Financial 411 for Monday, May 14
For Monday, May 14 the topic is your credit.
Our panel of Certified Financial Planners includes:
Richard Jenkins, Diversified Capital Management, 472-6221
Grace Ghezzi, Benefit Consulting Group, 474-1707 ext 460
Ted Sarenski, Blue Ocean Strategic Capital, 471-2672
A new survey by the University of Michigan says one in five Americans--20% of us---have more debt (credit card, medical bills and student loans) than savings. Here's some help in keeping your credit rating up:
Credit scores: you can get an annual credit report from one of three agencies, for free, once a year---the advice is, get one every four months so that you're covered year 'round. www.annualcreditreport.com BE SURE to get the web address right, there are lots of similar addresses, but they're not free!
Banks and other lending institutions use your FICO score to determine your interest rates on loans, the credit limit on credit cards and more. (FICO stands for Fair Isaac Corporation, a company put together in the 1950s by engineer Bill Fair and mathematician Earl Isaac)
This service is NOT free---but you can check it at www.myfico.com you can also call 800 319-4433 (9am - 9pm M-F, 10 - 7 on Saturday)
The score is made up 35% on your payment history, and 30% on your debt.
850 is a perfect score, 300 the worst. 720 and up is as good as 850, if you're below 620 you'll have trouble getting credit, or much higher interest rates on loand. In 2008, 692 was the national average.
Student debt:
If you're newly graduated, congratulations! Now, to pay back the loans:
Lifestyle non changes: keep living like a 'starving student,' at least til you figure out your 'new' budgeting
Repaying loans:
~You can consolidate all your loans, but you must do it by the end of June in your graduating year. 800 433-3243 for info.
~Repayment discount: .25 (one quarter)% if you have the amount being paid back taken directly from your bank account.
www.loanconsolidation.ed.gov is the website for info
~You can pay back with one of four options, if it's a federal loan: a fixed rate for payments, graduated payments, extended (up to 25 years if you owe over $30-thousand)) or income-based (payment amounts increase as your pay goes up).
~If you're having trouble making payments (no job yet?) consider deferring, or a forbearance--an agreement to postpone made with your lender, though typically you'll still have to pay the interest that's accumulating.
Credit/Debt help:
There's a not for profit agency, Clearpoint Credit Counseling Services (formerly Consumer Credit Counseling) that will help set up a plan for repayment, often at reduced rates. They will also help with budgeting (even if you're not in debt) and do bankruptcy counseling and housing counseling and education for potential homeowners. In addition to the web, you can reach them at 800-479-6026.
Tonight's was our last Monday night Financial 411 call in for the season, but if you have questions over the summer break you can get in touch at Money@CNYCentral.com
