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How to Improve Your Credit Score
Pay Down Past Due Accounts
Any amounts that are past due destroy your credit score. Work at paying down past due balances as soon as possible; then normal payments can be made and will reflect paid on time. Any charge offs or liens within the past 24 months damage your credit score. Work at paying these as quickly as possible.
Check Your Limits and Distribute Balances
Make sure your credit card company reports your credit limit to the credit bureau and then keep your card balances at 50 percent of that limit or below. Anything over 70 percent of your limit damages your credit score.
Don’t Close Your Credit Cards, Keep Old Cards Active
Keep the number of credit cards you have between three and five to better your credit score. If you need to close some, the newest cards are the ones to close.
People that have credit for a longer period of time are assumed to be at less risk of defaulting on payments. Use the old card at least once every six months to avoid it moving to inactive.
Call to Eliminate Late Payments from Your Credit Report
Once you become current on any late payments, contact all creditors that have reported the late payments to the Credit Bureau and request they be removed. Persistence and politeness usually result in success on this one!
Eliminate Collection Accounts
Not all collection agencies will do this but many will, and it is well worth your effort to try. When you are getting ready to pay off a collection, contact the collection agency and make arrangements to pay it off with the condition they remove all reporting from the credit bureaus. Request a letter from them that states this agreement.
Buying a New Car
The first step in the process is determining your budget. Your budget is more then the price on the windshield. Look into the autos fuel economy and maintenance cost.
Getting pre approved gives you confidence and the ability to commit. Going through the pre approval process will trigger a credit check. It is always a good idea to periodically have a credit report run to ensure there are no errors that could prevent you from getting a loan. You can get a free credit report from each of the three credit agencies annually.
Once you have found the car that is right for you understand its value. Services like Kelly Blue Book and Edmunds offer estimation tools that show the value of both new and used cars, their retail and trade-in values. Take the car for a test drive and for used cars have a mechanic not affiliated with the seller review the car for potential current or past issues.
If you are buying a car from a private party pull a vehicle history report through CARFAX. This is your best protection from buying a car with a history that could cause costly maintenance in the future.
Consider additional or extended warranty protection to protect your self from major car repair cost. And with all vehicles it is a good idea to purchase roadside assistance.
Finally, there is Guaranteed Asset Protection or GAP insurance. Gap insurance closes the gap between what your insurance company thinks your car is worth and what you owe the lender. If you are buying a used car GAP insurance is likely not offered.
A car purchase can be fun, but keep in mind it is an investment. Invest wisely and make smart financial decisions in the process. We offer a variety of auto loan options. Let us help you through the process and into a new car.
Once You Are Married
Start your future on the right financial foot. Marriage goes beyond the joining of two lives; its also the joining of finances. Combining your finances with your spouse will make life a little easier and get you started on the right foot.
First, there are just a couple things to remember to do that are often overlooked:
- Change your accounts to reflect your new name.
- Should you be changing your address, contact the credit union to let us know. .
- Consider creating joint accounts.
OK, now that we have those basic things out of the way sit down with us and lets create a financial plan of attack.
Next lets review your debt. If you are juggling credit card bills, student loans or other outstanding debt, we may want to look at a debt consolidation loan. This would simplify your life and may deliver you a tremendous savings through lower interest. The other nice thing about debt consolidation is it allows you to see the light at the end of the tunnel.
At the minimum we may have credit card options to lower your interest and monthly payments.
Lets also look at Mortgage Options. If you are a first time homebuyer there is a program for you. If you already own your home you may want to look into refinancing at a lower rate.
Always remember to plan for the future.
Many couples are concerned about how to pay for the big day and understandably so. A wedding is a landmark event in your life and you want to make it special. But how do you manage the cost?
First, set a budget. This may seem obvious but writing it down and keeping track of your expenses helps keep you on target. In fact, you may want to think about setting up a checking account just for wedding expenses.
If you have a significant amount of time before the wedding consider setting up a savings account. But, depending on your wedding budget and timeline you or your parents may want to look into a personal loan or home equity loan. Another option is to look into our available low-rate credit card.
The point is we provide options and can help you establish a smart financial plan.
What You Should Teach Kids So They Save Money
By: William Blake
If your son or daughter’s piggy bank is nearly overflowing, it may be time to consider opening up a bank account for them. An account helps teach children how to keep track of money easier. There are a few different types of savings accounts that you should consider for your child.
As soon as your child has money of their own, they can start a savings account. Find a day with free time and make a trip to your bank branch. Tell the bank associate there that you are interested in setting up a child’s savings account.
Together, you can open a statement savings account. Statement savings accounts give you a monthly report of all activity. You will be able to see all deposits that your child has made, and any withdrawals that you have made together as well.
You should look over each statement carefully with your child, and explain all aspects of it to them. Show them the amount they started with, interest they accrued, the final amount, and any other activity. If your statement shows the withdrawals without the description, you can write the details on the statement to help the child track how they are spending their money.
You might also be able to get a passbook savings account. Each account holder is given a small “passbook”, and the book is run through a machine which records all of your transactions. Your child can find out their balance right away, rather than waiting for a statement. Kids tend to like this, as they can look at their current transactions and balance whenever they want.
Banks are not the only institutions that issue savings accounts to children. Credit unions also have savings accounts available to the children of their members. There are special savings accounts that are designed for kids of various ages. When the account is opened, they receive an ATM card with their picture on it and other free gifts for starting the account.
An ATM/debit card can be used as cash by your child for their purchases. Parents can keep the receipts and teach children how to check them against their savings account statements each month. Allowance money can also be deposited in the savings account each month.
For children under eighteen, some states will offer what is called a “custodial savings account”. This type of account states the parent’s name as the account holder, with child’s name under it. When the child turns eighteen, ownership of the account can then be transferred to the child (now young adult).
Savings accounts are a great tool for teaching money management skills. Kids can keep track of their money easily and even use an ATM/debit card to make purchases or withdraw cash.
Buying a Home
If you are planning to buy your first home or are moving to a new home we can help you navigate through the options available.
First ask yourself, “am I ready to buy?” As any financial advisor will tell you – look at your budget and determine what you can afford. Purchasing a home forces you to take analysis of your credit and can be one of the most important and impactful financial decisions you will make.
Use our mortgage calculators as a guide to planning.
Make sure you have a long-term financial plan that takes into account property taxes and homeowners insurance.
Also, work on establishing an emergency fund for the inevitable expense of home repairs. This can be as simple as setting up a savings account and socking a little bit of money away each month.
If you are a first time homebuyer we have options that can help make home ownership easier then you think.
Take action and get preapproved. We can give you a commitment, which will make your offer on a new home attractive to the seller.
Finally select the mortgage that is right for you. An adjustable-rate or balloon mortgage may be a better option if you expect to live in your home for a short time. A fixed-rate mortgage might be best if you want to insure your monthly principal and interest portion of your payment will remain the same through the life of your loan.
Financial Diet Plan
By: Howard Brule
Most of the talk on financial blogs is pretty negative these days. Most people are discussing the economic slowdown, the stagnating housing market, the rising number of bankruptcies, and increased risk of having a serious recession.
The truth is, many of us need to go on a personal financial diet. Is it time to shed some of that extra weight? In good times we all tend to extend ourselves a bit more than we should. Then when the inevitable slow down hits we have no choice but to cut out the fat.
Like quitting smoking or dieting, it’s a psychological battle when it comes to keeping your finances under control. You will need to prepare a plan stating exactly how much you are going to spend, and how much you will save, by giving up certain things. Then, it is critical that you design techniques that will help you stick to the plan.
Convincing yourself to avoid binge spending is one of the most important commitments you can make to your plan. When we have extra money to spend, buying non essentials is a big part of the fun. But once you’ve decided on a slimmed down budget, it is important that you not see compulsive spending as an option. If it’s not in the budget, don’t buy it.
On the other hand, we are all human, and that means we all fall victim to temptation from time to time. Don’t get down on yourself when your will power slips and you buy something you swore you weren’t going to buy. Just put it behind you and get back to the plan.
In fact, you might consider bringing the fun right into your plan. It can often be beneficial to compensate yourself with small perks or indulgences on occasion, just to take the daily grind out of the “diet”. Just try to stay within your budget. That will give you the satisfaction of splurging and the sense of accomplishment that comes with meeting your goals.
VIRGINIA COOP CREDIT UNION
811 4th Street North
Virginia, MN 55792
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