Knowledge leads to opportunity. We see it every day as we work with families looking to finance a new home, save for retirement, create a better budget or make a plan to rebuild their finances after a job loss or unexpected life events.
We believe increasing your financial knowledge always is a good idea, but as economic uncertainty has increased it is even more critical to understand your options now.
When was the last time you reviewed your credit report? Federal law allows you to get a free copy of your credit report from all three credit reporting agencies once a year. However, right now through April 2021, Equifax, Experian and Trans Union are offering free weekly online reports. Go to annualcreditreport.com to request your credit report today. Accessing your credit is important to understand how your borrowing and payment habits impact your credit score. Monitoring your credit report also helps prevent fraud.
Why is it Important to Build and Maintain a Good Credit Score? A low credit score can end up costing you thousands of dollars with higher interest rates along with higher payments on loans. It may even prevent you from securing the larger items you and your family need, such as a new car, a home or equipment for a small business.
Here are a few tips to help ensure your credit score remains strong, even as challenges arise:
• Pay on time – Regular, on-time payments are an important factor in determining your credit score. When you pay on time every time, you will see the benefits of a higher score that will open new doors to an array of affordable financial solutions. This also will prevent late fees and penalty interest rates from kicking in, making it harder to catch up on existing bills.
• Communicate with your financial institution – If you cannot pay on time, contact your financial institution right away to discuss your options. You may be eligible for payment deferrals, which will give you extra time to pay without impacting your credit score. If you have been impacted by the COVID-19 pandemic, there are options designed to help you. Just be sure to reach out sooner rather than later, ideally before you miss a payment.
• Avoid excessive interest rates and too much debt – Beware of store-front lenders that offer fast or easy cash and be sure to read the fine print. It’s worth the extra time to call your local, community financial institution to learn about the personal loans or lines of credit offered before taking out a quick loan only to find out the interest rate and payment terms are excessive.
Consumers often find themselves more cash strapped than ever when short-term loans come due, creating a vicious cycle of repeat borrowing. A trusted financial partner can help you avoid these situations and keep your payments reasonable.
You can learn more about credit scores, creating a budget, identity theft protection and more using the free online tools available on the Abound Credit Union website. This online learning platform was created specifically to build financial capability and now is the perfect time to do just that.
With financial playlists covering important topics in just 5-10 minutes, it is easier than ever for hard-working Kentucky families to increase their knowledge and improve their financial lives. A little financial training today can go a long way toward improving your family’s financial future tomorrow. Together, we can make more possible for ourselves and our communities.
Here is to a summer of continued learning as we all work together to build a brighter future.