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Good question. A credit score is a three-digit number that lenders use to objectively measure a persons creditworthiness. The score, usually between 450 and 900, allows credit unions to rank members from high to low in respect to their likelihood of repaying credit. If you have a high score, you're likely to repay. If you have a low score, you're unlikely to repay. Your credit score is a snapshot of your finances at a particular moment in time. As information in your credit file changes, so will your credit score.
There are certain factors that affect your score. Payment history is the most important. It tracks how you have paid other debts. Total debt lets lenders know how much you owe other creditors. Keeping yourself under a 40% debt to income ratio is safe. Length of credit history is key because it shows a track record over an extended period of time. New credit and inquiries affect your score as well. A flurry of activity and inquiries on your credit report raises suspicion. And credit mix, that shows that you have a healthy mix of credit, such as credit cards, store cards, loans, and so on.
It's not easy to change your credit score in a short period of time. Your credit score takes your entire credit history into account. If you have chronically paid bills late, you'll need to change your habits to see a change in your score. The best thing you can do to improve your credit score is to pay your bills on time and keep your balances low on credit cards and other revolving credit. If you need assistance working on improving your score, we can help. Just stop in and ask.
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CAR-BUYING TIPS
1. Evaluate your financial situation. Your credit score usually dictates your interest rate. The higher your score, the lower the rate.
2. Good credit history = good options. We always want to be your choice for all your financing needs, sometimes a dealer can offer lower rates. Know your options.
3. Compare prices. Sometimes it pays to shop around and get competitive pricing from dealer to dealer.
4. Consider buying used. The average cost of a used car is less than half of a new one.
5. Look at insurance. Most lenders require collision and comprehensive insurance on autos. On lower-priced used cars, it actually could be cheaper to take out a somewhat higher-cost loan and buy lower-priced insurance.
6. Realize the less you borrow, the more you save in loan interest. In most cases, applying a manufactures rebate to reduce the amount you need to borrow will be cheaper than taking the dealer loan. Combine the rebate with your credit union low rate loan.
7. Pay off your loan quickly. Paying a loan off early can save hundreds in interest charges.
8. Ask us to pre-approve your loan. This way, you can bargain for a dealer discount based on a cash sale, and you can avoid high-pressure sales for a dealer loan.
9. Understand the contract. Read through all the legalese and don't be reluctant to ask questions.
10. Keep transactions separate. Your experience is usually smoother if you purchase and finance separately.
* Go places in a group or with a friend. If you walk with friends at dusk or early evening, wear light colored clothing or apply reflective stickers to your clothes.
* Be aware of your surroundings at all times.
* Don't keep large amounts of cash on you or at home.
* Ask the police to conduct home security checks when you are going to be away for an extended period of time.
* Keep valuables out of easy view.
* Don't unlock your door unless you know or welcome the visitor.
* Beware of people who try to sell you "driveway repairs" or "roof work" because they were "just driving through the neighborhood." Keep them out of your house and out of your wallet.
* Always keep your car locked, whether you are in or out of it.
For more safety tips, contact us for a safety guide.