29 Emmons Drive, Suite C-40
Princeton, NJ 08540
Call us at:
Toll-free (800) 624-3312
Princeton Phone Number (609) 951-0700
Princeton Fax Number (609) 275-4194
Monday through Friday 8:30 a.m. to 4:30 p.m.
Federal Reserve announces online publication on credit reports and scores:
The Federal Reserve recently announced a new online publication to educate consumers on their credit reports and credit scores. In addition to providing consumers with answers to commonly asked questions about credit reports and credit scores, the publication provides tips on how to improve a credit score and step-by-step instructions on how to correct an error in a credit report. The publication, called “The Consumer’s Guide to Credit Reports and Credit Scores” can be found on the Federal Reserve’s website.
Is My Credit Union Federally Insured?
The National Credit Union Administration (NCUA) is the federal agency that administers the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF, like the FDIC’s Deposit Insurance Fund, is a federal insurance fund backed by the full faith and credit of the U.S. Government.
The NCUSIF insures member savings in federally insured credit unions, which account for approximately 98 percent of all credit unions. All federal credit unions and the vast majority of state-chartered credit unions are covered by NCUSIF insurance protection.
Credit unions that are insured by NCUSIF must prominently display the official NCUA insurance sign. No credit union may terminate its federal insurance without first notifying its members.
Here are some important facts to remember about your share insurance provided by the NCUSIF:
Not one penny of insured savings has ever been lost by a member of a federally insured credit union.
As a member of a federally insured credit union, you do not pay directly for your share insurance protection. Your credit union places a deposit into the NCUSIF and pays an insurance assessment based on the total amount of insured shares and deposits in the credit union. Federally insured credit unions are required to deposit and maintain one percent of their insured shares and deposits in the NCUSIF.
Share accounts in federally insured credit unions are insured up to the Standard Maximum Share Insurance Amount (SMSIA), $250,000 as of October 3, 2008. The Emergency Economic Stabilization Act of 2008 increased the insurance coverage on all accounts up to $250,000 until December 31, 2009.
You may obtain additional separate coverage on multiple accounts, but only if you have different ownership interests or rights in different types of accounts and you properly complete account forms and applications. For example, if you have a regular share account and an Individual Retirement Account (IRA) at the same credit union, the regular share account is insured up to $250,000 and the IRA is separately insured up to $250,000. However, if you have a regular share account, a share certificate, and a share draft account, all in your own name, you will not have additional coverage. Those accounts will be added together and insured up to $250,000 as your individual account. Additionally, shares denominated in foreign currencies are insured as outlined in NCUA Rules and Regulations.
Coverdell Education Saving Accounts, formerly education IRAs, are insured as irrevocable trust accounts and will be added to a member’s other irrevocable trust accounts and insured up to the SMSIA. Roth IRAs will be added together with traditional IRAs and insured up to $250,000.
Additional coverage is available on revocable trust or payable on death accounts on a per beneficiary basis. A co-owner’s interest in all joint accounts in the same credit union will be added together and insured up to the SMSIA.
The federal insurance fund has several programs to help insured credit unions which may be experiencing problems. Liquidations or failures are a last resort. If a federally insured credit union does fail; however, the NCUSIF will make any necessary payouts to the credit union’s members. These payouts are usually done within 3 days from the time the credit union closes its doors.
All About Credit Scores
What is a Credit Score: it is a number based on sophisticated models that predict the likelihood of a borrower to repay or default on a loan. Ranging from 300 – 850, this score enables creditors to determine the quality, or the creditworthiness, of a loan application. Higher scores are better than lower ones. Generally, a score of 740 or higher is considered as high credit quality and can receive the most competitive interest rates on loans.
How do I know if my Credit Score is good or bad: generally, a credit score of 740 or higher is considered excellent; 680-739 is good; 640- 679 is fair; 600-639 is higher risk; below 600 is considered highest risk and may not qualify for loan. Lower scores typically pay higher interest rates.
What factors are used in determining a Credit Score: the following variables and weights are used in the calculation of a FICO credit score: Payment History (35%); Outstanding Debt/Capacity (30%); Length of credit history (15%); New credit in past 12-18 months (10%); Mix of Credit (10%).
How can I improve my Credit Score:
Take ownership and responsibility for your debt. Pay all your bills on time.
Do not rush to close out old established credit lines – having “available credit” is good.
Do not use all your available credit – maintain available credit.
Request a copy of your credit report each year – look for errors and potential ID theft.
Report any errors or suspicious transactions immediately to the appropriate Credit Bureau.
Do not apply for new debt unless absolutely necessary. Even so, first ask your existing credit card company if they can increase your credit line.
Consolidate credit card bills with a closed-end installment loan – keep unused cards open without a balance.
Pay off unpaid obligations – small unpaid/past due amounts can damage your credit score.
Find out if your creditor reports to all three major credit bureaus. If not, your payment history will not be reflected in your credit score. Not all creditors report to all three Credit Bureaus.
How can HEFCU help Members:
Secured Credit Cards help those with weak credit or trying to establish credit
Debt Consolidation Loans improve your capacity to borrow
Unsecured Credit Cards improve your capacity to borrow
- Free consultation/review of your credit report
HEFCU reports loan activity to all three major credit bureaus