16 Apr

How to Begin Building a Strong Credit History

There are many reasons why having a strong credit history is important. It can affect everything from your ability to rent an apartment to getting a good job.

Payment history and credit score are two of the most important factors contributing to a positive, healthy credit record. Individuals who demonstrate personal responsibility by paying back the money they borrow — on time, every time — are typically rewarded with higher credit scores. A high credit score, in turn, shows lenders that you are worthy of trust for even more credit. (Scores range from 300 to 850, the higher the better.) And, utilizing credit wisely opens the door to meeting your financial goals — both short- and long-term.

If you are just beginning to utilize credit, here are some tips for starting off on the right foot:

Use your credit card(s) wisely.

It’s true that you need to use credit to build credit and having a credit card is one way to start. But rather than using a credit card sporadically, consider charging small amounts regularly that you can afford to pay off every month. Also limit how many credit cards you apply for — two is a good number — with one of the cards being a VISA® from Navigator Credit Union.

Avoid using all your available credit.

Each credit card comes with a pre-established credit limit. Don’t top out your card by using all your available credit. It’s too easy to go over your credit limit and potential lenders don’t like to see maxedout cards. Instead, use 10 percent to 30 percent of what’s available to you.

Apply for a car loan.

Making affordable, monthly car payments is an excellent way to build a healthy payment history. A car loan represents a different type of loan than a credit card. You are borrowing a fixed amount with a specific payment and repayment term. You may need a co-signer, such as a parent, for a car loan.

Keep track of your credit.

It’s a smart idea to check your credit report at least once a year for possible errors. There are three main credit-reporting companies: TransUnion, Equifax and Experian, and you are allowed a free credit report from each every 12 months. You can check your credit reports at www.annualcreditreport.com.

We Can Help

Whether it’s a credit card or an auto loan, Navigator Credit Union can help you on your way to building a strong credit history. Come in and meet with one of our representatives today.

While you can recover from credit missteps — such as missing a payment or going over your credit limit — it can take up to seven years for your credit score to recover after a significant drop.
16 Apr

Tame Your Credit Card Debt

You’re a young adult, starting to build your career. You’re trying to juggle student loan payments, pay your rent and cover other bills, so it’s tempting to rely on a credit card to get you through next payday. No big deal, right?

Think again. One of the first lessons of young adulthood: It’s much easier to get into debt than out of it.

According to the National Foundation for Credit Counseling, the average 25- to 34-year-old carries $5,000 in credit card debt. If that debt isn’t managed well or it grows bigger, imagine the interest you’d be paying on that latte or pair of shoes you couldn’t live without at the time. Before you go wild with the plastic, these five tips will help you maintain control of your debt.

» Tip #1 Don’t spend more than you earn.

A survey by Renters.com says young adult renters overspent their income by $100 each month. Avoid using credit cards for everyday purchases that could easily be paid with cash. Remember too, willpower goes a long way.

» Tip #2 Get a handle on what you owe.

If you carry a balance on one or more cards, the key is to pay more than the minimum each month to reduce the debt more quickly or, better yet, pay the balance in full. These good habits will help establish a strong credit history.

» Tip #3 Close your eyes when you get the mail.

Avoid the temptation of the parade of credit card offers that entice you with low introductory rates and balance transfers. Applying for new cards all the time can ding your credit score.

» Tip #4 Stick to a budget.

By balancing your income against expenses, you’ll keep a firm grip on wasteful spending. If rent, transportation and food eat up the greatest share of your monthly budget, then consider living with a roommate or several, carpool to work at least a few times a week, and dine in instead of out. You may miss the social scene, but your wallet won’t.

» Tip #5 Build up some emergency savings.

Setting aside a little every month avoids the need to put a surprise expense on a credit card. Medical or car troubles can rack up debt in no time. An emergency fund will make it a lot easier to handle when you least expect the unexpected.

Now that you have tips to tame your debt, want something to roar about? Consider a low or no fee credit card from Navigator Credit Union. There are options fit for you, your goals and your lifestyle. Visit www.navigatorcu.org or call (228) 475-7300.

09 Apr

What Does Your Credit Score Say about You?

Whether you are looking to buy a car, refinance a mortgage or rent an apartment for the first time, your credit score can tell a lot about your financial history.

Your FICO® score is a number formulated based on your credit history. It helps lenders evaluate your credit risk. Several factors go into your score, including payment history, amounts owed, length of credit history and types of credit used.

What’s a Good Credit Score?

Your FICO score is rated on a scale of 300-850. You want a high score, because a good credit rating can help you obtain better rates on all of the major purchases that life brings, including a car, home and credit cards.

To improve your credit score, follow these tips:

  1. Keep current on all your payments. This is the biggest thing you can do to boost your credit score. Be sure to pay your bills on time each and every month.
  2. Avoid closing old accounts. It diminishes your total credit available and can raise your credit utilization ratio.
  3. Don’t open new accounts. This can look like you plan to borrow a lot of money, which could stretch your finances too thin.
  4. Settle all fines and tickets. An outstanding library fine or parking ticket can reduce your score if a collection agency gets involved
  5. Check your credit report for errors. Your credit score is based on the information included in your credit report, so it pays to review it for inaccuracies. Federal law entitles you to a free copy of your report once every 12 months from each of the three major credit bureaus. Your credit score is also available for an additional charge. Simply go to www.annualcreditreport.com or call 877-322-8228.

For more information on how Navigator Credit Union can help you with your financial needs, call 228-475-7300 or visit www.navigatorcu.org for more information.

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