Presentation on theme: "Lower auto and homeowner insurance rates Lower rates on car loans Your credit may even affect your ability to get a job!"— Presentation transcript:
Lower auto and homeowner insurance rates Lower rates on car loans Your credit may even affect your ability to get a job!
Insurance companies have found a correlation between risk of accidents/claims and credit scores Credit card companies and banks look at your credit history to determine the likelihood you will repay the loan More risk = Higher rates
Better chance with a credit union Open a savings account first – can still get ATM card, receive direct deposits, etc. May be able to open checking account at bank used by employer Open an investment account; most investment banks will open a bank account for you without a credit check (but may cost $500 or more to open)
Apply for a credit card and make sure you pay it off each month Discover.com has good cards for students with cash back incentives Set up your credit card for automatic payments so you are never late
Secured Credit Cards Some people dont quality for regular credit cards Secured cards require a cash collateral deposit that determines your credit line Banks may reward you for good payment history and add to your credit line without additional deposits
People usually qualify for a regular unsecured credit card after a year with the secured card Switch as soon as you can to an unsecured card as fees and rates are lower Better than a prepaid card for rebuilding credit because a prepaid card = debit card (they are not reported to the major credit bureaus)
Watch out for fees: Dont pay an application fee Dont pay insurance policies!! Annual fees lower at credit unions Read the fine print! Ask how long the issuer will keep your deposit after card is closed Make sure card issuer DOES report to three major credit bureaus Ask the card issuer if they flag report to credit bureaus as a secured credit card
Get the lowest annual fee you can Just charge a few things each month and pay off entire balance each month Dont go into credit card debt! It can takes YEARS and YEARS to repay: CalculatorCalculator Compare credit cards at BankRate.com or look into cards through a credit union (i.e. Global)BankRate.com
annualcreditreport.com is free Can check for free once a year from each credit bureau TransUnion Experian Equifax
Credit reporting agency used by 80% of banks You can get one free report per year from their Web site Some credit unions dont use ChexSystems If you owe one bank money, you may not be able to open account at another bank if they run report in ChexSystems You can apply for account online to avoid embarrassment
Location across from STA Plaza They offer secured loans for $250 or $500 with no credit check and no fee at 5% interest. They are reported to Equifax as installment loan. They offer two secured credit cards; to qualify, you cant owe more than $500 to another bank. Annual fee is low ($12 or $18) and interest rate about12% or 18%.
$20 to join (one-time fee) After 6 months to a year, most qualify for a regular credit card (it depends on your credit history)
How do I pick a stock? What are good investments? Whats a Roth IRA?
What things should I look for?
What is equity? How do I choose a bank for a home loan? Compare, compare, compare! Points vs. interest rate Debt-to-income ratio? Debt-to-income ratio Does it make sense to refinance? Selling a home to limit taxes Tax InfoTax Info Best place to invest that money?
You have to pay extra for it Precise formula for calculating it is a mystery, but experts estimate it is calculated this way: 35% based on your payment history 30% based on credit utilization 15% based on length of time youve had credit 10% based on new credit 10% based on the types of credit you currently have
How do I estimate my power bill? Track your expenses for a few months to develop a budget/see where your money goes Consider using money buckets or envelope system STCU Web Site
Limit the number of credit cards you have Clean up your score If a company no longer exists or a bank has merged with another, bureaus are required to remove information because it is no longer verifiable Try to keep debt utilization rate low (people with best credit scores borrow 7% or less of limit) All 3 credit bureaus allow you to add a brief statement to report, which may help with employers
Credit repair offers Some dispute all of your accounts, but after credit bureaus validate the accounts, they appear on your report again Secured credit cards with monthly fees or application fees
How do you have paid items removed from your credit? InfoInfo How do you build your credit? How can I get the best car loan deal? How is interest calculated? Stay tuned! Teaching kids they cant buy everything Choosing lowest car insurance Considering bankruptcy
Moneysavingmom.com Clarkhoward.com Clark Howard Dave Ramsey
Groceries Buy generic brands Consider low-cost protein sources like beans Get the Wednesday ads and stock up on good deals Use leftovers
Clothes and furniture Buy second hand Craigslist Consignment shops Insurance Get several quotes Increase deductible Check out books from the library Download music for free with Freegal
If you spend 30 minutes clipping coupons and you save $10.00 on groceries, thats like earning $20 an hour tax-free!
Moneysavingmom.com Clarkhoward.com Clark Howard Dave Ramsey
Why do some rich people pay lower tax rates than middle-class taxpayers? Capital gain taxes vs. ordinary income Different tax structures in different states Income taxes versus sales taxes
Use W-4 form worksheet to determine number of allowances
Cost of using money You pay interest when you borrow money You earn interest when you invest money High interest rates are good for savers, bad for borrowers.
First and second mortgages Refinances
Ties up your money for a period of time Early withdrawal penalties, but higher rates than regular savings No fee to purchase Doesnt help build your credit Invest in bonus rate savings accounts first