Consumer Information

Get Your Free Copy of the Consumer Action Handbook

The Consumer Action Handbook, updated each year, is a free resource guide that provides general information on shopping for goods and services and tips about your consumer rights. The Handbook has information to help you file a complaint about a purchase and includes a sample complaint letter that you can use and send to a company. It also includes a consumer assistance directory, with contact information for consumer protection offices in government agencies, and customer service departments at many national corporations.

You can get a free copy of the Consumer Action Handbook in one of three ways:

Online: Order a printed copy of the Handbook online.
Download (PDF – new window/tab) a digital copy of the Handbook.

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By mail: Write “Handbook” to:
Federal Citizen Information Center
Pueblo, CO 81009

There is also a Spanish version of the Handbook, Guía del Consumidor to provide consumer information to Spanish consumers. You can get copies of the Guía in one of three ways:

Online: Order a printed copy of the Guía online.
Download a digital copy (PDF – new window/tab) of the Guía.

Get Adobe Acrobat Reader DC
By mail: Write “Guía del Consumidor” to:
Federal Citizen Information Center
Pueblo, CO 81009

Please note: The information in the Consumer Action Handbook and Guía del Consumidor are in the public domain, so you may copy any portion of the Consumer Action Handbook. Please credit the Federal Citizen Information Center of the Office of Citizen Services and Innovative Technologies, General Services Administration as your source.

Long-Term Planning And Your Auto Loan: How HEFCU Can Help You Save

If you’re thinking about buying a new car, you know that the best time is rapidly approaching. The end of the model year means car prices on current year vehicles will never be lower. That means now is your chance to grab a new car for the lowest possible price.

If you’re a savvy enough consumer to wait until dealers are desperate to sell, you owe it to yourself to wait just a little bit longer to do your research on financing options. Don’t be fooled by dealer promises of zero percent financing. Let’s take a look at three hidden costs that come with these advertised low rates.

First, you may not qualify for zero percent financing. Car commercials don’t talk about the fine print, but dealers place a pile of restrictions on zero percent financing. If your history with credit is anything less than perfect, don’t expect to qualify for these rates. Roughly 60% of people who apply for those loans get rejected.

Second, these loans are usually short-term. If the dealer is offering zero percent financing over the life of the loan, expect it to be no more than 3 years. This means a much higher payment than you’d have on a 5- or 7-year loan. Additionally, many zero percent financing offers only cover part of the life of the loan – usually 6 months. After that, you’ll be paying more in interest.

Third, and most importantly, choosing zero percent financing will usually prevent you from taking advantage of other discount options. Zero percent financing is offered instead of manufacturer rebates and other discounts. Also, these financing packages are usually incompatible with special discount programs like Ford’s Friends and Family package.

This last hiccup can mean zero percent financing is actually more expensive than a loan obtained through a private lender, like HEFCU. To see this effect, let’s take a look at some numbers. We’ll assume that you’re paying $20,000 for a car. You’re presented with two choices. You can take 0% financing on a 3-year loan or you can get a 2.34% interest rate on a 5-year loan from HEFCU, plus a $2,000 rebate. Let’s see how those options break down.

If you take the 0% financing option, your monthly payment will be $555. Assuming no other fees or problems, you’ll pay $20,000 over the lifetime of the loan. Your payments will be higher, and if you can’t make one of them, you’ll be paying more in interest next month (in addition to all the months that follow).

If you take the rebate, though, your monthly payment will be $318 – a much more reasonable amount. Over the lifetime of the loan, you’ll pay a total of $19,092. That means you will save $908 and have a lower car payment.

Even if it’s not incompatible with cash back incentives and other rebates, having outside funding lined up before you go to the dealership can be a tremendous advantage in negotiating. By continually postponing questions of financing, you can let the dealer think there’s still money to be made. This position might lead them to give you more on your trade-in, lower the price of the car or offer you more options.

The loan you get to pay for your car may be the biggest financial decision you make outside of your home. You owe it to yourself to do your research and treat this momentous decision with diligence. You wouldn’t buy a car just because it had an enticing price tag. Why would you do that with a loan?

Remember, dealerships make money from financing. They want you to finance your car through them, because it’s one more way for them to profit from the sale. It’s also one more piece of information they can use to manipulate the total price of the car in their favor. You can take that power away from them by doing your research on car financing.

If you’re considering buying a new car, your first call shouldn’t be to the dealership. It should be to HEFCU. Our professional staff can answer any questions you might have about auto loans and other options to finance your new car. Buying a car is one situation in which that old cliche` “knowledge is power” really is true. Take the time to educate yourself about your vehicle financing options. Your wallet will thank you for it! Call HEFCU today.

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10 Things Consumers Don’t Understand About Credit Scores (new window/tab)

Credit card experts debunk common misconceptions about credit scores.

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 (new window/tab).

Is My Credit Union Federally Insured? (new window/tab)

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.

Available Resources:

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