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Back to the Basics: CC Style, Part 4  by Tara

November26

You know how at the end of fireworks shows, they have the grand finale? It’s jammed full of pop, sizzle and BAM! Well this is our grand finale to our credit score series! It’s the thing that everyone has been waiting for…

10 Ways to Improve Your Credit Score (and some of them you can start doing immediately):

  1. Pay your bills on time – EVERY time.
  2. Open a credit card if you don’t have one. Time to start building that GOOD credit!
  3. Don’t open accounts you don’t intend to use. Even if it will get you 10% off your purchase that day!
  4. Add an installment loan from Linn Area Credit Union to your credit mix.
  5. Request a higher limit on the credit cards you carry a balance on.
  6. Keep your balance low in relation to your available credit. We suggest that you never carry a balance that exceeds 30% of your available credit.
  7. Order a copy of your credit report and correct any negative errors. Go to www.AnnualCreditReport.com.
  8. Don’t close unused accounts in good standing.
  9. Don’t open several new accounts in a short period.
  10. Work with us to boost your credit score!

Come on in to any full-service Linn Area Credit Union and talk with a financial counselor. Together, we can determine how to give your score a lift and see if we can save you money in the meantime.

If you have any questions, feel free to post them in the comments!

Back to the Basics: CC Style, Part 3  by Tara

November16

Well hello again! Welcome to your third installment of Back To the Basics: Credit Style. I hope you’re learning lots about the three little numbers that rule the financial world! I think today’s topic is really going to peek your interest.

We help members with credit related questions every single day at Linn Area Credit Union. One of the most commonly asked questions is, “What hurts my credit score?”

Well here it is, folks! A nice little list of things people do that cause their credit score to feel the burn:

  • The easiest to prevent and most common mistake is missing payments. It doesn’t matter what the dollar amount is, if you miss a payment, it’s going to burn. It can take up to 24 months to restore credit with just one late payment showing up on your credit report.
  • Closing unused accounts that are in good standing. This one is a little confusing. You see, closing an account in good standing actually diminishes the number of good trade lines on your credit report.  And it could shorten the length of time of your oldest credit history.
  • Applying for a lot of credit cards and store cards in a short period of time.
  • Having an account sent to collections or (eek) charged off.
  • Closing a credit card that still has a balance.

Who knew credit scores were so needy and sensitive? Just like that person you used to date in high school…

Well here’s some GOOD news! There are some things that DO NOT affect your score:

  • Debt ratio (how much debt you owe compared to your income)
  • Income
  • Length of residence
  • Length of employment

Don’t be fooled, though! These items do factor in when applying for things such as loans.

If you’re credit score isn’t quite where you want it to be, fear not! Next time we are going to share with you TEN WAYS to improve your credit score – things that you can start doing RIGHT AWAY! Holy cow! I can hardly wait!

Back to the Basics: CC Style, Part 2  by Tara

October19

Welcome back! If you’re just joining us, you might want to skip back to here and get your credit score.  ;o)

So now that you have your number (or at least know how/where to get), it’s time to examine how a credit score gets built – and it’s super interesting! Okay, maybe not super interesting, but definitely something you need to know about. :o)

What makes up your credit score?

The Iowa Credit Union League provided an excellent pie chart (mmm… pie!) that helps explain the stuff that gives us that three digit number:

10% Types of Credit In Use: Try to have a good mix of installment (auto, personal loans, etc.), credit card, and mortgage accounts. Try to avoid finance company debt.

10% New Credit: Limit your credit cards and store cards to just what you’ll ACTUALLY use.  (Make sure to ask yourself if saving that extra 10% of your purchase is worth it!) Opening new lines of credit frequently can hurt your overall score.

15% Length of Credit History: The longer you’ve successfully handled credit, the better your score (potentially) will be. This is why we encourage teens to get our Plugged In credit card or auto loans. Go here for more information!

30% Amounts Owed: This is a measure of your “credit utilization” or balance to credit limit ratio. The lower you’re using overall, the better your score. Try to keep your credit card balance under 30% of the available credit limit.

35% Payment History: Put simply, if you’re late on payments, you score WILL suffer. Make sure all payments are being made on time or within the grace period.

Good job making it through all of that! I think you’ve earned a slice of PIE!!! Baw ha ha. In the spirit of pie and pie charts, I have made my own pie chart…

Tell us in the comments below, did any pieces of this credit pie surprise you? Or tell us what your favorite kind of pie is!

Back To the Basics: CC Style!  by Tara

October4

We’re all at different points in our financial journey. Whether it’s your first time around the block or you’re an old pro, it’s a really great idea to go back to basics and revisit the three little numbers that make the world go ‘round – your CREDIT SCORE!!!

We are going to take a closer look at how to improve your credit score through a series of four blog posts. We’ll break it all down so that you understand exactly what makes up your credit score, what actions will hurt your score, and things you can do to start improving your credit score right away.

Think fast – what’s your credit score?

*insert Jeopardy theme song*

Bonus fact while you wait: Did you know that as of January 2011, the National Average score was 692?

Time’s up. How quickly were you able to answer that question? Better yet – how SURE were you of the accuracy of your answer?? ;o) We encourage you to go to www.AnnualCreditReport.com once a year to pull your credit report. It doesn’t ding your score and can actually HELP it if you see things on there that don’t seem right. FYI – there is a small small fee to get your credit SCORE, but worth it. (This purchase is Tara Approved!!!)

You know how to get your credit score, but what does it mean and, most importantly, how can you prove it? Just keep your eye on this blog, friends, because we are going to go into detail! Believe me, your credit is going to look fabulous after we’re done with you!

Tell us in the comments below, when was the last time you check your credit score??

Credit Score: Ignorance is not bliss!  by Tara

September6

Three little numbers can shape your financial life and hold a heck of a lot of power. Your credit score can affect the rates you receive on home or auto loans. It can be the “yay” or “nay” when submitting applications to rent an apartment or the deciding factor on if you have to have a down payment for your utilities. Your credit score can even be looked at when applying for a job. These three little numbers are actually three very influential, huge numbers that are the gatekeeper to living a better, less expensive life.

Ready for a jaw-dropping statistic? You sure? According to Paul Strassels, author of “Credit When Credit is Due,”  those who are A-credit versus those who are D-credit, throughout their work-life span, will pay approximately $250,000 less in interest. Yes, that is about 233,000 Jr. Bacon Cheeseburgers or 501 fancy-pants Apple iPads.

A friend of mine recently told me that she has no idea what her credit score is. She’s too scared to look. *sigh*

Friends, ignorance is not bliss! A credit score is very much like a shadow – wherever you go, it follows. It’s better to face it head on then pretend it doesn’t exist. Once you know what your credit score is, you can come up with an action plan. You just need to take the first tep and that’s finding out what your credit score is. We recommend that you go to www.AnnualCreditReport.com to get your free copy of your credit report.

Do you have any great tips that you’d like to share about how you keep your credit score in it’s “Happy Place”? We’d love to hear ‘em!

Stooges, Star Wars & Credit Bureaus… say what?  by Matt

June21

Throughout popular culture, the existence of trios is very common.  The blind mice, the Stooges, two trios of Star Wars movies and even Harry, Hermione and Ron!  There is another trio out there that has far more power over you and you may not even know who they are!

The three I speak of are the biggest credit reporting agencies: Equifax, Experian and TransUnion.  They collect information about you and everyone you know, recording what you owe to who and if you make your payments on time.  Now this probably sounds like some terrible Big Brother scenario, but it’s really not a bad thing!  Using this system, it can be determined how ‘credit worthy’ you are to car dealers, mortgage lenders, landlords or even potential employers. 

Why are there three different agencies?  It’s fairly simple, they are businesses like any other and competition is required to keep everything in check.  Having a single agency would be an invitation for errors of all sorts going unchecked.  With three major agencies, information from all can be reviewed and discrepancies will be noted much more easily.

It’s important to be aware of what is on your report as the data relies entirely on the information provided by creditors (banks, credit unions, credit card companies and even landlords) and it is possible that errors can exist that may hurt your chances to be approved for a loan or other items. 

There are many advertisements out there talking about how you can use their website to view your credit report; however the best source (that has no hidden costs) is www.AnnualCreditReport.com.  Here you can view your report for free once per year. I highly recommend you look into it before you find out the hard way!

Are you diligent about checking your credit score every year or only right before you make a big purchase? Let us know in the comments below!

Hi-Five, Iowa!  by Nick

December9

Have you ever wondered what it would be like to live life without a huge boulder on your back? Well I believe that most Iowans are moving in that direction. The latest credit card debt report came out from TransUnion and said that Iowans have the lowest credit card debt nationally. Way to go, Iowa!

According to The Gazette, Iowans had an average of $3,807 in debt, which is down from nearly $6,000 just a year ago. This is an enormous achievement for our state and it shows how our local economy is really starting to shape up.

Know what’s cool about low credit card debt? It helps us save more of our disposable income. Cha-ching! I’ve been that person struggling month to month with credit cards. The temptation is always there to live materialistically, but if you can discipline yourself, you can also experience a boulder free life. Take it from me, living boulder free is definitely the way to go!

With the year coming to an end, now is the perfect time to start thinking about your New Year’s resolutions. My suggestion? Make your New Year’s resolution to get out from underneath your credit cards. A good place to start is the easy to use financial calculators on our website. Click here to see what it will take to pay off your credit card balance and what you can change to meet your repayment goals.

We at Linn Area Credit Union are always happy to help you achieve your goals. Please let us what we can do!

Have you started thinking about your New Year’s resolutions yet? Will they be related to your finances?