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Five Ways to Boost your Credit Score Starting Now
Do these things to build better credit and enjoy the perks of lower loan rates
By Jean Chatzky* Being denied a loan for a home or a car — or anything — can feel like a punch in the gut. But no matter how you got to the place where you don’t qualify for the best APR rates, or how long your credit has been less than ideal, all is not lost.
There are strategies you can take to begin building your credit back up. Yes, it may require some time and lots of patience on your part, but you won’t regret the effort.
Here are a few suggestions to bump up your credit starting now:
Get your credit report and dig in
Knowledge really is power. You are entitled to a free credit report and score any time you like through SavvyMoney. Pulling your own credit information — which is like a report card for how you handle money — won’t impact your score. It’s also a good idea to request one report from a different bureau (Experian, Equifax and TransUnion) every four months so you can make sure there are no errors showing up on individual reports. Get these for free at AnnualCreditReport.com.
If you see anything on a report that’s not correct, report it. About 20% of all credit reports have mistakes, so you need to really scour the document to ensure everything is ship shape. A mistake could mean a lower score even if you did nothing wrong. As the global pandemic led to job losses and other financial hardships, the Federal Trade Commission has noted an increase in credit report errors reported by consumers.
Automate to avoid late fees (and a lower credit score)
Your credit score is largely based on your payment history, counting for about 40%. Scores range from 300 to 850, the higher the better. Here’s the thing: Even one late payment on a credit card can lower your score by as much as 100 points. That’s huge. And that’s why it’s so important to pay your bills on time, or even early, every single due date.
One way to do this is to use online banking and set up automatic payments. We’ve said it before but it is worth repeating. Make it easy on yourself. You can do this by setting up electronic calendar reminders on your smart phone, tablet or laptop, to help nudge you to pay your bills a day or so early. If you are old school, put a big red dot on the paper calendar in your kitchen or office, tape a note to your bathroom mirror or find some other clever way to remember. You can thank me later!
Pay down debt then stay low
Lenders don’t want to see sky-high balances on your credit cards. That means making an effort to pay down balances if you’re carrying them — and then refrain from maxing out your cards if you can help it. Owing more than 30% of your credit limit can be a red flag to those in the money-lending business. You should instead aim to use between 10% and 30% of the total credit you have.
Use it or lose it
If you don’t use a credit card in six months or longer, your credit card issuer could cancel the account and that, in turn, could ding your credit score. If it was the card you held for the longest period of time, that’s a double whammy, because the longer your relationship with your lender, the better it is for your score. To keep an unused card current, make a small purchase once a month then immediately pay the bill.
Consider a secured credit card
If you get turned down for a traditional credit card because of a low credit score or no credit history, you can try opening a secured credit card. This type of card allows you to give the issuer (a credit union or a bank) a certain amount of money up front, which becomes your credit limit. Over time, perhaps 18-24 months of good behavior, many secured cards will transfer to a regular credit card.
*This guest article is from the “Your Money Blog” in Mid Oregon’s Digital Banking Credit Savvy resource. It is made possible by SavvyMoney. “Five Ways to Boost your Credit Score Starting Now” by Jean Chatzky with Casandra Andrews was published in June 2021.
What You Need to Know about the 2021 Child Tax Credit
IRS sets dates for advance child tax credit payments for more than 36 million families
By Chris O’Shea* In June, more than 36 million eligible American families are expected to receive a letter in the mail from the Internal Revenue Service about monthly child tax credit payments slated to start on July 15.
Eligible families should begin receiving advance payments, says the IRS, either by direct deposit or check. The payment will be up to $300 per month for each qualifying child under age 6 and up to $250 per month for each qualifying child ages 6 to 17.
Child Tax Credit Changes
For one year, the American Rescue Plan has raised the maximum child tax credit in 2021 to $3,600 for qualifying children under the age of 6 and to $3,000 per child for qualifying children between ages 6 and 17. Before 2021, the credit was worth up to $2,000 per eligible child, and those 17 and older did not qualify for the credit.
The new maximum credit is available to U.S. taxpayers with a modified adjusted gross income of:
- $75,000 or less for singles
- $112,500 or less for heads of household
- $150,000 or less for married couples filing a joint return and qualified widows and widowers
For those who earn above the income thresholds, the extra amount higher than the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every extra $1,000 in modified adjusted gross income.
Another big change
The entire child credit is fully refundable for 2021. That means eligible families can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child.
When the payments go out
Mark your calendars. The other advance payments in 2021 can be expected on Aug. 13; Sept. 15; Oct. 15; Nov. 15; and Dec. 15, according to the IRS.
Plans call for a second IRS letter to be mailed soon that estimates how much money qualifying families should receive monthly from July through December 2021.
The expanded Child Tax Credit was authorized by the American Rescue Plan Act, enacted by lawmakers in March 2021. Families may be eligible based on information from their 2019 or 2020 federal income tax returns or details provided by using the non-filers tool on IRS.gov last year to register for an economic impact payment.
What families need to do
If you already filed taxes for 2020 and 2019, sit tight. Most families who qualify don’t need to take action to get their payment. Typically, the IRS will calculate payment amounts based on 2020 tax returns. If that return hasn’t been filed or processed, the IRS says it will use your 2019 return to determine the payment.
Late tax filers, get to it
Remember the slow roll-out of first-round stimulus payments in 2020? If you haven’t filed taxes in 2019 or 2020 and you should have, don’t wait. Filing tax returns promptly ensures the IRS has up-to-date banking information for you and details about your qualifying children.
You can opt out
Soon, an online tool developed by the IRS will allow families to unenroll from receiving the advance payments this year. Instead, they can choose to get the full amount of the credit when they file their 2021 return in 2022.
Online portal planned
This summer, the IRS says it’s making plans to add additional tools and online resources to help families navigate the advance child tax credit. And later this year, you should be able to visit IRS.gov and use a child tax credit update portal to notify the IRS of changes in income, filing status, or number of qualifying children; update direct deposit information and make other changes.
This guest article is from the Your Money Blog in Mid Oregon’s Digital Banking Credit Savvy. resource. It is made possible by Savvy Money. “What You Need to Know about the 2021 Child Tax Credit” by Chris O’Shea with Cassandra Andrews was published in June 2021.
CyberSmart Tips To Help Prevent a COMPROMISED ACCOUNT
The transition to living life through our devices has become very real for scores of people and businesses. By now, the coronavirus has changed our lives in ways we never expected. This transition includes doing most things from home like working, banking, healthcare, education, shopping, socializing, and more. Unfortunately, adapting to online life also gives bad actor’s a cornucopia of targets to exploit. There’s currently an historic rate of cybercrime thanks the increase in targets and coronavirus-themed lures that grab our attention. That being said, every user has the power to do more than cross fingers and hope for the best. There are proactive steps to take when you suspect an account may be compromised, including ways to help keep it from happening to begin with.
Red Flags of a Compromised Account
Look for irregularities in any accounts as a sign of compromise. Receiving alerts from businesses, banks, social media, and other accounts that logins to your accounts were attempted is a huge red flag. It doesn’t necessarily mean there’s been a compromise, but it lets you know that others have tried. Taking immediate action on any suspicious activity, no matter how insignificant it may seem, should always be Step One.
Immediately change account passwords, especially those showing activity you didn’t authorize. Best to freeze accounts where finances and other important data are kept, when possible; you can always unlock them later.
Regularly check credit reports for irregular activity and don’t hesitate to freeze them from further use. TransUnion, Experian, and Equifax no longer charge to freeze and unfreeze your accounts, so don’t hesitate to do so if needed.
Alert Your Accounts, Especially Financial, about Compromise
If you suspect a financial account has been compromised, alert ALL of the institutions that deal with your finances. These should include banks, credit card companies, credit bureaus, Google, Apple, Amazon, PayPal, Venmo, and other accounts where your financial data is stored or from where it’s accessed. Alerting the involved companies can also serve as a heads-up to them that a larger hack may be in progress and may prevent others from being victimized.
Protect Your Passwords and Change Them Regularly
Protecting the keys to your kingdom starts with savvy and strong password use. Studies show compromised passwords are responsible for 81% of hacking-related breaches. All passwords should be long and include upper- and lower-case letters, numbers, and special characters. Change them regularly and consider using a password manager if you can’t remember them all. Also, look for accounts and apps you haven’t used in a long time and delete them to reduce password exposure and hacking opportunities.
Some of the survey statistics on poor password use include:
- 65% of people reuse passwords across multiple or all accounts
- The average person reuses the same password up to fourteen times
- 91% say they understand the risks of password reuse across multiple accounts, but 59% admit they do it anyway
Use 2FA and Update Preferences
Two-factor authentication (2FA) or multi-factor authentication (MFA) should always be used when available. They add layers of login protection that verify it’s you who’s signing into your account and not a cybercriminal. Update preferences used for your 2FA, especially if you use security questions as part of authentication. The answers to these questions can often be found on your social media and other accounts, and if they are, be assured hackers will find them. Always update 2FA immediately if account compromise is suspected.
Limit What You Share Online
Your PII (personally identifiable information) should remain with you and not broadcast on social media and other sites. PII nuggets such as your address, where you live and work, schools attended, LinkedIn profile and info about family and friends are cobbled together by hackers to create an identity profile that helps them enter your accounts. Hijacked PII is also used for socially engineered and spear-phishing email attacks. These methods use your PII for email phishing and targets those you know, including co-workers, family, and friends. The emails use your identity as bait for the recipients who blindly trust the email and its contents because they believe you are the sender.
For more articles on cybersecurity and related topics, visit Mid Oregon’s Security and Fraud Center.
If you suspect your Mid Oregon Credit Union account or card could be compromised, please contact us.