We're Here to Help (315) 735-8571

Doing the Math

January 27, 2015

Calculator

Ever wondered how to start figuring out what you can afford for a house, car, or other larger purchase? Or how much to set aside to start saving for something? Or how long it will take to pay off a loan or credit card?

Often there are many different options and solutions to each of these questions. Depending on your payment schedule, how much you can put down to start, paying on interest versus principal, etc. can all have a different effect on your answer. There is also often insurance protection you can opt in for that isn’t figured in yet as well. You’ll want to meet with us to really look at all of these factors but before you come, if you’d like to get a general idea, we have some helpful calculators right on our website. Check these out to get started and get a rough idea of where to begin. When you’re ready we’ll help you find the right solution for you to save, or pay down that debt.

setupappointment1

 

Posted in: payments

What exactly is a credit score and how do you get one?

January 12, 2015

Every time you “borrow money” for example finance a car, or get a credit card, you open what’s called a “Trade Line”. As long as you have one trade line with a payment history showing 6 months or more activity, within the last 6 months, you’ll get a score. It’s actually called a Fair Isaac & Company (FICO) score. Your score is made up of your payment history, capacity, length, accumulation, and mix of credit and debt. Here’s how each is weighted and exactly what each of these means:

35% Payment History (on-time pays or delinquencies, more weight on current payment history)
30% Capacity (amount owed on revolving debts/credit cards)
15% Length (length of new credit and total credit history)
10% Accumulation (trade line open dates and the # of inquiries on a credit report)
10% Mix of credit and debt within the last 18 months (percent of revolving credit like a credit card that you can pay down and keep using, and installment credit like a car loan which has a specific pay off date and then you’re done)
Note* Installment debt can help to raise a score. Revolving debt can help to lower a score.

image001

Every score fits into a category with “A” being Outstanding Credit, and “E” being Not-so-Outstanding Credit. Once you know what goes into your score, you can always work to improve it if needed. It is not a set number. If your financial habits change, so too will your score.

Here is the range of credit scores:
“A” Credit 680 +
“B” Credit 640-679
“C” Credit 600-639
“D” Credit 550-599
“E” Credit 549 and below

There are some actions that can hurt your score and others that can help.

These actions will not do you any favors and will help to bring your score down:

  • Missing payments (regardless of dollar amounts, it can take 24 months to restore credit with one late payment)
  • Credit cards at capacity (i.e. maxing out credit cards)
  • Shopping for credit excessively (# of inquiries on the credit report)
  • Opening up numerous trade lines in a short time frame (escalating debt)
  • Having more revolving debts/loans in relation to installment debts/loans
  • Closing credit cards out (this will lower available capacity)

These actions will are in your favor and will help to bring your score up:

  • Pay off or pay down credit cards
  • Do not close credit cards because capacity will decrease
  • Move revolving debt into installment debt
  • Continue to make payments on time (older late pays will become less significant with time)
  • Slow down on opening new accounts
  • Show good credit habits over an extended period of time

There are also a few things that don’t affect your score:

  • Debt ratio
  • Income

To truly see the impact your score has on your finances, check out this table. Look at the savings the folks with an “A” Credit rating receive over those with an “E”. It’s quite a difference.
Screen Shot 2015-01-09 at 3.32.11 PM

                                                                                                Sample chart base on Q4 2014 rates

The ‘549 and below “E” borrower’ credit score will end up paying $64.99 more than the ‘680+ “A” borrower’ credit score pays per month. The cumulative interest is $3,899.31 more over the full 60 month term. That’s a lot of money to be saved!

If your score is not where you want it to be or maybe you’re not even sure what it is, we’d be happy to review it with you. First Source began as a Teacher’s Federal Credit Union, so our roots are based in education. We are happy to sit with you, go through your credit score line by line, and offer suggestions along the way. We also offer a Balance Financial Fitness program free of charge that includes budget worksheets to help keep you on track.

Posted in: Blog, Posts

Subscribe


Archives


Categories


Tags

​charity “best “savings about account” advice American Cancer Society animals Auto auto loan back bad credit bank Berowski Blog Blog Posts Blogs Blue boat loans Branch breach budget business camper Car car loan Card Challenge Check checks children Christmas Chuck College Comets Community compounding conventional Corporate Credit Credit Card credit union Dance the Night Away deposit destinations dividend donation Dream earnings education Entrepreneurs Equifax equity FHA Fical Finance Financial financing First First Source Federal Credit Union for Games Genesis giving Go Good Good News Center Goodison-Bick Greiner Group HCCC Health healthy pet loan Heart herkimer holiday home home buying hot tub house Hug Indoor installation interest Investment JD Arrante Jessie Julie Keller KIDS kitchen remodel kristy lien lienhouse Lilli living smarter LMV loan Loans Local Marketing Maxam medical Mel member members Michael Mike missing Money Market Mortgage Mortgages Motorcycle Financing Motorcycle Loan MVCC National Credit Union Youth Month Neumann New New Hartford nole North Utica of One Oneida online online safety Only order checks Orsomarso overdraft Pamela paperwork Paralympics Parsons pay bills payments personal loans pet care pet financing pet surgery Pete pets plan Posts Power Pre-approval presents President/CEO programs protection purchase QR Questions rates recreational loans Red renovation Requirements Resolutions resort resorts ride Rome Run RV Ryan Misencik Safety savings savings” Schools Schumer security Sen. service Sherman Sinnott Education Center ski resort ski trips sled snowboard snowmobile snowmobile trails social media Source South South Utica spending spots SSHS Staff Stevens-Swan Humane Society students Sue Summer system Tammy Cieslak Tanya Taxes teachers Team testimonial the Tiny's Grill Tips Tom travel Tricia trip TV Union Unite United Up Utica Utica Zoo VA vacation vacation financing vacation loan Video Visa volunteer Waggle Walk Walk-A-Thon Way We Wear Wellness Wells Wendy Why wig Wiggle wild Winner winners Winter withdrawal women Women’s Employment & Resource Center Year's York You You’re Young Young Entrepreneurs Academy YWCA