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2019 Wintersession
STUDENT ADVISORY COUNCIL
Open to Harvard College students.
HUECU.ORG/SAC
Consult on:
• Personal Finance Events
• University Engagement
• Student Banking Services
Shape What’s Next!
Membership lasts a lifetime and is a family affair!
• Products and services designed for you
• Always have access to your accounts
• Become a member-owner at a not-for-profit financial cooperative
COOPERATIVE BANKING
CREDIT UNION vs. BANKS STRUCTURE
Not-for-profit, member-owned For-profit, owned by stockholders
CLIENTELE
Members share a common bond (such as where they go to school or work)
No restrictions on clientele; typically serve middle-to-high income clients
GOVERNANCE
Volunteer board of directors elected by members
Paid board of directors, who may not be from the community or use the bank’s services, elected by stockholders
CREDIT Laura Buso Community Outreach Specialist
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CREDIT • Utilizing something now (e.g. education, car or home) and paying for it over a period of time.
• Credit isn’t: • debit • income
Credit is borrowed money.
CREDIT IMPACT: RATES AND PAYMENTS
CREDIT SCORE APR MONTHLY
PAYMENT ADDITIONAL COST
IN A YEAR 720-850 4.23% $741 $0
690-719 5.68% $757 $192
660-689 7.73% $780 $468
620-659 11.29% $822 $972
590-619 16.28% $882 $1,692
500-589 17.71% $900 $1,908
<500 Not eligible ---- ----
If your credit improves, you may be able to refinance your debt. Source: Myfico.com – 36 month car loan - $25,000
ADDITIONAL COST AFTER 3 YEARS
$0
$576
$1,404
$2,916
$5,076
$5,724
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HOW CREDIT WORKS
Collect financial information from:
Provide credit information on
individual consumers
Creditors, lenders, utilities, debt
collection agencies, the courts,
amongst other sources.
Three major U.S. credit bureaus:
CREDIT BUREAUS
Know your money
CREDIT REPORTS o Credit card debt
o Auto debt
o Student Loans
o Mortgages
o Open and Closed accounts
o On-time and Late payments
o Collections
o Requests for credit (inquiries)
Reflects your current and past uses of debt, including:
CREDIT REPORT TIMING Open accounts in good standing Indefinitely
Closed accounts in good standing 10 years
Chapter 7 bankruptcy 10 years
Unpaid tax liens* 10 years
Civil judgments* 7 years
Late or missed payments 7 years
Chapter 13 bankruptcy 7 years
Collection accounts 7 years
Paid tax liens 7 years
Credit inquiries 2 years
*As of July 1, 2017 only included if social security number or date of birth matches consumer’s name and address.
ANNUALCREDITREPORT.COM
MANAGING YOUR SCORES
CREDIT SCORES o Measure consumer credit risk
o Different for each bureau and
score model
o Independently managed outside
of credit bureaus
o FICO® Score
o VantageScore
o Common range: 300 to 850
PAYING A BILL 60 DAYS LATE WILL AFFECT MY CREDIT SCORE.
FALSE TRUE
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LATE PAYMENTS Recent late payments could
decrease credit score by 100 points.
I NEED TO CARRY A BALANCE ON MY CREDIT CARDS TO HAVE GOOD CREDIT.
FALSE TRUE
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CREDIT UTILIZATION Maintain reasonable amounts of
unused credit (stay well below your credit limit)
Source: www.fico.org
FICO® SCORE
your.vantagescore.com
VANTAGESCORE
RECOVERY TIME
Source: your.vantagescore.com
REVIEW YOUR CREDIT REPORT
Visit consumer.ftc.gov for sample letters.
Found errors or inaccuracies? 1. Contact credit bureau to inform them of
error: o Bureaus have 30 days to investigate
2. Contact creditor who reported inaccurate information.
HUECU.ORG/CYBERSECURITY
WHAT IMPACTS YOUR MORTGAGE?
1. Credit
2. Down Payment
3. Debt-to-Income Ratio
CREDIT AND HOME BUYING
HUECU will…
o pulls credit report from the 3 major credit bureaus
o pull credit report for all applicants
o accepts FICO® scores of 620 to 830
o recommend 720 FICO®
score or higher
WHAT IF YOU…
Default on a Loan
Have a score under 620
Buying with someone
else
Have limited credit history
CREDIT AND PMI Annual PMI rate (%)
Loan to Property
Value 760+ 720 -759 620 - 719 Under 620
95% .35 .45 .55 Do not qualify 90% .25 .30 .35
85% .10 .15 .25
EXAMPLE ONLY FOR ILLUSTRATIVE PURPOSES.
Example: $100,000 mortgage (after 10% down payment) .30% PMI rate (750 credit score) $300 annual PMI …or… $25/month added to mortgage payment
GOOD CREDIT & SAVINGS
EXAMPLE ONLY FOR ILLUSTRATIVE PURPOSES. Source: Better.org
OPTIONS TO IMPROVE CREDIT SCORE
Each person’s credit situation is different. Review your credit report to help determine which options may be best for you.
• Secured credit cards
• Unsecured credit cards
• Credit builder loans
• Debt consolidation loans
• One-on-one financial coaching
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GREENPATH FINANCIAL WELLNESS
Empowering people to lead financially healthy lives.
• Free for HUECU community
• Budget counseling
• Credit report review
• Immediate counseling
• Confidential
• Flexible Hours Monday –Thursday 8 a.m. - 10 p.m.
Friday 8 a.m. - 7 p.m.
Saturday 9 a.m. - 6 p.m.
HUECU.org/GreenPath 877-337-3399
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• Pay your bills on time
• Know your interest rates and credit scores
• Be cautious of co-signing debt for someone else
• Read the fine print and your statements
• Check your credit report
• Protect your identity
CREDIT TIPS
This presentation is a general overview of principles you may want to
consider. Only you can decide what is best for you. This presentation is
educational in nature and is not intended to be, and should not construed as,
tax, legal or investment advice. You should always consult a certified advisor
for advice on those topics. The examples used in this presentation are for
illustrative purposes only.
