Savings and checking accounts are typically the first step in establishing a financial foundation for consumers. These accounts are held at financial institutions that allow you to deposit and withdraw money while keeping a record of what comes in and what goes out.

There are two main types of financial institutions in the United States: banks and credit unions. Most consumers lump these two types of financial institutions together because they both:

• Allow you to deposit and withdraw money
• Hold and safeguard your money
• Invest your money while it sits in your accounts
• Offer loans and other financial services and products
• Operate with a federal or state charter
• Protect the money in your accounts for up to $250,000 per individual account. (NCUA Share Insurance)

That said, credit unions have some unique features and values that are important to be aware of:

• Credit unions are owned and controlled by their members, who use their services, and often have a shared interest or common bond. Can you guess what Members First’s common bond is?
• A volunteer board of directors is elected by members to manage a credit union.
• Credit unions operate to promote the well-being of their members, not investors.
• Typically, credit unions have lower fees.
• Often, credit unions have lower interest rates on loans.
• Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates.
• Many credit unions, including Members First, participate in shared branch networks to give members access to thousands of branches and free ATMs across the country.

When you sign up for a checking or savings account, you are entering into an agreement with a credit union or banking that allows them to hold on to your money, loan and invest it, and sometimes charge certain fees for maintaining the account. In return, you get a safe place to store your money, access your funds (through ATMs, debit cards, checks, etc.) and other benefits.

Tip: You may hear your credit union refer to your checking account as a share draft account. While this account operates that same as a bank checking account, share accounts indicate that you are a partial owner of your credit union, unlike bank account holders who are customers.

Opening a savings account is typically the first step for a consumer looking to join a credit union. However, the primary goal of a savings account is to help you put aside money for specific goals, long-term goals, like retirement goals, and emergencies. Think of your savings account as the adult version of a child’s piggy bank. The money in them is not for going out to dinner or splurging on a new game, but instead, this the money you put away in case your water heater or roof needs replacing, your car needs repairs, or you’re saving for a home or family vacation.

In a 2024 report by Empower, it was found that 37 percent of U.S. adults would either not be able to cover or would have to sell something in order to cover an unexpected expense of $400, and almost a quarter (21%) have no emergency savings at all.

While you can withdraw money from savings accounts when needed, many credit unions and banks have monthly limits on how often and how much you can take out. This helps you think twice about withdrawing cash from your savings. Additionally, many credit unions offer incentives to encourage you to save.

Tip: You may have heard of the term “high yield savings” or “returns” on your savings account before. These terms refer to savings accounts that “grow” your money over time while the money sits in your account. While savings accounts can increase your balance without you doing anything, the monetary increase is nominal. Savings accounts are not investment accounts, and they won’t make you rich.

ACTIVITY

Consider the last time you had an unexpected financial emergency. What did you do to pay for it? Can you cover that expense today? What would you do if you faced more than one emergency at the same time? How could having a savings account help?

Checking accounts are typically used for everyday expenses. You use these accounts to buy groceries, gas, movie tickets and your morning coffee. You may also use these accounts to pay bills like your rent or mortgage, gas, electric, or car payments. Some people find it easier to manage their money by having more than one checking account so that money is set aside for bills in one account and miscellaneous expenses can come out of another account.

Checking accounts also come with certain benefits that make managing your money easier. The benefits of these types of accounts include: ATM/Debit Cards, Statements, Transfers, and Electronic Services.

SUMMARY

While not having a financial institution might not seem like a big deal, it can have serious implications that impact your financial well-being. According to a 2023 study by the FDIC, approximately 5.6 million U.S. households (4.2%) are unbanked. Unbanked individuals often find themselves using riskier alternatives to manage their finances and borrow money. These alternatives can cost consumers big bucks in check cashing fees and high-interest payday loans.

In addition, unbanked customers:

• May not have a safe place for their money
• Have no protections if their money is stolen or they are defrauded
• Have no official record of how much money they have or have spent
• Can’t participate in the financial market and build wealth safely

Having a savings and checking account at a credit union is essential to fully and safely participate in the economic system.

Section 2: Starting a Savings or Checking Account

Once you decide to start a savings and checking account, consider the type of credit union you would like to manage your money. Shop around. Do your research. Here are some things you should consider:

• Are they accessible? Do they have branches in my community?
• Do they have surcharge-free ATMs near me?
• Do they charge fees for transfers or for going below a certain monthly balance?
• Do they have a monthly maintenance fee?
• How quickly do I receive my funds?
• Do they have mobile banking services?
• Can I get alerts if there is a low balance or suspicious account activity?
• Do they have 24-hr service by phone or chat?
• Do they have multi-lingual services?
• What is the cost of an overdraft fee?
• Do they offer international transfers (if needed)?
• Do they value my business?

Opening an account.

You will need a government-issued photo ID, an application, and an initial deposit for all accounts being opened. Some credit unions may allow you to spend the initial deposit, however, some may be required to remain in the account as a minimum balance. Many savings accounts have a minimum balance as that is your “share” of the credit union. Once the share has been spent, you would no longer be a member. The credit union will typically place an hold on those funds until you decide you want to close your account.

ACTIVITY

Because you’re taking this course, you’ve likely chosen Members First as your financial institution. We’re glad you chose us and would love for you to take a moment and answer at least 6 of the questions listed above for Members First.

What resources did you use to find the answers?

SUMMARY

It’s important to know what you are looking for when looking to find a bank or credit union. Your financial needs and goals are unique to you. It may also be a good idea to have more than one financial institution. If you’re looking to save money and not have it as easily accessible, you could try a high-yield online savings account. Having something like this, along with an account at your local credit union could be the perfect combination.

Section 3: Maintaining your Savings and Checking Account

Understanding how to maintain your accounts is vital to staying in good standing with your credit union and ensures that you don’t incur unexpected fees and lending obstacles.

If your savings and checking account has a minimum balance requirement, you mustn’t go below it. Otherwise, you may get charged a fee. As well, when using debit cards, it’s important to remember that they are not credit cards. If you swipe to make a purchase but don’t have enough money to cover it, two things can happen:

1. Your card will be declined
2. If you’ve opted-in to overdraft privilege, your credit union may cover the overdraft on the account. However, this service will typically involve a fee and be limited to a preset maximum amount.

Tip: Overdraft fees can add up if you make multiple purchases and don’t have the money in your account to cover them. Pay attention to your account balances by setting up mobile alerts that warn you when your balance is low. Also, consider linking accounts so that money can be taken from other accounts to cover what you may otherwise overdraw.

Account Tools

Monthly Statement

Knowing how to read your monthly account statement is essential in maintaining your accounts. These statements help you track where your money is and how it’s being spent. They can prove invaluable when you suspect that a mistake has been made by your financial institution or a service that’s billed you, they can help you track if there’s been suspicious activity, and they can also help you see where you are overspending.

Checks

While checks are becoming less commonly used in the new world of digital banking, they are still an important tool to familiarize yourself with. Checks are a written order that instructs a credit union to pay a specified amount of money from the member’s account to the person/entity name on the check. You can use a check to pay bills like your rent or a child’s tuition. Often checks are used to deposit money into your accounts. If you aren’t signed up for direct deposit, your employer will pay you with a physical check. You can take that check to a branch location or a Members First ATM to be deposited into your account. There may be a delay in the availability of funds after the check deposit has been made.

Understanding a check:

The Front

1. Your name and sometimes your address and phone number are included
2. The check number helps to identify which check in your checkbook has been written
3. Your credit union’s information
4. The routing number (4a) and account number (4b). These numbers help to identify the financial institution and account money is being withdrawn from
5. The date the check is written
6. The ‘Pay to the Order of’ line. This is where you write the name of the person or company to whom you will give the check. After writing the name, you can draw a line to the end. This prevents anyone from adding another name to your check.
7. The dollar amount of the check is written as a number, such as $19.75. Also known as the courtesy amount.
8. The dollar amount of the check in words. Such as nineteen and seventy-five cents. Also known as the legal line. If this amount is different than the “courtesy amount,” the legal line is the amount that is taken by the financial institution. Also adding a line at the end prevents another person from adding a different or additional dollar amount after what you have written.
9. The memo section. This area is optional. You can use this area to remind yourself why you wrote the check or to record the account number of the bill you are paying.
10. The signature line is where you sign the check, indicating that you approve this payment from your account.

The Back

The back of your check is also important as it includes the endorsement area. Endorsing a check means signing the back to make it “cashable” or “negotiable.” Some types of checks and some types of deposits require specific endorsements.

ACTIVITY: You just received your first book of checks and you would like to send $25 to your friend who just had a birthday. Fill out the check below with the needed information.

ATM/Debit Cards

ATMs are electronic terminals that let you bank anytime, regardless of whether your credit union is open. To withdraw cash, make deposits, or transfer funds between accounts, you generally insert an ATM Card and enter your PIN. Some financial institutions and ATM owners charge a fee, particularly if you don’t have an account with them or your transactions occur at remote locations. Generally, ATMs must tell you they charge a fee and the amount on or at the terminal screen before you complete the transaction.

These days, most credit unions offer ATM cards that are also debit cards. These cards allow you to make online and in-store purchases on the same card you use to get cash at ATM terminals. When you make a purchase with your debit card, the money comes directly from your checking account. Here’s what you need to know about these cards:

• The name and logo of your financial institution will be on the card.
• Your name will be listed on either the front or the back of the card.
• A card number will be listed on the front or back of the card. This number is typically 16-digits long, but can vary. The first four digits are attributed to your financial institution, but the others are chosen at random to connect the bank or credit union to your account. Your card number is not the same as your account number and should be kept private.
• Cards must be replaced periodically due to account changes, loss or theft of cards, or new technology. Therefore your card has an expiration date, and when it’s close to expiring, your financial institution will mail a new one to you. You may be asked to provide the expiration date when making over-the-phone or online purchase.
• Cards have a signature strip where you are supposed to sign your name. Many merchants will not take payments if you have not signed them, so it’s important to sign as soon as you get your card.
• When making in-person purchases, you may swipe your card using the magnetic strip located on the back of your card. This strip electronically links your card to your accounts.
• More recently, credit unions like Members First have adopted smart chips as safer alternatives to magnetic strips. These small metal chips make it harder for thieves to use stolen cards. You simply insert the chip into card readers or tap the contactless payment symbol at a cash register/terminal to make purchases.
• Cards come with a security code on the front or back. This code acts as an additional security measure in cases of fraud and is often requested when making online or over-the-phone purchases.
• Many cards have a hologram on them. The shiny, mirror-like image is a security feature to protect your card from fraud.
• On the back of your card, you may also find the contact information for your financial institution.

SUMMARY

Maintaining your savings and checking account is essential to keeping a good banking relationship with your financial institution. This will help you to avoid fees and potentially lending issues down the road. Remember, a debit card is not a credit card. Without enough funds, your card may be declined, or if you have overdraft privilege, may be covered by your financial institution, for a fee. Finally, reviewing your statements for unfamiliar charges and spending patterns can make it easier to manage your finances effectively.

Credit unions often have available resources and/or tools to help you with your savings and checking accounts. Here at Members First we have a number of tools you can use to help manage your finances:

Online Banking - a method of banking in which transactions are conducted electronically via the internet. It’s faster, more convenient, and available 24/7. Online Banking is typically done from a laptop or desktop, while mobile banking takes place on a mobile device or tablet. Additionally, there are often other services within online banking such as Electronic Statements or E-Statements, budgeting tools, external transfers, and more.

Mobile App Banking – a method of banking in which transactions are conducted electronically via an application provided by the financial institution through an App Store. Most applications will have the same features and functionality as Online Banking, if not more.

Bill Payment – an online banking/mobile app banking service that allows you to pay your bills from your checking account all in one place. Paying your bills from the same place can help you to keep better track of what bills are due and when. It is important to keep in mind that some bill pay providers need you to make the payments a few days in advance to make the due date.

Mobile Deposit – a mobile app feature that allows you to take a picture of a check with your mobile device and have the check deposited to your account. Many institutions will have check hold policies and/or limits with mobile deposit.

Alerts & Notifications – an online banking/mobile app banking service that allows you to get emails and/or text notifications for a number of categories such as:

• Low Balance Alerts
• High Balance Alerts
• Large item deposit
• Daily/Weekly Balance

Money Management – an online banking/mobile app banking service that allows you to budget your money. Here you can see ways of paying off debt, setting goals (savings, debt payoff, and retirement) and even knowing your net worth.

Credit Score – an online banking/mobile app banking services that allows you to see your FICO 8 credit score, get alerts on your credit report, view your credit report, and get offers on products that may help you in your credit journey.

Telephone Banking- a 24/7 telephone number that allows you to get balances and transfer funds within your account

Text Message Banking – a 24/7 service that allows you to text short code messages such as BAL to get your balance in your checking, BAL ALL to get your balance in all your accounts, and more.

Card Valet – a 24/7 stand alone application that allows you to monitor your debit card by getting alerts on your phone for every transaction. You can also shut off your card when not using it and restrict your card to certain purchase limits or purchase areas.

Things to consider when logging into online banking:

1. NEVER, EVER share your online banking credentials with ANYONE. Period.
2. Always login to online banking platforms from trusted and password-protected internet connections. Free public wi-fi offered in a coffee shop, library, or other public spaces is not appropriate when logging into financial accounts.
3. Make your password hard to replicate. And never write it down along with your username. If you must write it down, store it in a place where others can’t find it.
4. Always check the URL when logging into your accounts. Scammers use phishing and pharming tactics to steal your information. They create fake URLs and websites that mirror your financial institution’s website. Once you’ve logged in with your credentials on the fake site, they can gain access to your account. Never click on a link that comes to you via text or email that you did not request. Instead, type www.membersfirstnh.org into your browser.
5. Use multi-factor authentication or biometric authentication as an additional layer of security to provide another obstacle to thieves.

ACTIVITY

Matching game. Match the resource with the benefit it provides.

_____ Bill Pay	Allows you to budget your account and choose your savings goal (savings, debt repayment, retirement)
_____ Card Valet	A convenient way to deposit checks through your mobile device. Saves you time and money by not having to drive to your nearest branch.
_____ Online Banking	A 24/7 phone service that allows you to get a balance and/or transfer funds within your account.
_____ Mobile Deposit	Emails and/or text messages that I can set up to alert myself of low balances, large deposits, and more.
_____ Electronic Statement	An app that I can download to manage my debit card and get notifications for every purchase I make.
_____ Mobile App	An internet-based banking platform that gives me access to several other services within my account such as E-Statements
_____ Credit Score	A service that allows me to Pay all my bills in one place. I can even set-up recurring payments so none of my bills get forgotten.
_____ Money Management	An app that allows me access to my account via a mobile device or tablet. I can do everything here as I would in Online Banking, if not more.
_____ Alerts & Notifications	A statement of account that shows me all of my transactions, rates, and fees for the month that is stored in a secure place.
_____ Telephone Banking	A service that allows me to keep track of my credit report and even receive offers that might help me reduce my monthly payment on debt obligations.

 

SUMMARY

Members First has a number of tools available to help you with your savings and checking accounts. We are more than happy to review your options with you and help you find what solutions best fit your needs. The best part? All of these financial tools are free!

Developing a budget can feel scary for many consumers. It requires you to be proactive about your financial situation, and for many that can be hard to face. But having a budget is crucial to managing your money, staying out of debt, and ultimately building wealth.

More than anything, budgeting helps you keep track of what money is coming in and what is going out of your pocket – also known as income and expenses.

Income vs. Expenses

Your income is the money you receive on a regular basis. This typically comes from your employer but it can also be from investments, retirement benefits like a pension, social security or disability, amont other sources.

Expenses are the costs required for the items and services you use and depend on. For example, your rent, groceries and gas are typically all expenses you must pay for.

Having a budget allows you to have a clear view of your income and expenses all in one place. And it helps you to be less likely to:

1. Be surprised by the costs of living
2. Overspend and live beyond your means
3. Get behind on bills

And you’re more likely to:

1. Live within your income
2. Be able to save
3. Plan and build for future goals.

ACTIVITY

The first step to developing a budget is gathering all of your financial information. Find your most recent paystubs, bills, monthly credit union and/or bank account statements, and a highlighter or marker. Consider whether you have any of the following:

Income:            

• Employment
• Freelance Jobs
• Retirement Benefits
• Disability Payments

If your income is consistent, you only need one of each. If it fluctuates, use 2-4 paystubs and calculate your average take-home pay. To calculate your average, add your income from each paystub and divide it by the number of paystubs you used. For example, you made $500, $400, $300, and $450 on your last four paychecks, which equals $1650. Now divide $1650 by 4, which equals $412.50. This is your average take-home pay.

Expenses:

• Rent or mortgage
• Insurance
• Electricity
• Gas (Home)
• Water
• HOA
• Car payment or public transportation costs
• Gas (Car)
• Electric (Car)
• Parking
• Cable
• Internet
• Cell phone
• Groceries
• Entertainment (Going out to eat, movies, concerts, etc.)
• Self-care and maintenance (hair salons, nails, therapy, etc.)
• Annual subscriptions (Amazon, BJs, gym, Barnes & Noble, etc.)
• Monthly Subscriptions (Kindle, Streaming Services, gym, etc.)
• Debts (student loans, personal loans)
• Credit Card payments
•  Family expenses (Day care, tuition, child support, alimony, etc.)
• Donations
• Miscellaneous (These expenses come up occasionally like buying detergent, paying for tickets, etc.)
• Savings
• Pets?
• Anything else?

Now that you have all your monthly income and expenses, let’s calculate them into your budget. Use this budgeting chart to get started.

After completing your budget, did you have money left over each month? Or did you find you were coming up short? Maybe you discovered you could keep up with all your expenses, but there isn’t much left over for miscellaneous costs or emergencies?

SUMMARY

If you’ve found that your income isn’t going as far as you’d like, it may be time to reconsider the items in your budget that are eating away at your money. Consider what items in your budget are needs and what are wants. Needs will be things like paying for rent or a mortgage because you need a roof over your head. But things like dining out are wants, and they can add up. Remove some of the items you can identify as  wants from your budget. How might removing these items increase the money you hold onto each month? If you’re having trouble identifying a need versus a want, we encourage you to talk to a trusted family member or friend who can help you in your financial goals.

You now have a clear illustration of your current financial situation – which means, you are on your way to taking charge of your financial future! But this is just a first step. Now you must keep going by having a strategy for spending within your means and sticking to it. Some people find it helpful to have separate checking accounts for bills and miscellaneous spending. In contrast, others find it useful to use cash for miscellaneous expenses so that once they run out of physical money, they know they’re stepping outside their budget. No matter the strategy, find one that works for you.

Also, establish a monthly check-in with yourself or your family to review your budget and spending habits. This will help you assess if you’re sticking to your budget or need to readjust it.

ACTIVITY

Samantha Price needs help with her budget and we think you’re just the person to do it. She always finds that she comes up short at the end of the month when she’s really trying to save for a big vacation. The vacation is going to cost $1,000 and she currently has $200.00 saved.

She has her total monthly income listed as $3200.

Her monthly expenses total $3180 leaving her only $20 extra for savings. At this rate, she feels she will never get there. 

In looking at her monthly expenses below, Samantha believes that everything is essential. How can she reduce her expenses to make her savings goal faster?

Samantha’s Expenses

Rent - $1300

Car - $310

Insurance - $200

Cellphone - $145

Groceries - $400

Electricity - $150

Utility Gas - $75

Car/Gas - $150

Dining Out - $200

Gym Membership - $40

Therapy - $50

Internet - $50

Subscriptions - $40

Miscellaneous (paper towels, oil change)- $70

SUMMARY

Sticking to a budget, especially in the beginning, is not easy. You may fail the first month, or several months. The important part is to keep at it.

How did you fair in helping Samantha Price? There are several options to help her. Maybe she reduces her dining out budget and makes coffee from home? Maybe she decides she can workout from home and cancel her gym membership? Maybe, instead of reducing expenses, she gets a temporary part-time job in something she enjoys to increase her income?

Talking over budget issues with friends and family can be a difficult conversation; however, they may have ideas that you wouldn’t have thought about on your own.

We’ve all heard it before. “Save for a rainy day!” “Save for emergencies.” “Save for your dream home.” But for many consumers, saving feels impossible when you’re living on modest wages, in debt, or don’t know where to start.

That said, saving is one of the most basic ways consumers can set themselves up for financial success. While it typically doesn’t make you rich, it can help you be prepared for inevitable financial surprises that often cause significant financial setbacks.

Here are just eight reasons why it’s important to save:

1. Emergencies and repairs – Cars break down, roofs collapse, and sometimes we have to deal with the cost of medical emergencies
2. Job loss – without consistent income, many consumers may find that they can’t pay their bills or meet basic needs
3. Reduction in work hours – Sickness or injury can cause you not to work
4. Apartment rentals – many landlords require you to have your first and last month rent up front along with a security deposit which is often equal to one month’s rent
5. Buying a home – Homebuying can be expensive, especially because of its upfront costs like the down payment (which can be up to 20 percent of the home price, though not always) and closing costs
6. Education – The average cost of college at a public institution in the U.S. is just over $10,000 per year.
7. Retirement – Experts say you will need between 80 – 90 percent of your annual pre-retirement income to retire
8. Funerals – The average cost of a funeral in the U.S. hovers around $7,800.

While these expenses may seem overwhelming, imagine if you had a modest nest egg or emergency fund that could help absorb the impact of some of these costs when they came up. That’s the value of saving!

Now that we’ve talked about why it’s important to save, let’s talk about how we develop that new habit.

Many people never start saving because they assume it requires them to put away a lot of money and deprive themselves of what they’re accustomed to. But saving isn’t about how much you save at all. It’s just about starting the habit.

Habits are more about discipline than the actual goal we are trying to achieve. So, savings is a discipline you commit to as a part of your daily routine and is key to sticking to a plan. Let’s start small.

ACTIVITY

Set a 21-day savings goal. Many people have heard that it takes 21 days to start and commit to a new habit. Today, you are setting a 21-day savings goal. Commit to matching some of your “want” expenses when you make unnecessary purchases? For example, if you grab lunch that costs $12, can you put away an additional $12 in your 21-day savings challenge plan or piggybank? Maybe you like to buy coffee in the morning that costs $4 or $5? Or perhaps you have more subtle wants, like your favorite chocolate chip cookies or potato chips brand. Try to match those smaller purchases.

If you truly commit, you can save some money at the end of your 21 days. It certainly won’t be enough to buy a home, but it’s enough to start a habit and build a savings fund.

As you match items, think about how you could save even more by replacing more expensive name brand items with store brand items.

SUMMARY

Saving money is essential for financial stability. The key to successful saving is forming the habit, not stressing about how to save large amounts of money right away. As you start to form the discipline of saving, we’re sure you’ll find ways of making adjustments to your everyday spending that will add up in the end.

Having a savings goal is the only way to truly commit to saving long-term. Now that you’ve begun building your savings muscles, let’s think about your goals.

ACTIVITY

Set your goals.

Consider and list some of your short-term goals (6-12 months) and long-term goals (3-5 years).

Choose one short-term goal and one long-term goal and calculate the following:

How much will it cost divided by how long it will take you to save in months. That total will tell you how much you need to save each month.

For example: Next year, (12 months from now) you want to take your family on vacation to Yosemite National Park. It will cost you $3000 in travel, lodging, food, gas, and passes. Calculate the following:

Cost: $3000

Number of months: 12 months

Savings/Month: ?

It’s important to be realistic about savings goals. If you’ve struggled to pay your bills, it may not be wise to focus on saving for expensive luxury items. But it may make sense to set a savings goal to help you get out of debt or have some emergency savings.

Below: List three actions you can take to hep you stay committed to your savings goal.

1.

2.

3.

Remember, saving and growing along your financial journey is not a sprint – it’s a marathon. It takes time to learn and commit to new habits. So even when you get off track, all you’ve got to do is start over and try again.

SUMMARY

It’s important to have goals in life, financial or otherwise. Here are a few goals we recommend to get you started:

• Build an emergency fund                       - A child’s education
• Pay down credit card debt                     - Pay off student loans
• Purchase a vehicle with cash                - Save for college
• Save for retirement                                - Improve your credit
• Start a business                                     - Buy a home

As you think about your financial goals, both short term and long term, make sure you allow yourself to make mistakes. Just remember to keep moving forward!

We know you work hard for your money and we want to help you keep it safe and have it accessible in case of emergencies.

Unfortunately, each year scammers and identity thieves steal billions of dollars from unsuspecting consumers with the most vulnerable being the senior population. These criminals use various communication methods to steal information or trick consumers into handing over their money.

Part I. Common Types of Fraud & Scams

Imposter Scams – Imposters pretend to be someone you know, like a family member or friend, a tech support company, an IRS or Social Security Administration representative, or a company you do business with. It may be someone trying to manipulate you into believing that you have a romantic or close relationship with them. Imposters try to make you trust them so you will provide your personal information. Or they will ask for funds directly by asking you to buy a gift card and give them the information on the gift card, send digital currency, or transfer money. There is often a sense of urgency to these requests so that you won’t have time to question whether it is legitimate. They will also often coach the person to avoid questions presented by credit union staff. Whenever you are unsure whether the person you are talking to is who they say they are, DO NOT send money or share your information. Instead, terminate the communication and call the organization directly (not from a number they’ve provided) to authenticate the communication.

Identity Theft – someone uses your personal or financial information without your permission. They might steal your name and address, credit card or bank account numbers, Social Security number, or medical insurance account numbers. Be sure to regularly check your credit report for inquiries you didn’t make, names and addresses you’re associated with, and credit lines you may not have opened. You can also contact any of the three major credit bureaus (Equifax, Transunion, and Experian) and put a freeze on your credit.

Online Shopping Scams – Scammers develop fake websites mimicking popular retailers’ sites and take your money and payment information without delivering products. They also create counterfeit apps containing malware (malicious software) for the same reasons. Be sure to read refund and return policies prior to making a purchase. Watch out for bogus websites and suspicious apps and only use official retailer websites and apps, which may offer stronger security.

Fake Check Scams – Despite many variations, fake check scams involve two main components:

1. Scammers send personal, business, or cashier’s checks or money orders to you
2. They ask you to send part of the cashed money back to them in gift cards, money orders, or cryptocurrency.

If you deposit a check into your account, you are required to pay funds back to the credit union if the check turns out to be fraudulent. While the credit union does place a hold on checks, when a hold releases, this does not mean that the check is legitimate. If you receive a check from someone whom you have no involvement with, it is best to assume the check is fake; tear it up and throw it away.  Cashier’s checks are not cash, and it can take weeks to validate legitimacy. Do not wire or send gift cards, money orders, or cryptocurrency. Your money is not protected in these transactions.

Prizes, Sweepstakes, and Lotteries – scammers may contact you claiming you won a prize, sweepstake, or lottery and then ask for money or your account information to cover taxes and other fees upfront. They might pretend to be from government agencies or claim you’ve won a foreign lottery, which is almost certainly a scam.

Remember, government agencies do not call to demand money or your financial information to collect a prize. Also, real sweepstakes are free and by chance. If you did not enter a lottery or sweepstakes or are unsure about the call, message, email, or letter, do not send money or share your information.

Business and Job Opportunity Scams – Job and business opportunities that sound too good to be true, often are. If the message promotes doing minimal work with a high salary, pledging guaranteed income, or a proven business operation, it’s likely a scam.

Take your time and get a second opinion or talk to someone who has your best interests in mind. Before accepting a job offer, know that honest employers, including the federal government, will not ask for payment for the promise of a job. Before paying for a business opportunity, research the seller, the company, and the coach’s credentials, and ask for the legally required 1-page disclosure document that tells any lawsuits against the seller, a cancellation or refund policy, and other information.

Disaster Fraud – involves others trying to take advantage of the situation and examples include fake government employees and bogus charities. Fraudsters approach when you are vulnerable and in crisis to exploit your money and financial information while pretending to help with recovery.

No FEMA, federal, or state workers will ask for or accept money from you when applying for disaster assistance. If someone wearing a FEMA jacket or shirt without an I.D., approaches, do not trust or offer any personal information and always ask to see an official I.D. Take your time and contact government agencies or local law enforcement to confirm identity and legitimacy of suspicious contacts.

Social media is also full of illegitimate charities after natural disasters or large tragedies. Do not click on any links that are not supported by well-known, trusted charities.

Check Washing – involves changing the payee names and often dollar amounts on checks and fraudulently depositing them. Occasionally, these checks are stolen from mailboxes and washed in chemicals to remove the ink. Retrieve your mail regularly instead of leaving it in your mailbox. Deposit your outgoing mail at your local Post Office or in blue collection boxes before the last pickup. If you’re going on vacation, have your mail held at the Post Office or have it picked up by a friend or neighbor each day.

Spoofing – when someone disguises an email address, sender name, phone number, or website URL – often by just changing one letter, symbol, or number – to convince you that you are interacting with a trusted source. For example, you might receive an email that looks like it’s from your boss, a company you’ve done business with, or even from your family – but it isn’t. Criminals count on being able to manipulate you into believing that these spoofed communications are real, which can lead you to download malicious software, send money, or disclose personal, financial, or other sensitive information.

Phishing – often uses spoofing techniques to lure you in and get you to take the bait. These scams are designed to trick you into giving information to criminals that they shouldn’t have access to. In a phishing scam, you might receive an email that looks legitimate asking you to update your personal information via a link. That link takes you to a site that looks legitimate, but it’s a spoofed site that might look nearly identical to the real thing. These fake websites are used solely to steal your information.

Phishing has evolved and now includes these variations:

• Vishing – scams happen over the phone, voice email, or VoIP (voice over internet Protocol) calls
• Smishing – scams happen through SMS (text) messages
• Pharming – scams happen when malicious code is installed on your computer to redirect you to fake websites

Skimming – occurs when devices illegally installed on or inside ATMs, point-of-sale (POS) terminals, or fuel pumps capture card data and record cardholder’s PIN entries. Criminals then use the data to create fake payment cards and then make unauthorized purchases or steal from victim’s accounts. To protect yourself, inspect ATMs, POS terminals, and other card readers before using. Look for anything loose, crooked, damaged, or scratched. Don’t use any card reader if you notice anything unusual. Pull at all edges of the keypad before entering your PIN. Then, cover the keypad as fully as possible when you enter your PIN to prevent cameras from recording your entry. Keep in mind that a pinhole camera may be present anywhere on or around the terminal. When possible, use ATMs in a well-lit, indoor location as they are less vulnerable targets. Routinely monitor your accounts and promptly notify your credit union of any unauthorized transactions. Set alerts for transactions through Card Valet.

Pretext Calling – is a social engineering technique where someone uses a false identity or fabricated scenario to trick a target into revealing confidential information, often over the phone. The caller is often pressuring you to take action (give information that is personal, financial, or proprietary) right away rather than contact someone for approval or a second opinion. If you are ever unsure, just hang up.

Part II. What to do if You’ve Been A Victim

If you paid someone you think is a scammer or gave them your personal information or access to your computer or phone, your money might be gone already.

• Report anything you think may be fraud, scam, or bad business practice to the Federal Trade Commission (FTC) 
• Report unwanted calls from telemarketers and register your number on the national Do Not Call Registry via the FTC.
• Report a suspected investment fraud or a problem with your investments to the SEC or report a potentially fraudulent, illegal, or unethical investment activity to FINRA.
• Report a suspected financial/economic crime or fraud to the FBI (e.g. mortgage fraud or investment fraud)
• Report any unfamiliar charges on your account and/or debit card to your credit union. Often the credit union can prevent additional fraud if reported in a timely manner.

ACTIVITY

In the following scenario, there are at least three types of fraud that will be present. Read through the scenario and see how many fraud types you can identify.  

John Smith receives a phone call from the IRS. They tell him that he owes $2,800 in back taxes and if he does not pay, they are going to come and take his vehicle. John is very concerned because needs his vehicle for work and says he wants to pay right away. They tell him their card machine is broken and so they can’t take payment over the phone; however, they accept cryptocurrency. John says he has never used cryptocurrency before but he’s willing to try. They tell him to go to his bank and withdraw the $2,800 in cash and if the bank teller asks what the funds are being used for, tell them “home improvement.” Then, once you get the cash, there is a cryptocurrency ATM at the convenience store down the road. You can go there to complete the transaction. John does as instructed and sends the $2,800 via the cryptocurrency ATM.

What tactics did the fraudsters use? Is there a way for John to get his money back?

SUMMARY

Fraud comes in various many forms and can happen to anyone. The best way to avoid being scammed is to S.T.O.P.:

• See who the sender is
• Take a moment to think about the request; do not rush to meet any demands.
• Opt to get a second opinion
• Proceed only when verified

If you think you have been a victim of fraud or a scam, contact us as soon as possible so we can assist you in preventing any additional loss of funds.

 

Part I. What is credit?

Credit is the ability to borrow money and pay it back later. It allows you to get the things you need now, like a mortgage or a car loan as well as other goods you  may charge with a credit card, with the good faith promise that you will pay it back according to agreed terms. And like other loans, there is typically a cost for using credit in the form of fees and/or interest rates.

Why is credit so important?

Credit is important because it is a powerful tool to achieving your financial goals. It is also important because it signifies your trustworthiness when it comes to paying back your debts. Your credit history tells the story of how you manage your financial obligations and gives creditors an idea of whether you are someone who will pay them back if they lend you money. When consumers have a strong credit history, they have the power to command larger loans and higher credit limits as well as lower interest rates. But when an individual has poor credit history, they have less lending power, accumulate more late fees, and are more likely to be charged higher interest rates when seeking different forms of credit.

Credit can influence almost every aspect of your life, not just your finances. If you have good credit, it can help you reach your financial goals. If you have poor credit, it may prevent you from making many of your goals a reality. Most people realize that poor credit can affect their ability to obtain credit at a reasonable rate, or at all. But there are other adverse effects of poor credit and poor credit management that you may not be aware of, such as:

• Inability to qualify for a mortgage or rental lease
• Inability to get insurance or paying higher insurance rates
• Being unable to qualify for certain jobs

Before borrowing money, it’s essential to have a basic understanding of how to manage money and how credit and borrowing work. If you don’t understand these two things, you can find yourself in deep det that can negatively impact your financial wellbeing for years.

Types of Credit: Revolving Credit and Installment Loans

Revolving Credit typically comes in the form of credit cards, and it allows you to have a line of credit to make purchases with as long as you stay within your credit limit and pay your minimum balance on time. You may use this type of credit to buy anything within your credit limit. The most common items people use revolving credit for are things like groceries, gas, clothing, and other goods but some individuals also put automated bills on credit cards.

You may hear the term open “open credit” when referring to charge cards. This type of credit is considered a type of revolving credit, however, it needs to be paid in full at the end of each billing period, usually monthly. Because the balance must be paid off by the due date, this credit rarely appears on credit reports and doesn’t accrue interest charges. If the balance is not paid in its entirety, however, there can be late fees, other penalties, and derogatory remarks on credit reports. Other examples of open credit are home equity lines of credit (HELOC) and personal lines of credit.

Installment Loans, also known as closed-end credit accounts, allow you to borrow a set amount of money and repay through fixed monthly payments for a specified period. They are usually used to purchase large items such as a home or a car or to cover student loan costs.

TIP: While using a credit card to pay automated bills is an easy way to accrue points or other credit card rewards, many merchants charge additional fees to use a credit card. If the fee is greater than the associated points or rewards earned, use a fee free method instead.

Part II: How do you build credit history?

Building credit can be tricky, especially if you have little or no credit history. Often lenders may not be willing to offer you credit or will offer it with higher fees and interest rates, making it more challenging to pay off the debt. Having no credit history can impact your ability to get loans to go to school, open your first credit card, borrow to  purchase a car, and rent an apartment.

Credit Invisible – Credit invisible mans that a person does not have a credit history with one of the nationwide credit reporting bureaus. According to the Consumer Financial Protection Bureau, 26 million U.S. adults are “credit invisible.” As a result, these individuals have no credit scores. This is often because the consumer is just entering the credit world or because several types of payments they routinely make are not reported to the credit bureaus. Payments such as rent, utilities, and debts from small businesses may not be reported to the credit bureau. As a result, those payments are not included in the consumer’s credit report.

So while the consumer may have a strong history in making payments, if the payments are not reported to the credit bureaus, this will result in the consumer’s credit being “invisible.” Don’t worry. Although it may seem complicated, there are ways to build your credit history. Consider these options:

• Get a secured credit card. A secured credit card is a special type of credit card that requires a cash deposit when you open the account. The money in your account serves as collateral every time you make a purchase. Your credit limit is typically set based on the amount of money you have in your deposit account. If you do not repay the debit, the lender may keep your deposit to recoup your unpaid balance.
• Get a store credit card. Many retail stores and gas stations offer credit cards that are used solely at their stores. Often you can apply to and gain approval on the spot. These types of credit are sometimes easier to acquire than traditional credit cards and they can be a good way to ease into building your credit history if you make small purchases and commit to paying them on time each month. But be careful. These vendor affiliated cards  often have higher rates of interest. And while items like gas or purchases of clothes may seem small, they quickly add up. Remember that you are using these cards to build your credit history, not using them to casually buy things that create debt. So always try to pay your balance off each month.
• Become an authorized user. You can build your credit history by becoming an authorized user on the credit card of someone you trust. Only use this option for people you know will not take advantage of your finances and who consistently pay their debts. While not all card issuers report authorized user accounts to the three credit reporting agencies, some do. In such instances, missed payments and high credit utilization can reflect negatively on the authorized user’s credit report.
• Identify a co-signer or co-applicant. This is an individual who signs the note of another person as support for the credit of the primary signer and who becomes responsible for the obligation if it goes unpaid. Because this option puts someone you know at financial risk if you default by not paying back your debts, you should discuss and agree to how you will handle these issues should they arise before signing on the dotted line.
• Explore student credit cards. Many credit cards companies offer college credit cards for those who are just starting out. Often these cards do not require the same credit history standards as other cards and can be easier to acquire. But be very careful-these cards often come with very high interest rates and fees.

No matter what route you take to building your credit history, the most important tactic is to make payments on time each month. Even if you find that you cannot pay it off your full balance – which is encouraged, always pay the minimum balance due. And if you find yourself in a financially challenged situation where you cannot pay, call your creditor to alert them of your difficulties. If some instances, they will work with you to come up with a payment plan, reduce the interest rate, or even decrease the balance.

Once you have begun to build  your credit history, you want to make sure you maintain it and keep it in good standing. This requires that you stay on top of your finances and debts. Here are some ways to help you maintain good credit:

• Pay your bills on time. Even when you cannot pay off the full balance, pay the minimum balance on time each month. Missing payments will impact your credit score and make it harder to access credit in the future or make the cost of your credit increase. Also, when debts go unpaid for 30 days after their due date, they’re considered delinquent. In these instances, your creditor will reach out to you to collect payment. If you ignore these communications or do not make payment, your creditor may sell your debt to a debt collector. This typically happens within 180 days of delinquency.
• Avoid maxing out your credit cards by keeping a low balance. The more money you owe on your credit card, the more interest you pay. Keeping a low balance will keep your debts manageable and easier to pay off. Also, many credit cards charge “over the limit” fees when you exceed your credit limit on your account. You never want more going out than coming in, so be mindful of your debt-to-income ratio so that you have money to pay off your debts.
• If you are paid more than once per month, consider making payments towards your debt every pay period. This keeps your credit card utilization low and makes your payments smaller by dividing them across two paychecks rather than one.
• Check your credit score and credit reports at least once a year (free of cost). This helps you know where you stand and what you need to do to improve your credit. Also, reviewing your credit report helps you identify credit reporting errors and possible fraud that may be impacting your credit history.
• Develop good savings habits and establish an emergency fund.  Saving is one of the most basic ways consumers can set themselves up for financial success. Having an emergency fund can help you be prepared for and avoid financial surprises that can cause significant financial setbacks.

Debt Collector. Debt collectors are collection agencies and companies (and sometimes lawyers) that collect debts. Often they purchase your past-due debts from businesses or creditors and take on the responsibility of contacting you to receive payment.

Debt collectors typically contact you for two reasons:

1. You are past due on a debt and they want payment
2. Someone you know owes a debt and the debt collector is trying to locate them. According to the CFPB, as long as the collector does not reveal that they are collecting a debt or give details of the debt, it is legal for them to contact friends, family, and even someone’s work to find out how to contact you.

Some creditors have their own debt collection functions in-house, but because many sell your debts to other companies it can be confusing and difficult to know if they are legitimate. Always ask questions and confirm where the original debt came from and ask for and document the debit collection company’s name and address. When possible, review your files to confirm whether you owe the debt and how much you are past-due before giving a debit collector your money. If you find that you do not owe the debt or you’ve already paid it, be sure to contest the debit collection request in writing within 30 days of receiving the information from the debt collector. Because debt collectors and creditors can report you to the credit bureaus and negatively impact your credit report and score, it is important that you document everything in a timely manner.

TIP. Handling debt collectors. The CFPB has sample letters that you can use to respond to a debt collector who is trying to collect a debt and the sample letters include tips on using them. The sample letters may help you get information, set limits on communication, stop any further communication, and exercise your rights.

In some instances, debt collectors may repeatedly call and contact you to collect past-due debts. However, you can ask them to stop contacting you. While this will not prevent them from suing you or reporting the debt to a credit reporting bureau, it should stop any harassing or repeated calling. Be sure to put your request to any debt collector in writing.

The Fair Debt Collection Practices Act is a federal law that governs practices by third-party debt collectors. This law gives consumers protection against any predatory practices such as calling you late at night, using harassing language, and pursuing you for a debt you do not owe. Knowing and exercising these rights can help you gain control of your dealings with debt collectors.

ACTIVITY.

Sit down and write a list of all your debts. Be sure to list what company is owed (such as your credit card company or lender), how much you owe (the balance), the interest rate on the debt, your minimum monthly payment, and the payment due date. Also, look at your monthly income and compare it to your fixed expenses, then determine how much you can pay over the minimum on credit card debts. If possible, commit to setting aside a designated amount each month to pay down debts.

Now that you know how much you owe each month on installment loans and how much you will pay towards your credit card debt each month, you can put your plan in action.

Next, set up automatic payments with your credit union. This will ensure that what you owe is debited from your accounts each month on the same day – helping you to illustrate a track record of paying on time and creating a routine payment habit. If you prefer not to use automatic payments, you can also set up alerts or calendar reminders on your mobile device to remind you that a bill needs to be paid on a certain date each month.

TIP.

Paying off debt can seem impossible. While there are several methods of paying off debt out there, know the pros/cons of each. Here are just a few:

• Snowball Method. The snowball method focuses on the smallest debts first, then rolling the payments from those debts into the next smallest, and so on, until all the debts are paid off. Paying off those smaller debts first may not seem like a big deal at first. However, once you start gaining momentum with the positive change, getting out of debt becomes more realistic, and exciting!
• Consolidation Loan. A consolidation loan is best for combining smaller high-interest credit cards into one loan with a lower interest rate. This ensures that more is going toward the principle of the loan rather than towards interest.
• Debt Consolidation. Debit consolidation is typically a last resort before bankruptcy. This type of consolidation usually requires you ignore your debts for a number of months. Then the company that is doing the consolidation will offer the creditors a settlement amount that is less than your full balance owed. While this does reduce your total owed, it also has a large negative impact on your credit as it will show late payments and possibly charge-offs/settlements. Make sure to get the full picture if you should consider going this route.

Part I: What is a credit report and what’s on it?

A credit report is a statement that has information about your credit activity and current credit situation. It gives the story of your credit history and contains information about where you live, how you pay your bills, whether you’ve been sued or arrested, or have filed bankruptcy. These reports are a record of your credit history that include information about your identity, existing credit, public records, and inquiries about you. Your name, address, full or partial Social Security number, date of birth, and possibly employment information, are commonly reflected on the report. Current and fully paid or closed credit obligations will be listed, such as credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.

Credit reporting agencies sell the information in your credit report to lenders, employers, financial companies, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

The Fair Credit Reporting Act protects information collected by consumer reporting agencies such as credit bureaus, medical information companies, and tenant screening services. It also entitles you to a free annual credit report from each of the three credit bureaus – Equifax, Experian, and Transunion. Additionally, if you are denied credit or have an adverse action, you are entitled to a free credit report from the credit bureau who provided the report used in the creditor’s decision.

AnnualCreditReport.com is the only authorized online source under federal law that provides free credit reports from the three major national credit reporting bureaus. While other websites may lead you to getting your credit report, they sometimes require a fee, try to sell you unnecessary products, or get you to sign up for “free” trials that charge your credit card in the future.

Part II: How to request a copy of your credit report

Visit annualcreditreport.com where you can view and print your records online.

Call 877-322-8228 to make a request.

Download and complete the Annual Credit Report Request Form and mail to:

Annual Credit Report Request Service

P.O. Box 15281

Atlanta, GA 30348-5281

Members First offers a free service called Credit Score that allows you to keep track of your credit, get credit alerts, and more.

Part III: How to read your credit report

Personal Information

• Your name and any name you may have used in the past in connection with a credit account, including nicknames
• Current and former addresses
• Birth date
• Social Security number
• Phone numbers

Credit Accounts

• Current and historical credit accounts, including the type of account (mortgage, installment, revolving, etc.)
• The credit limit or amount
• Account balance
• Account payment history
• The date the account was opened and closed
• The name of the creditor

Public Records

• Liens
• Foreclosures
• Bankruptcies
• Civil suits and judgments
• A credit report may include information on overdue child support provided by a state or local child support agency or verified by any local, state, or federal government agency.

Collection Items

Inquiries

• Companies that have accessed your credit report

TIP. Checking your own credit report will not hurt your credit score. While hard inquiries- this is when a financial institution checks your credit when making a lending decision – can impact your credit score, there is no effect on your credit score if you choose to request that information. Similarly, if a potential employer ran a credit check on your credit history, that would not impact your credit score. These are known as soft inquiries.

Part IV: How to dispute errors on your credit report

Finding errors on your credit report is not uncommon. It is important that consumers thoroughly review their credit reports to spot mistakes and instances of possible fraud. Here’s a list of common errors to look out for:

Identity Errors

• Incorrect name, phone number, and address
• Incorrect amounts that have been opened due to identity theft
• Debts from people with the same or a similar name as you. Always check to ensure that questionable accounts on your file do not actually belong to someone else.

Incorrect account status

• Showing closed accounts as open
• Incorrect account balance or credit limit
• Debts listed more than once
• Incorrect date of last payment, date opened, or date of first delinquency
• Authorized users being reported as account owners
• Accounts that are incorrectly reported as late or delinquent

Data Errors

• Accounts that appear multiple times, often with different creditors
• Incorrect information that has been disputed appears on your credit report

If you identify any errors on your credit report, you should immediately contact the credit reporting bureau that provided your credit report. If the error is related to an account that you did not open, should be closed, or the outstanding balance is incorrect, e sure to contact that company to file an official dispute and get a documented explanation of the issue.

If either the credit reporting bureau or the financial institution are unable or unwilling to resolve the issue, you can file a complaint with the CFPB.

Part V: Your credit score

Your credit score is a three-digit set of numbers that reflects your creditworthiness based on the information in your credit report. It summarizes your credit history, which lenders use to help predict how likely it is that you will repay a debt and make payments when they are due. Lenders use credit scores to decide whether to grant you credit, the interest rate you will pay on a loan or credit card, and other terms of the credit you are offered.

Here are some of the factors that go into your credit score:

• Payment history. Your payment history is the most important factor in your credit score. The best way to maintain a strong payment history is to pay all your bills on time, even if you only make minimum payments. Using autopay can help you stay on track in this effort.
• Credit utilization. This refers to how much of your available credit is used at any given time. Experts recommend keeping your overall credit utilization as low as possible. You can determine your credit utilization rate by dividing your total credit balances by your total credit limits on the day that it is reported to the credit reporting agency. Lower utilization rates indicate that you can use credit responsibly, while a higher credit utilization rate may lead to higher credit scores. Here are tips to lower your credit utilization:
  • Make multiple credit card payments throughout the month to keep your balance low. Your credit cards report to the credit agencies once a month so if you pay off some or all of your balance before your due date, you will lower your credit utilization.
  • If your income has increased and you have a strong credit history, consider asking for a credit limit increase. Be aware that sometimes this can result in a hard inquiry on your credit report.
• Credit history. Your credit history includes your credit accounts and how long you’ve had them, as well as foreclosures, bankruptcies, and debt collections. The longer you have kept accounts in good standing, the higher your credit score will be, provided you do not regularly open new accounts.
• Credit mix. This refers to how many forms of credit you have (credit cards, auto loans, mortgage loans, retail accounts, etc.)
• New credit. Recent additions to your credit and outstanding credit applications can be an indication that you are over-extended. While it is ok to apply for new credit, plan your borrowing so you do not have multiple applications or new accounts at one time. This will help you minimize the negative impact it could have on your credit score.

Part VI: What is a good score?

Credit scores are based on information in your credit file at the time it is requested. Your credit file information varies between the credit reporting agencies because lenders may only report your credit history to one or two of the agencies. Additionally, different credit scoring models provide different assessments of your credit risk (risk of default) for the same consumer and same credit file. This means that your score may vary higher or lower depending on which bureau the lender may be using to determine credit risk.

Credit scores range from 300 (very poor) to 850 (exceptional). Higher scores are viewed as a lower credit risk to lenders, while a lower score indicates a higher credit risk. Keep in mind, however, that each lender has its own standards and approval process. There is no single or uniform “cutoff score” used by all lenders. Many additional factors are considered to determine actual loan terms and interest rate.

Credit is a convenience, and the cost of that convenience is the interest you pay on your debt. A “good” score is subjective, because it really depends on how much credit you are applying for, from whom, and for what.

ACTIVITY.

Check your credit report. Visit annualcreditreport.com to request copies of your credit report. Once you have copies of your credit report, use this checklist to help you review your credit reports. Be sure to read through each item that is listed from your personal information like name and address to all the credit information that is listed.

You can use a highlighter, marker, or pen to circle or highlight any items that are incorrect or questionable. If you are not sure about an item, cross-check it with any records you may have filed away like old bills or statements. If you find any errors, immediately report them to the credit reporting bureau and financial service provider associated with the error. Be sure to have them respond to you in writing so that you have a record of the issue and how it is being handled.