to Get Your Annual Credit Report

How to Get Your Free Credit Report

The Fair and Accurate Credit Transactions Act of 2003 (FACT Act) entitles you to receive a free copy of your credit report once a year from each of the reporting companies – Equifax, Experian, and TransUnion. The three companies have set up one central website, toll-free telephone number, and mailing address. You can request your free report either online, by phone or even mail by visiting www.AnnualCreditReport.com or calling 1-877-322-8228.

Should Consumers Order All Their Credit Reports at Once or Space Them Out Over 12 Months?

It is entirely your choice whether you order all three credit reports at the same time or order one now and others later. If you request all three at the same time, you can compare them, however you won’t be eligible for another free report for 12 months.  On the other hand, if you space them out, (for example, requesting one report every four months), you can keep track of any changes or new information that may appear on your report. If you order from only one company today you can still order from the other two companies in the future.

Consumer Alert! Beware of Ads Claiming "Free" Credit Reports

Many other websites claim to offer “free credit reports, free credit scores, or free credit monitoring.” But, be careful.  Their claims of “free” are not always no cost. These sites are not part of the official, government-mandated annual free credit report program. In most cases, these sites will provide you with a free credit report and score, and they will attempt to enroll you in some type of credit monitoring or protection service. Before signing up for such a service, do your research and determine if it’s something that you really need. The Federal Trade Commission has received complaints from consumers who thought they were ordering a free annual credit report, but instead paid hidden fees or agreed to unwanted services. Don’t be fooled by misleading TV ads, e-mail offers, or online search results.

Other Situations That Warrant Getting a Free Credit Report

Under federal law, you may be entitled to a free credit report if a company takes “adverse action” against you such as denying an application for credit, insurance, or employment, based on information in the report. In addition, other circumstances include unemployment, receiving welfare benefits, and any report of fraud (including identity theft).

Is it Important to Review Your Credit Report Frequently?

Yes, absolutely! The information in a person’s credit report is used to evaluate applications for credit, loans, insurance, and employment. Therefore, making sure that your information on your credit report is accurate and up-to-date is very important.

It may be helpful to go over your credit report with one of our financial wellness counselors.  Call us to get started today.

GreenPath Financial Wellness

• By Kevin Alvarez

Five Steps to Prepare for a Big Purchase

A financial journey typically includes several twists and turns – such as understanding how to manage spending, build savings and control debt. There might be “speed bumps” in the form of unexpected changes in income.
Along the way, you might also navigate milestone purchases such as financing a home or car. When considering a big purchase, the destination is within reach when you steer through the following five financial steps.

1. Look at Your Financial Picture

Start by considering what you can afford given your current income, expenses and other debt obligations. Get a handle on how much money comes into your household each month, and where the money goes. Make sure to consider your net income-what is available to you after taxes. Use Greenpath's Budgeting worksheet to calculate your monthly expenses and income to get an idea of what you have to work with, what your commitments are, and what they have remaining to devote to their goals.

For Homebuyers

When purchasing a home, a common rule of thumb is to spend about 30% of your monthly gross income on housing. That includes costs like mortgage principal and interest, property taxes, insurance and maintenance.

For Car Payments

A general rule of thumb is to keep total monthly car costs at about 20% of monthly take-home pay.

2. Check Your Credit Score and Report

Checking your credit score and report is key when considering a big purchase like a home or car.

Pull your credit report from AnnualCreditReport.com and follow the additional instructions to see your current credit score–which influences your overall cost of financing your purchase. The lower your credit score, the more likely you will have a higher interest rate and greater overall cost.

Tip:

Be sure to check your report for accuracy. Resolving errors or incorrect information often helps increase your credit score, giving you more attractive financing options. If the report is inaccurate, file a dispute with the credit bureau. Make sure to check all three bureaus, as sometimes one has information that the another does not. Before making a big purchase, it's important to fully vet (and make sure toy understand) your financing options.

3. Research Your Financing Options

For a home purchase, that means giving yourself enough time to explore mortgage options including types of mortgages, terms, fees, interest rates and other information. Consider getting a preapproval or prequalification letter from a lender, especially in a competitive market with low housing inventory.

If you’re looking to finance a car or other big purchase take inventory of the most competitive loans offered by the dealership, credit union, bank or other lender.

Also be sure to read through any fine print: for example: Is there a pre-payment penalty if you pay your loan off earlier than expected?

Tip:

When conducting your research, remember to use trusted, unbiased information sources, rather than depending upon advice from someone who might benefit from your choice.

4. Plan Your Purchase

Timing is everything, and having a plan in place for when to pull the trigger can make all the difference. Do you have enough in savings to provide a good down payment on a home or car? Is there a certain time of year that special financing or promotions are generally available?

Now’s also a good time to find someone you trust to help you carry out your big purchase – if you’re buying a home, ask friends or families for a real estate professional they can refer.

Having someone in your corner who can help you to understand your options and know warning signs to look out for can make all the difference. For a car purchase, do you feel like the dealership is able to provide advice and guidance? Have you taken the time to research vehicle make and model from a reputable source of information?

Tip:

This is also the time to get your documentation in order, like proof of employment, insurance or other financial information.

5. Make the Deposit

Finally, get ready to make an earnest money deposit for your purchase. In the case of a home purchase ,which indicates you are a serious buyer. Generally, earnest money deposits range from 1% to 2% of a home’s purchase price and are only refundable under specific circumstances.

For a new car purchase, deposits typically total about $500 once you agree to the vehicle price in writing.

Tip:

Make sure you understand whether the deposit is refundable before making a purchase - especially if you think you may change your mind later.

The Journey Ahead

While not an exhaustive list, these steps should help prepare for the financial road ahead. As you travel along your financial journey, take advantage of financial counseling and guidance provided by the trusted national
nonprofit GreenPath Financial Wellness.

To help spread the knowledge, read our Understanding Financial Terms blog post to become even better equipped to make any of your upcoming big purchases.

GreenPath Financial Wellness

• By Kevin Alvarez

Free Webinar: Family Lessons About Money

Register Now

This free, one hour webinar about Financial Transformation is presented by GreenPath Financial Wellness

Join us for a lively discussion about tips, challenges, and resources needed in order to raise financially healthy kids. Be part of our audience for our live podcast, Real Stories: Journeys of Financial Wellness. Our panel will feature GreenPath clients who are inspiring their children to be financially resilient. We'll also chat with Professor Bernard Dillard. Come along with GreenPath Financial Wellness for an enlightening session on how we might support the next generation in their financial in their financial wellness journeys.

Who should attend

  • Parents who would like to learn from others' experiences about kids and money
  • Anyone who wishes to mentor a young person about money
  • Teens or young adults who wish to jump start family conversations about money

What You'll Learn

  • How to communicate with your kids about money
  • How to overcome family financial challenges
  • About resources to share with your family and community

Details

Date: Wednesday, July 28, 2021

Time: 10:00 am PST - 11:00 am PST

Register Now

• By Kevin Alvarez

What Influences your Money Habits?

Information brought to you by our partner, GreenPath Financial Wellness

When our financial counselors speak with members about specific challenges they might be facing, it can be helpful to have a conversation about the factors that influence money habits and behaviors. 

From family experiences to other factors such as the media, a range of influences shape our views of the world – including the money habits we put into practice each day. 

Whether we have patterns of spending, saving, investing or even budgeting, these habits are usually shaped by our past experiences. 

As the webinar highlight notes, there are three key influences when it comes to money habits:

Family

How we regulate to finances is very much related to what we experience in our families, and the money lessons people experience across generations.

Perhaps our parents were not comfortable spending money and had a distrust when it comes to taking on debt. Or maybe we witnessed a family where there was a high tolerance for spending and taking on loans for purchases both big and small. whether we were in families that were big spenders or big savers, or somewhere along the spectrum, many people can identify with the role their family's played in their money habits.

Media

Movies, television shows and social media often romanticize the appeal of beautiful homes, nice cars, new gadgets, and brand-name clothing and jewelry. The media plays a big role in emphasizing the desire to have the latest and greatest of everything - despite the realities of our financial situation.

While the entertainment industry is a big part of our media diets, our social media feeds serve up a never-ending stream of photos and updates showing off expensive vacations, cars, elaborate events and more. As a result, many of us are tempted to "keep up with the Joneses" and by ramping up our spending. This is a significant influence on our money habits.

Culture

Attitudes and perceptions about how we handle our money are also influenced by the larger culture. For those living in a culture of consumption, the "buy now, pay later" philosophy is everywhere. For those in a culture that puts an emphasis on economic restraint, that philosophy and influence is likely quite different.

While cultural influences affect how we view money, we also have the power to choose how we interpret cultural exceptions. Many people turn the "conspicuous consumption" influence into a positive effect to encourage good money habits. They might see the cultural behaviors as life lessons on what not to do.

Know Your Money Habits

Where do you stack up when it comes to money habits - especially when it comes to credit card debt?

All told, knowing your money habits is a good step towards financial health and wellness. If spending is getting out of hand, for instance, due to the pressures of keeping up with a friend's social post, it might be time to slow down and take a hard look at spending.

Take the next step - check out the educational course - Redesign Your Money Habits

Learn More

• By Kevin Alvarez

The 5 Factors That Affect Your Credit Score (And Simple Ways to Boost Them!)

Information is brought to you by our partner, GreenPath Financial Wellness

Whether you’re looking to get your first credit card for everyday expenses or take out a mortgage to purchase your first home, credit is an essential tool for helping people to meet their financial goals.

When applying for a line of credit, the higher your credit score, the more likely you will be to qualify, and the more options you will have available to you.

Here, we’ll breakdown the 5 factors that affect your credit — in order of most heavily weighted to least—and the simple  yet effective steps you can take to give your score a boost.

Understand Your Current Credit SnapShot.

Federal law requires each of the three nationwide consumer credit reporting companies -Equifax, Experian, and TransUnion -provide you a free credit report every 12 months if you ask for it. While these reports don't contain your actual score, they can be very helpful in identifying what might be affecting it (as well as any inaccurate information that may need correcting). Request yours at annualcreditreport.com.

1. Payment History (35%)

Payment history is the biggest single factor used to calculate your credit score. Late payments (even a couple of days), past due accounts, and accounts in collections all have a negative impact on your credit. Regular, on-time payment of the minimum amount (or greater) will improve your credit score. A non-time payment history in the range of 18 months or longer will begin to show results in a growing credit score.

Set up automatic payments.

If your late payments are due to forgetfulness, this is the easiest way to ensure you never miss a future payment.

Change your billing due date.

Suppose you have multiple bills due on the same day of the month. In that case, it may be worth changing your payment due date to align better with your personal situation (e.g.,spacing out bills to make them more manageable, or ensuring your payment date is after an income deposit date.)

Explore hardship/deferment options.

If you’re having trouble making ends meet, call your creditors and request a forbearance or payment deferral. They may also be able to waive late fees or even allow a lower payment for a period of time.

2. Amount Owed (30%)

Your credit utilization is determined by the amount you owe—not relative to your income but, compared to the total credit limit available to you, expressed as a percentage.(For example, if your card balance is $600 and you have a spending limit of $2,500, your credit utilization is $600/$2,500 or 24%.) As a rule of thumb, your credit utilization should be no more than 30.

Quick Tips for Improving Amount Owed:

Pay down your balance early.

If you can make small payments throughout the month, this can help keep your balance down and lower your credit utilization.

Decrease spending.

Find areas where you can cut back on spending to lower your utilization. Our Prioritizing Expenses Worksheet can help you to determine what to cut.

Ask for a credit line increase.

Increasing your credit limit is the simplest way to decrease your credit utilization with out having to cut back on spending.

3. Length of Credit History (15%)

Although not the most heavily weighted category, the length of a borrower’s credit history is important. It’s an indication to the financial institutions what kind of borrower you maybe in the future. In addition to the overall time an individual has had credit accounts open, credit history is also determined by how long specific types of accounts have been open, and how long it’s been since those accounts have been used.

Quick Tips for Improving Credit History:

Get a secured credit card.

Backed by a cash deposit, a secured credit card can be an excellent low-risk way for those who have not had a credit card previously to start building credit.

Keep credit cards open.

Closing a credit card can negatively affect your score. If you have cards you aren’t using, placing a small recurring charge on them (such as a phone bill or streaming subscription) can help to keep the card active while keeping your overall credit utilization low.

4. Credit Mix (10%)

Credit mix is determined by looking at the types of credit you are carrying (this includes credit cards, retail accounts, installment loans, mortgage loans,etc.) as well as your payment history in each area.

Quick Tips for Improving Mix:

Explore loan options that work best for you.

Your credit mix isn’t the most impactful category, and you shouldn’t pursue loans unless they make sense for you and your personal needs. In fact, you may already have a fair credit mix—things like credit cards, personal loans, auto loans, and mortgage loans are all considered different types of credit.

Make sure you pay loans on time.

A good credit mix is moot if you aren’t making timely payments–ensure you are making at least the minimum payments on your outstanding loans each month.

5. New Credit (10%)

Research shows that opening several credit accounts in a short amount of time represents a more significant risk—especially for people who don’t have an established credit history.

Quick Tips for New Credit:

Open new credit accounts only as needed.

Every time you apply for a new credit card,this creates a hard inquiry on your credit,which will automatically lower your score. Having more credit than needed can also encourage unnecessary spending and lead to increased debt.

Understand how hard inquiries show upon your report for different types of loans.

While multiple inquiries over a short time frame for credit cards may result insignificant score damage, other types of inquiries—such as home or auto loans—are reported a little differently. Since lenders know people often shop around, these types of inquiries won’t hit your report for 30 days, and when they do,they’ll be counted as a singular inquiry.

So, there you have it. If you implement these tips, you should start to see a gradual increase in your credit score. Remember: Your credit score is based on patterns over time, with an emphasis on more recent information. Improving credit won’t happen overnight, but with persistence and consistency, your score should gradually improve over time!

Free Credit Report Review

Need some extra help navigating your credit report? GreenPath’s NFCC-certified credit counselors can walk you through a free review of your credit report. They’ll explain how to read the report and help you to make a plan for managing your credit score to support your goals.

Learn More

• By Kevin Alvarez

Why Credit Matters!

Information brought to you by our partner, GreenPath Financial Wellness

Understanding your credit is easier than you may think. Building it properly has it's benefits. It can help with everything from buying a car, house, to getting a job. Yes, even a job. That three-digit number can be important building block in establishing a solid financial foundation.

Sometimes, the unexpected can happen; like a pandemic, a temporary loss of income, or an illness. Improving your credit may take time and patience, but it is worth it. If you have run into a bump in the road or experienced hardship in your finances, there are programs to help.

Why Is A Good Credit Rating So Important?

Juggling your credit is possible with planning and knowledge to get a better handle on your financial future. it is helpful to understand how it can impact you, your family, and your goals for the future.

Credit scores are increasingly important as the economy continues to recover, and more people apply for loans, rent, and buy homes. Banks and other lending institutions use your credit scores to decide who is a good risk based on their previous financial history.

Having A Good Credit Score Can Save You Money!

What does this all mean? A good credit score is part of a path to provide opportunities you may not otherwise be able to access. Lower interest rates are offered to people with better credit scores - that means more money staying in your pocket. It's also easier to get a loan or line of credit. Many companies require at least a fair credit rating before they will even consider doing business with you.

How Is Your Credit Score Determined?

Your FICO score (Fair Isaac Corporation) is a three-digit number based on the information in your credit reports. It helps lenders determine how likely you are to repay, and how much it will cost (the interest rate).

When you apply for credit, lenders need a fast and consistent way to decide whether to loan you money. In most cases, they'll look at your FICO Scores which track history with credit card debt.

There are several factors that help determine your credit score. Understanding them can get and keep you on a great path.

Payment History (35%) - Are you paying your bills on time? Keeping up with your payments and having a history of doing so, is a big factor in your credit score. If you've fallen behind, or need to get back on track; you can set up automatic payments, set reminders, maintain a monthly budget or savings plan.

Amounts You Owe And How You Use Available Credit (30%) - Know your credit limit and keep your balances low (30% of available credit or less).

  • If your balances are high, create a proactive plan to pay them down.
  • As you are working to pay down balances, stop using the card altogether, Also, instead of paying the minimum, increase your monthly payment.

Length Of Credit History (15%) - How long you have gad a line of credit open can help you.

  • Review your credit report to see how long it has been open.
  • Keep accounts active. If possible, keep older accounts active, without interest charges.

Types Of Credit You Use And Your/Credit Mix (10%) - it's important to have a combination of revolving accounts and installment loans. This shows your ability to responsibly handle different types of loans like auto loans , personal loans, or student loans.

New Credit/Having Too Many Lines Of Credit (10%) - Opening an account is certainly alright. Opening five accounts at once, not so much, when you apply for credit remember:

  • Applications for new credit stay on your account for two years.
  • When you do apply, it can cause a slight dip on your credit score.
  • Remember it is important to handle any new accounts responsibly to avoid more significant impact to credit.
  • If you are taking on too much credit, it could signal you are having financial issues.
For more Financial tips and education, visit GreenPath Financial Wellness.

• By Kevin Alvarez

3 Tried and True Facts About Personal Finances

Information brought to you by our partner, GreenPath Financial Wellness

No matter your age or stage in life, it pays to know the facts about personal finances. When you understand the basics, you can set yourself up for success and build a healthy financial future.

Here are three facts to know about personal finance to get on the right track.

Fact #1 - Good Financial Habits Pay Off

Making it a habit to set aside money each month helps you save to meet both short and long-term goals. For many of us, the big savings goal is purchasing a home, and eventually retirement. But people also save to build up an emergency fund, afford a new vehicle, education, and more.

Making regular deposits, no matter how small, will add up over time. Besides setting aside money and ensuring your funds earn a competitive rate of interest, the second most important habit is to control spending. By budgeting wisely, you not only set aside more money for potential savings, but you also develop spending habits that serve you in the  long term.

Fact #2 - There's a Smart Way to Manage Debt

Many people find it helpful to understand the facts of managing debt wisely. For example, making only the minimum payment each month on a credit card extends how long it takes to wipe out your debt and adds to the amount of interest you pay. Minimum monthly payments can be a short-term approach to dealing with financial challenges - because you are keeping up on bills - however, making more than the minimum payment each month helps avoid digging yourself into a financial hole.

If you've hit the maximum balance on credit cards, or run into issues keeping up with other debt, it is time to take a hard look at where your money is going and make a plan to change any habits that are not beneficial to your financial health.

Fact #3 You Don't Have To Go At It Alone

There are times in life when you might need to get a handle on high credit balances, understand your options when facing financial challenges, or figure out how to get a healthier credit score. A financial counseling session, working one-on-one with a certified counselor, is a good first step. Not only will the counselor help you understand your full financial situation, but they will also help you to develop a customized plan for your unique situation.

Whether it's overwhelming credit card debt, student loan balances or issues with keeping up with housing costs, the path is easier when you work with a trusted resource.

A trusted source, along with an action plan that provides proven strategies, can propel people toward financial health with confidence.

Connect with a GreenPath Counselor Today

Through our partnership, counselors at GreenPath Financial Wellness are ready to share some "tried and true" facts when it comes to financial health. Gain a better understanding of your financial picture and whats steps to take to improve financial wellness.

Get started with a free, confidential financial counseling session by clicking the link below.

Learn More

• By Kevin Alvarez

Free Webinar: Buying a Home in a Seller’s Market

Register Now

This free, one hour webinar about money concepts is presented by GreenPath Financial Wellness

Do you have a financial wellness goal of becoming a homeowner? With interest rates at a record low, you are not alone. Let us help you navigate this important milestone during a seller's market. The goal is for you to secure a good home, without jeopardizing your financial future.

What You'll Learn

  • What is important to most sellers in today's real estate market
  • The realistic timeline of how long buyers, lenders, and other real estate professions may impact the home buying process

Who should attend

  • Those providing guidance to home buyers (real estate agents, housing counselors, parents, grandparents, etc.)
  • Potential home buyers
  • Lenders

Details

Date: Wednesday, June 23, 2021

Time: 10:00 am PST - 11:00 am PST

Register Now
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