In today’s world, credit is power. That may seem like an overstatement, but it’s more accurate than you might think. Potential lenders rely on your financial history to determine the odds of you repaying the loan. Most lenders rely on credit bureaus, which maintain as much information as possible about your history with money. Have you paid your bills on time? Do you have enough assets to afford your current debt? Do you have a reliable income? That information gathered, reviewed, and condensed into a credit report. From that report, you are given a credit score to let potential lenders know your creditworthiness. Whenever you try to get a loan, credit card, mortgage, apartment, job, or even auto insurance, your credit score could significantly influence the outcome.
There are several types of credit, but the two most common are revolving credit and installment loans.
Revolving credit is an amount of credit you are allowed to continue using, as long as you maintain a balance that falls within your credit limit. The most common type of revolving credit is credit cards. Your credit score will determine if you can get a credit card, what interest you will pay, and what your card limit is.
Installment loans are for a specific amount and purpose. Once you pay off the loan, it ends. The most common examples are mortgages, auto loans, and student loans. Again, your credit history will play a significant role in your ability to receive installment loans and how much interest you will need to pay.
What’s a Good Credit Score?
There are several formulas used to determine your credit score. Most credit bureaus use a credit scoring formula developed by the Fair Isaac Corporation and is commonly referred to as the FICO score. Your FICO score ranges from 300 to 850. Although the score is subjective, the most common breakdown of creditworthiness is:
- 300 – 559: Very bad credit. It is nearly impossible to obtain traditional loans or credit cards.
- 560 – 649: Bad credit. You may be able to get a loan or credit card but expect high-interest rates and low credit limits.
- 650 – 699: Fair credit. You may be eligible for many traditional loans, but the interest rates may not be ideal.
- 700 – 749: Good credit. You’ll be able to get loans and lines of credit benefits with great perks and low-interest rates.
- 750 – 850: Excellent credit. You’ll easily qualify for loans and lines of credit with the lowest available interest rates.
What Can I Do?
Once a year, you are legally entitled to a free copy of your credit report. Three major credit bureaus offer credit reports, and it’s a good idea to get one from each bureau and review them for accuracy. If you find any inaccuracies, you can report them to the credit bureau to have your report corrected.
As your neighborhood banking partner, First Nebraska Bank is here to help you through all of these steps to make sure your credit is as accurate and strong as possible. In addition to being available to meet and discuss your finances with you in person, we offer a free online course that will help you learn all you need to know about credit scores and reports.
Detect and Avoid Phishing Attempts on Your Personal Security
Has your data been compromised, or “pwned?” How many websites, companies, and databases that you work with have been compromised? A better question may be, “How many have not?” (see if you have accounts with any of these companies.) How do you protect yourself in today’s “Wild West” web, where everything is smart, connected, and online?
Did you know Yahoo has had three billion accounts compromised since 2013? Name a company, and it is likely to have been breached. Remember these are the breaches that have been disclosed. Many businesses have been compromised and do not know it yet. BlueCross/BlueShield, LinkedIn, and even the Department of Homeland Security have had data breaches. If your data is out there, it may have been compromised.
What is in a breach? (see Wikipedia for a wide range of types of data breaches.) It could include anything that was stored by the company that was compromised. It may be just a username but could also be personal info such as your name, address, phone number, email addresses, answers to your security questions, and could also include credit card information, medical information, trade information, or anything else contained in the security breach for that company.
So what do you do when your information has been compromised? Better yet, how do you keep it from getting compromised?
- Check to see if any your email addresses have been compromised at https://haveibeenpwned.com.
- Change your passwords. Use an easy-to-remember phrase using special characters. Make sure your passwords are unique for each site. Change your important password often. Here is an excellent article on how to create a good password that you can remember.
- Turn on two-factor authentication (2FA) where available. Most websites offer this, and you can learn more about 2FA here.
- Use a dummy email account to sign up for sites or services so you can easily set up a replacement email account or change the password easily on it.
- Check your credit reports. The US allows for one free credit report per year from each of the credit reporting companies.
- Sign up for ID protection services. Zanders ID theft protection will help in the ID recovery process as opposed to just monitoring. Several other companies also provide protection.
- Be vigilant about which websites you visit, emails you open, texts, or phishing calls you receive. Being aware of the potential dangers will help you from having your phone, computer, or your identity compromised.
Your data is worth money to some not-very-nice people out there. Security breaches are becoming more and more common every day. Take the time to secure your information better and stay safe.