Today’s world can be harsh. Every day we face obstacles that drain us emotionally, physically, and financially. We somehow seem to muster up enough strength to get through the emotionally and physically trying times, but what happens when there is just NO money left? Fear, depression, and avoidance are common ways to handle financial difficulties. It doesn’t have to be that way. Taking control, making a plan and asking for help are the best ways in which to deal with financial problems. Below are some ways to make a financial crisis easier to manage and produce positive results:
Track Your Spending: If your budget continuously comes up short, take a week or two and log all your purchases and spending. This will highlight areas that are draining your wallet. You just might be surprised to see how much you’re spending in a week on unnecessary items.
Make a Priority List: Sit down and make a list of all your “Must Haves.” Make sure to include the due dates and weekly expenses for each. This list should include housing, utilities, and any expense needed to secure a roof over your head. Account for a vehicle, gas, and related travel expenses so that you can make it to work to earn that next paycheck. Also, debts with monthly payments, like credit cards or loans, should be listed. Keeping these on track will ensure no added fees, no increased interest rates, and no aggressive collection action. Food and personal items will also need to be calculated. Be honest with yourself… it’s your list!
Construct a Plan: Your Priority List will allow you to start making a financial plan. You will know what needs to be paid and when. You can start to budget individual debts weekly or biweekly depending on your pay schedule. It helps to make a plan on paper. If you see it, it will happen!
Talk About It: If, after making a plan, you are coming up short, be open and honest about it. Every credit union, bank, and utility company has a Debt Resolution or Collections Department. People are in place to help you! Making contact with these people will ensure a productive working relationship. Most have programs or ways in which to make it easier for you to make payment. Establishing an open line of communication is a great way to work through budgeting shortages, past due balances and avoiding aggressive collection action. We all know how hard it is in today’s world and it is okay to ask for help.
Debt Management Companies: There are companies that extend their services to help you create budgeting plans. Be sure to research which company you choose to work with. One trusted company is Money Management International, with offices in Auburn, South Portland and Bangor.
Your Credit Union encourages a proactive approach to financial hardship. We understand the stresses of life and that there seems to never be enough money to go around. We have a knowledgeable Collection Department ready and willing to help you. Contact us with any questions or to discuss an appropriate course of action for you. You may reach our Collection Department at 207-353-4144.
Just remember, where there is a will, there is a way!
Article written by: Tracy (Lisbon Credit Union Loan Collector)
Friday, July 11, 2014
Thursday, June 19, 2014
Get Financially Prepared to Purchase a Home
Qualifying for a home loan remains a hurdle for anyone without a solid balance sheet. A potential homeowner must have the right income, the right credit score and the right down payment to get the best rates available. What follows are a few tips to consider as you pursue the home of your dreams.
1. Assess your financial picture and see how much house you can afford. Before you get too involved in looking for a new home, you should take some time to evaluate your finances thoroughly. If you’re a first-time homebuyer and haven’t been saving money or have been living paycheck-to-paycheck while dealing with student loans and other debt, you’ll likely have to make major lifestyle changes to get in a better position to buy a home.
Ultimately, you want to get an idea of how much of your monthly income you can reasonably afford to spend on a home. We suggest you use a formula to calculate what you can afford: add up the monthly house payment – principal, interest, taxes and insurance – and divide this into your gross monthly income. Your monthly housing payment should not exceed 28% of your gross monthly income.
2. Budget like you were already a homeowner. You have figured out roughly how much money you should devote to housing. But other costs need to be considered, such as repairs and utilities which usually run higher than if you’re renting. If you are currently renting, you should calculate the extra costs that come with homeownership and start setting aside that amount. This accomplishes two goals: saving money for a down payment and getting accustomed to the financial obligations of homeownership.
3. Shoot for 20% down. While lenders will allow homeowners to make a down payment as little as 3% of the purchase price, you should shoot for 20% down in order to avoid paying private mortgage insurance or PMI. This is a premium that is added to your mortgage payment and can be quite expensive. In addition to a down payment, you’ll also have to set money aside for closing costs, which can run into thousand of dollars.
4. Tackle any credit score problems early. A person’s credit score is a critical element in determining how much money homeowners can borrow and at what interest rate. Buyers looking for the most favorable rates on a home loan must have a FICO score of at least 720. Prospective homebuyers should check their credit report for any errors that may be weighing down their credit score. Disputing errors can take months, so it’s best to get this process going well before you’d like to buy a home.
A potential homebuyer should also avoid taking on new debt in the months before you set out to buy a home, as new loans or credit cards can negatively affect your credit score.
5. Get financial documents in order. When it comes to formally applying for a loan, you will need to provide at least two months of bank statements, paystubs and W-2s. If you are self-employed, you will need two years of tax returns. You should start pulling this information together before you apply for a loan.
6. Get pre-approved for a loan. Before you begin your home search, you should speak with one of our Loan Officers about being pre-approved. Once you are issued a pre-approval letter, this is a solid indication of what you can spend. This will also let the brokers and the sellers know that you are serious about purchasing a home.
Our Loan Officers are available to assist you at any time and will be happy to help you with what can often times be an overwhelming process.
Lisbon Credit Union is an Equal Housing Lender.
1. Assess your financial picture and see how much house you can afford. Before you get too involved in looking for a new home, you should take some time to evaluate your finances thoroughly. If you’re a first-time homebuyer and haven’t been saving money or have been living paycheck-to-paycheck while dealing with student loans and other debt, you’ll likely have to make major lifestyle changes to get in a better position to buy a home.
Ultimately, you want to get an idea of how much of your monthly income you can reasonably afford to spend on a home. We suggest you use a formula to calculate what you can afford: add up the monthly house payment – principal, interest, taxes and insurance – and divide this into your gross monthly income. Your monthly housing payment should not exceed 28% of your gross monthly income.
2. Budget like you were already a homeowner. You have figured out roughly how much money you should devote to housing. But other costs need to be considered, such as repairs and utilities which usually run higher than if you’re renting. If you are currently renting, you should calculate the extra costs that come with homeownership and start setting aside that amount. This accomplishes two goals: saving money for a down payment and getting accustomed to the financial obligations of homeownership.
3. Shoot for 20% down. While lenders will allow homeowners to make a down payment as little as 3% of the purchase price, you should shoot for 20% down in order to avoid paying private mortgage insurance or PMI. This is a premium that is added to your mortgage payment and can be quite expensive. In addition to a down payment, you’ll also have to set money aside for closing costs, which can run into thousand of dollars.
4. Tackle any credit score problems early. A person’s credit score is a critical element in determining how much money homeowners can borrow and at what interest rate. Buyers looking for the most favorable rates on a home loan must have a FICO score of at least 720. Prospective homebuyers should check their credit report for any errors that may be weighing down their credit score. Disputing errors can take months, so it’s best to get this process going well before you’d like to buy a home.
A potential homebuyer should also avoid taking on new debt in the months before you set out to buy a home, as new loans or credit cards can negatively affect your credit score.
5. Get financial documents in order. When it comes to formally applying for a loan, you will need to provide at least two months of bank statements, paystubs and W-2s. If you are self-employed, you will need two years of tax returns. You should start pulling this information together before you apply for a loan.
6. Get pre-approved for a loan. Before you begin your home search, you should speak with one of our Loan Officers about being pre-approved. Once you are issued a pre-approval letter, this is a solid indication of what you can spend. This will also let the brokers and the sellers know that you are serious about purchasing a home.
Our Loan Officers are available to assist you at any time and will be happy to help you with what can often times be an overwhelming process.
Lisbon Credit Union is an Equal Housing Lender.
Saturday, May 17, 2014
Obtaining a Copy of Your Credit Report.
Question: I’ve been hearing a lot about Identity Theft. How would I go about obtaining a copy of my credit report to make sure it contains correct information?
Answer: Federal law requires that each of the three reporting agencies (Equifax, Experian, and TransUnion) give you a free credit report every 12 months, upon request.
You can order your free report from
www.AnnualCreditReport.com, a site authorized by the Federal Government. You usually get the report immediately by ordering online. You may also make a request by phone or mail. This could take up to 15 days.
To request your report by phone, call 1-877-322-8228 and there will be a simple verification process. To request your report by mail, download the request form, print it and mail it to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA. 30348-5281
Please be advised that these reports do not include your credit score. It contains all the information that a credit reporting agency has gathered about you.
Answer: Federal law requires that each of the three reporting agencies (Equifax, Experian, and TransUnion) give you a free credit report every 12 months, upon request.
You can order your free report from
www.AnnualCreditReport.com, a site authorized by the Federal Government. You usually get the report immediately by ordering online. You may also make a request by phone or mail. This could take up to 15 days.
To request your report by phone, call 1-877-322-8228 and there will be a simple verification process. To request your report by mail, download the request form, print it and mail it to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA. 30348-5281
Please be advised that these reports do not include your credit score. It contains all the information that a credit reporting agency has gathered about you.
Wednesday, March 26, 2014
Don't Forget to Call us When...
If your wallet is stolen, you’d call us. If you were locked out of your online banking, you’d call us. Here are some other times you should be reaching out to us, but may not think of it:
1. You have a new home or cell phone number, or new email address. We need to update this information on your account so we can reach you if we have questions on your account.
2. You have moved. If you have moved or are planning to move, please notify us of your new address so that we can keep your account information current and up to date.
3. You are traveling internationally. There are countries that are high-risk for credit card fraud, so some transactions are limited. If you let us know where you will be traveling ahead of time, we can make sure your card is ready to go.
4. You are going on vacation. As part of routine security measures, your Visa Credit and/or Debit cards may be flagged for suspicious activity that is out of the ordinary. For this reason, we strongly encourage you to contact us if you plan on using your cards while traveling to avoid any inconvenience.
5. You are getting married or divorced. If you recently got married, you will need to change your name on your account(s). If you are getting divorced, you may want to set up accounts in your own name.
6. You are changing employers. Your work email or phone number may be on your account. Also, if you are receiving direct deposit, contacting the Credit Union with this information will let us know to look out for something new. We can even help set up your new direct deposit.
7. You are changing homeowners or auto insurance, and you have a loan with the Credit Union. Many times, we will receive a cancellation notice because a Member switched insurance companies. If we are not notified of this change, we will assume your insurance coverage was canceled. By making us aware of this change, we will know to be looking for the new insurance coverage.
8. You are worried you are going to have a problem making your Credit Union loan payments .We understand that the economy has had a profound effect on many people’s finances. Many individuals have experienced a reduction in hours at work or a layoff. We encourage all Members who may be experiencing any kind of financial distress to contact us as soon as possible. Everyone’s situation is different and we will attempt to develop a solution to fit your individual needs.
1. You have a new home or cell phone number, or new email address. We need to update this information on your account so we can reach you if we have questions on your account.
2. You have moved. If you have moved or are planning to move, please notify us of your new address so that we can keep your account information current and up to date.
3. You are traveling internationally. There are countries that are high-risk for credit card fraud, so some transactions are limited. If you let us know where you will be traveling ahead of time, we can make sure your card is ready to go.
4. You are going on vacation. As part of routine security measures, your Visa Credit and/or Debit cards may be flagged for suspicious activity that is out of the ordinary. For this reason, we strongly encourage you to contact us if you plan on using your cards while traveling to avoid any inconvenience.
5. You are getting married or divorced. If you recently got married, you will need to change your name on your account(s). If you are getting divorced, you may want to set up accounts in your own name.
6. You are changing employers. Your work email or phone number may be on your account. Also, if you are receiving direct deposit, contacting the Credit Union with this information will let us know to look out for something new. We can even help set up your new direct deposit.
7. You are changing homeowners or auto insurance, and you have a loan with the Credit Union. Many times, we will receive a cancellation notice because a Member switched insurance companies. If we are not notified of this change, we will assume your insurance coverage was canceled. By making us aware of this change, we will know to be looking for the new insurance coverage.
8. You are worried you are going to have a problem making your Credit Union loan payments .We understand that the economy has had a profound effect on many people’s finances. Many individuals have experienced a reduction in hours at work or a layoff. We encourage all Members who may be experiencing any kind of financial distress to contact us as soon as possible. Everyone’s situation is different and we will attempt to develop a solution to fit your individual needs.
Thursday, February 6, 2014
Jean Day Fundraiser!
If you happen to notice Lisbon Credit Union employees wearing jeans more often this year, please know that this is part of our fundraising efforts for 2014. The Credit Union is allowing employees to “dress down” every Saturday, as well as the first Friday of each month.
The purpose of the increased “dress down” days is to exceed our fundraising goal and accommodate the wishes of our employees who, in fact, enjoy participating in “dress down” days. All proceeds accumulated through “dress down” days will benefit local food pantries, such as LACO.
“Dress down” days are optional and employees are not required to participate, although the majority chooses to do so. In 2013, "dress down" days were one of our most successful fundraisers!
The purpose of the increased “dress down” days is to exceed our fundraising goal and accommodate the wishes of our employees who, in fact, enjoy participating in “dress down” days. All proceeds accumulated through “dress down” days will benefit local food pantries, such as LACO.
“Dress down” days are optional and employees are not required to participate, although the majority chooses to do so. In 2013, "dress down" days were one of our most successful fundraisers!
Wednesday, October 30, 2013
What Makes Up a Fico Score?
Your credit score is a number that represents your credit history and
current credit risk. Credit scores are based on information in your
credit report. They are called FICO scores because Fair Isaac Corp.
developed the software that credit bureaus use to calculate them. Most
lenders use your credit score to decide whether they will offer you
credit, how much they will lend you and the terms and conditions of that
credit. Scores range from 300 to 850, with a score above 750
considered excellent credit. Credit bureaus consider the following
categories of information in calculating your credit score:
1) Payment History – Your payment history makes up 35% of your FICO score. Payment history includes how many and which accounts you paid on time or late. If you have an account that is or has been delinquent, credit bureaus consider the amount and length of the delinquency and how long ago you were delinquent. Late payments, foreclosures, debt collections and adverse public records (bankruptcy, judgments lawsuits, liens and wage attachments) damage your score and stay on your credit report for at least 7 years.
2) Total Debt – 30% of your score is based on how many accounts you have and how much you owe by type of account. An account could be a line of credit, such as a credit card, or an installment loan, such as a car loan, a mortgage or student loan. FICO scores also take into account how you use your credit: how much of each credit limit you have borrowed (this is called capacity) and how much you still owe on any installment loan.
3) Length of Credit History - FICO scores factor in the ages of your accounts and how long since you have used each account. This category makes up 15% of your score. A longer credit history improves your score and reduces your credit risk.
4) New Credit – 10% of your score is based on new credit on your credit report (accumulation of debt in the last 12-18 months), including the number and proportion of accounts you recently opened and when you opened them. The number of credit in inquiries on your report, and how recently they occurred, also affects your credit score. Credit inquiries can happen when a legitimate business checks your credit.. Multiple recent inquiries, if you initiated them by applying for credit, can harm your score.
5) Credit Mix – the final 10% of your FICO score is calculated according to credit mix. Having different types of credit (credit cards, retail accounts, installment loans and mortgages will help your credit.
What Doesn’t Affect Your Credit?
- Debt Ratio
- Income
- Length of residence
- Length of employment
What actions will hurt the score?
- Missing payments (regardless of dollar amount.. it will take 24 months to restore credit with one late pay)
- Credit cards at capacity (ex. maxing out credit cards)
- Closing credit cards out (this lowers available capacity)
- Shopping excessively for credit
- Opening numerous accounts in a short period of time
- Having more revolving loans in relation to installment loans
- Borrowing from finance companies
How can you improve your score?
- Pay down on credit cards
- Do not close out credit cards because capacity will decrease
- Continue to make payments on time (older late payments will become less significant with time)
- Slow down on opening new accounts
- Acquire a solid credit history with years of experience
- Move revolving debt to installment debt
Source: www.myFICO.com
1) Payment History – Your payment history makes up 35% of your FICO score. Payment history includes how many and which accounts you paid on time or late. If you have an account that is or has been delinquent, credit bureaus consider the amount and length of the delinquency and how long ago you were delinquent. Late payments, foreclosures, debt collections and adverse public records (bankruptcy, judgments lawsuits, liens and wage attachments) damage your score and stay on your credit report for at least 7 years.
2) Total Debt – 30% of your score is based on how many accounts you have and how much you owe by type of account. An account could be a line of credit, such as a credit card, or an installment loan, such as a car loan, a mortgage or student loan. FICO scores also take into account how you use your credit: how much of each credit limit you have borrowed (this is called capacity) and how much you still owe on any installment loan.
3) Length of Credit History - FICO scores factor in the ages of your accounts and how long since you have used each account. This category makes up 15% of your score. A longer credit history improves your score and reduces your credit risk.
4) New Credit – 10% of your score is based on new credit on your credit report (accumulation of debt in the last 12-18 months), including the number and proportion of accounts you recently opened and when you opened them. The number of credit in inquiries on your report, and how recently they occurred, also affects your credit score. Credit inquiries can happen when a legitimate business checks your credit.. Multiple recent inquiries, if you initiated them by applying for credit, can harm your score.
5) Credit Mix – the final 10% of your FICO score is calculated according to credit mix. Having different types of credit (credit cards, retail accounts, installment loans and mortgages will help your credit.
What Doesn’t Affect Your Credit?
- Debt Ratio
- Income
- Length of residence
- Length of employment
What actions will hurt the score?
- Missing payments (regardless of dollar amount.. it will take 24 months to restore credit with one late pay)
- Credit cards at capacity (ex. maxing out credit cards)
- Closing credit cards out (this lowers available capacity)
- Shopping excessively for credit
- Opening numerous accounts in a short period of time
- Having more revolving loans in relation to installment loans
- Borrowing from finance companies
How can you improve your score?
- Pay down on credit cards
- Do not close out credit cards because capacity will decrease
- Continue to make payments on time (older late payments will become less significant with time)
- Slow down on opening new accounts
- Acquire a solid credit history with years of experience
- Move revolving debt to installment debt
Source: www.myFICO.com
Thursday, October 3, 2013
SpotPay!
Introducing SpotPay! Secure Payments. On the Spot!
Do you run a small business and find yourself turning away customers because you don’t accept debit/credit cards? Does your job require you to constantly travel and can’t be tied down with a traditional payment card processing machine? The Lisbon CU has a solution for you! We have partnered with SpotPay, an innovative way to accept payments on-the-go. All you need is an iOS or Android smart phone or tablet. SpotPay uses a small card reader that connects to your device allowing you to swipe a card to accept payment. The device is secure and does not store sensitive data on your device.Customers can sign the touch pad and get a receipt emailed to them for their records. The funds are then deposited into your Lisbon CU checking account. It’s easy, it’s safe, and it’s a fast way to get paid. It’s a great solution for landscapers, contractors, farmers market vendors, craft show vendors, etc. There is a monthly fee of $8.95 and a transaction fee of 1.99% per transaction (some transactions may be more, see disclosure for full details). The service also comes with 24/7 phone & email support.
Click here to learn more, and to sign up for this convenient service!
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