Showing posts with label Credit. Show all posts
Showing posts with label Credit. Show all posts

Best Banks? Forget It, Join Credit Unions for Free, No Fee Checking / Saving Accounts, ATMs, etc.

Latest update: June 18, 2020
Credit unions and certain other financial institutions are much better than national banks and credit card companies. Pay fewer, lesser, and no fees.

Forget: Chase Bank, Ally Bank, Wells Fargo, Bank of America, and all the rest of them. They all may claim they have free checking and savings accounts, but there is invariably fine print in their conditions that will cause you grief.

A special mention about Bank of America. "Fees" are their middle name. Why any consumer would do business with them is beyond me.


People often ask,
  • What is the best bank in a given location?
  • What is the best bank for a specific kind of customer?
Rephrasing the question to "What is the best financial institution?" is the way to find what's best.

It is positively amazing how many people put up with all the fees many banks and other financial institutions attach to their savings, checking, and credit card accounts. Those banks and financial institutions will keep on doing this as long as the consumer keeps letting them get away with it. There is no excuse for the consumer to tolerate these kinds of bank fees when there are so many better alternatives available.

Avoid National Banks and National Credit Card Companies

National and local credit unions and local banks are the way to go.

The average consumer should never do business with a national bank or national credit card company. Check out your locally owned banks; even better, check out your local or national credit unions. National debit card companies might be OK: read the fine print.


Customers who have followed the above principles:

  • Have not paid any monthly account fees in decades.
  • Have not paid any check fees in decades.
  • Have not paid any credit or debit card transaction fees in decades.
  • Have always been paid higher interest on their savings.
  • Have always paid lower interest on their loans.
  • Have always experienced the bliss of fewer and lesser fees all-around.

What Exactly Is a Credit Union?

A credit union in the United States is technically a co-op arrangement among members. Those members with money make deposits. Those members who need money take out loans.

The spread between the interest paid to members with savings and the interest collected from members with loans is supposed to be no larger than what will cover the co-op’s expenses.

The covered expenses also enable both savers and borrowers to have free checking accounts, no-annual-fee debit and credit cards, and many other free or lesser fee services. Many countries have these same co-op type institutions; they are just known by different names.

About Credit Union Membership

With banks, you are a customer. With credit unions, you are a member.

It used to be difficult to become a member of a credit union. The usual requirement being you were working for a specific employer. In fact, many times the credit union was actually named after the employer. Many of these credit unions are still in existence today.

Membership requirements these days are much more open. Every credit union has unique criteria.

 Credit unions did not come up with the idea of membership requirements. Federal regulations require members of credit unions to have something in common, usually being the mutual employer scenario.

However, other criteria can now be used; just being a member of a certain profession is a good example.

What opened the floodgates is the now current use of geographical location as to what determines eligibility. In other words, are you and the credit union in the same county? If so, congratulations; you are a member. The credit union website will clearly spell out the eligibility requirements to become a member.

f you do not qualify, it is neither their fault nor yours; federal regulations are federal regulations. The good news is your chances of success are fairly high. Worst case scenario is you merely proceed to your local bank instead.

Internet-based financial institutions are also worth checking out, but be very careful and check their reputations and fee schedules with a fine-toothed comb.

The Good, the Bad, the Ugly.


About Your Local Banks and Credit Unions: The Good

Here is the normal fee structure at your good, locally owned banks and credit unions:

  • There are no membership fees. 
  • There are no annual or monthly credit card fees.
  • There are no annual or monthly debit card fees.
  • Savings accounts have no monthly or other fees. A minimum balance requirement of a couple hundred bucks or less is acceptable.
  • Checking accounts have no monthly fees and no minimum balance requirements. The requirement you have a savings or similar account with a reasonable minimum balance to qualify for the free checking account is an acceptable option. Using the direct deposit option to qualify for a free checking account is not always a good idea; getting slammed with a bunch of fees when you lose your job is not the way to go. On the other hand, qualifying based on direct deposit of your Social Security retirement check certainly isn't much of a risk.
  • No debit card point-of-sale fees of any kind.
  • No credit card point-of-sale fees of any kind.
  • Very minimal or no ATM fees on debit card transactions.
  • All other fees are less than what you are paying at your current financial institution.
And a special note about credit unions and ATMs. Basically, they've united into a single network as to ATM fees and non-fees. If one belongs to a credit union, you can use any and all other credit union ATMs, and the only fee will be the fee or non-fee that you have agreed to with your credit union. In other words, there's no secondary fee for using an ATM that is not your particular credit union's; any credit union ATM will do just fine. Personally, I have not paid an ATM fee in decades.

About Your Local Banks: The Bad

It should be noted some local banks can be even more obnoxious than your national banks. Local banks are just like any other locally owned business. Employee attitude will directly reflect the personality and attitude of the owner(s) of the bank.

Fortunately, the bank’s fee structure is very often a clear indication of the bank’s attitude towards the general public. Ridiculous and excessive fees? Go elsewhere.

About Your Local Credit Unions: The Ugly

Credit unions are well-known for being the better deal. As such, there are bankers-to-be who come out of the woodwork to take advantage of the better reputation credit unions have.

The methodology to do this is not difficult. The banker-to-be simply opens his business via and under the credit union regulations and rules. Then, as far as interest rates and fee structuring goes, they run it like a bank. There is a credit union in San Francisco that is positively famous for this. There is another credit union in Riverside County, California that I would also avoid like the plague. So just because an institution calls itself a credit union doesn't mean you are home free. Do check out their fee schedule and interest rates relative to other institutions.

The Search

Needless to say, your location will vary.


How to Find Your Local Banks and Credit Unions

Finding them is not hard to do. The usual Yellow Pages perusal and/or an internet search will turn them right up. And it should be noted there are excellent national credit unions as well.

As to finding the good ones, you will need to check their website. Find their fee schedule and you will usually know what you need to know. If they do not have a fee schedule online, then that is a possible red flag. If your choices are limited, then you may have to make a personal visit to the financial institution and check out their brochures in the lobby.

Those financial institutions having the "glass cage" setup you must navigate to enter and exit the premises should be avoided like the plague. For some reason, there seems to be a strong correlation between "glass cage" usage and the treatment of customers as peasants in general.

You can also find a local credit union, plus all sorts of other worthy credit union information, at the federally run Nation Credit Union Administration (NCUA) website.

You can find all sorts of interesting information about your local banks at the Federal Deposit Insurance Corporation (FDIC) website. They even maintain a public list of failed banks.

Next is the opening of an account. A driver’s license, Social Security card, and a pleasant attitude are all that should be required. If the bank or credit union employee, or the procedures in general, are unusually obstructive; then forget it and move on. If they require you have an account with them for at least six months before allowing you to apply for a debit card, then you definitely want nothing to do with them.


Worthy Internet Institutions

There are worthy internet-based institutions out there. Just thoroughly check their fee schedule; particularly as relates to their savings and checking accounts, and their credit and debit cards. Also, plug their name and the word "scam" into your search engine and see what pops up. If there are pages of complaints, it would probably be wise to avoid that particular institution.


Only consider doing business with credit unions authorized to display this logo:

NCUA (has all sorts of worthy information)


Only consider doing business with local banks and internet-based financial institutions authorized to display this logo (or other equivalent government signage)


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Ways to Get and How Does an Auto Loan Work - New and Used Cars

Latest update: July 9, 2020
Best way to get a car loan and low interest rate. There is a lot of information here. Take your time with it. The more one thinks about things, the more ideas that will come to mind. These are also chaotic economic times. The auto industry is desperate to sell cars. The banking industry is desperate to make loans.

How-to, About, and the Process of Getting the Best Car Loan

How to get the best rate for an auto loan, plus a couple important tips and tricks for buying a new or used car.

And as for getting a car loan when you have bad credit or no credit, here is probably the most important tip of all:
  • The larger the down payment you are willing to make, the more inclined the bank or other financial institution will be to give you the loan.


Both new and used car sales continue to fluctuate, and so the demand for car loans does the same. As demand fluctuates, so do the shenanigans and other nonsense by dealership finance departments and other lenders. This page will provide you with what you need to know about getting the best possible rate on your auto loan. Failing that, it will at least keep you from getting the worst.

Auto Loan Guide - Things to Do and Not Do


Clean Up Those Credit Reports

First thing you need to do is get copies of your credit reports. You are entitled to one free report a year from each of the three major reporting agencies. The most legitimate website to get them from is www.annualcreditreport.com. They will make you work for it by subjecting you to a bunch of sales pitches for their non-free products, but this is the site most consumer groups and others recommend.

Review your reports. If you find any errors negatively impacting your credit score, you will have to jump through whatever hoops are necessary to get them fixed. Most loan officers don't even seriously bother to look at the reports; they just look at the credit score. Have the wrong credit score and you may not even be able to get an auto loan. Have an unfairly low credit score, and you will be paying hundreds and possibly even thousands more in interest over the course of your car loan, not to mention being subjected to higher monthly payments.

It is imperative your credit score be as high as possible. One doesn't have to be a rocket surgeon to know the higher your credit score, the lower the interest rate on your auto loan will be. In fact, reading this Credit Score Guide for Beginners would probably be a good idea.

Avoid Auto Dealer Financing


Epic Fail!
Don't do this!
Car dealerships and used car lots are the absolutely worst place to get an auto loan.

Seriously, you might as well go to one of those loan shark outfits you see at the mini-malls. The auto dealers will use every trick in the book against you. They make as much or more money on the financing as they do on the car sale, itself. More often than not, whatever interest rate is initially promised invariably runs into a "problem"; and they will insist they can only do the financing at the higher interest rate and higher monthly payments. It's even been reported they will sometimes pull this stunt when the car is already sitting in your driveway.

As a side note, by all means ask about their zero financing they constantly advertise. Problem is, somehow nobody every seems to qualify for it... If you do happen to be one of the lucky few, well and good. But don't count on it.

And while we're at it... When you have decided to visit a particular dealership or used car lot, it wouldn't hurt to first check them out at RipOffReport and the BBB.

Best Way to Get a Car Loan Is From Your Current Financial Institution


Do you feel lucky?
With any luck, your financial institution has already been poking you with a stick and trying to entice you to get an auto loan with them.

Your first resource should be your existing bank or credit union. Presumably you have been with them for awhile and are considered to be a good customer. What you would really like to accomplish is to get a pre-approved auto loan from them; succeed and your problem is solved.

Do not mention your pre-approved loan to the car dealer prior to closing the deal on your car purchase price. Otherwise they will raise the car price to offset the money they are not going to make from the financing.

If your financial institution seems somewhat reluctant about the pre-approval idea, don't push it. Stay lovable and don't burn that bridge just yet. Ask about and pave the way to apply for an auto loan with them after you have negotiated the price for the car.

Getting a Car Loan from Other Than Your Existing Financial Institution


The Shopping Around Process

Did your existing financial institution fail to come through? Fine; once you've got the car situation taken care of, your next project will be to find a better place to do your banking business.

Give www.bankrate.com your regards. Select "auto" from the menu at the top of the screen. Use their search feature to see what the best auto loan rates and conditions are, etc. Don't actually make an application just yet.

Check out your local banks and credit unions. Visit their websites. See what their rates, fees, and conditions are. Again, don't actually apply.

There are also some worthy, exclusively-internet, entities out there who do car loans and general purpose loans. Just be sure to research them first. You do not want to get tangled up with the wrong one.

Network! By all means ask friends, neighbors, co-workers, etc. for recommendations as to where to get the best car loan. Applying for an auto loan at a place where you can use an existing good customer as a reference certainly won't hurt.

Also be attuned to what people say about auto loan places to avoid.

How to Apply for the Car Loan
This is all a pain in the neck.
But even a 1% loan rate savings can add up to a significant amount of money over time.

The Application Applying Process

Well, you've cleaned up your credit report and have done your research. Time to apply for the loan.

Pick and rank your best five candidates from your research. Work your way down the list. Make it known you are shopping for the best rate; this accomplishes three purposes:
  • You are implying you have no concerns about being accepted for the loan, your only concerns are as to terms. Appearing confident favorably affects perception.
  • You will not appear desperate or sneaky when it is noted you are making multiply inquiries.
  • Induces competition and a sense of urgency as to interest rate offered and quickness of response.
In some cases you will have the option to apply in person or via their website. Put some thought into what would work best for you in that particular situation.

Do make all your applications within a 30-day time frame. Multiple loan application inquires will reduce your credit score. But if you make all your duplicate applications within a 30-day period, it is supposed to be categorized as only one inquiry by the credit reporting agencies.

Summary

The above information should work equally well as to getting the best motorcycle, truck, boat, or even airplane loan rates. However, if the boat or airplane is over a 100K, then you can probably afford to get a financial adviser involved. Preferably one with lending institution connections.

Yes, getting the best auto, truck, or SUV loan rates can be a lot of work and a pain in general. The more effort you put in to it, the more money you can save. One thing you can do is to make the project an iterative process, i.e., don't try to do it all at once. Just do one or two aspects a day. It will be done before you know it.

Just a Couple Car Buying Quick Tips
Thrown in for Good Measure


New Car Buying Tip

There are reports saying buyers can get a better price through the website than through going to the car lot. There may even be a choice of websites, i.e., manufacturer website vs. dealership website.

Every manufacturer does things their own way. As an example, the manufacturer website may simply refer you to the appropriate dealership website. Or not. Things are always changing.

It should also be noted more and more dealerships are directly owned by the manufacturer.

Used Car Buying Tip

When a dealership takes a car in trade-in, generally one of two things will happen to it.
  • If the dealership thinks it is a good car which will outlast their warranty program, they will give it a tune-up, detail it, and put it in their used car section.
  • If they don't think it's such a good car, they'll sell it off at a wholesalers' auction and it ends up in some used car lot.

What is the significance of this to the used car buyer?
  • The better cared for, more reliable cars are to be found in dealership used car sections.
  • The more tired, riskier cars are generally at places exclusively selling used cars.

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About and How to Increase Credit Score Quickly - A Primer

Latest update: April 2, 2020

A Credit Report Score Guide for Beginners

  • Includes List of Things Affecting Your Score
  • Improving Credit Report and Raising Score
A Credit Score Primer Guide for Beginners

Basically, it is not a pretty picture. Unfortunately, credit reports and scores don't just affect interest rates on loans and credit lines; not to mention being outright refused for credit altogether.
  • Insurance companies also use your credit score as one of the factors in determining the premium amounts for your life, home, and auto policies.
  • Landlords use your credit report to decide whether to rent to you or not.
  • Cell phone and cable companies use it to decide whether to accept you as a customer or not.
  •  Other utility companies use it to decide if an advance security deposit is required.
  • Many companies (sometimes illegally) will refuse to hire you, if you have a low credit score.
It's as if the whole system was designed to mimic nature's law of the jungle, i.e.; once you are down, it "conspires" to keep you that way or outright "kill" you altogether.

Table of Contents

  1. How Your Credit Score Is Calculated
  2. Things That Affect Your Credit Score and How to Protect and Raise Your Credit Rating
  3. About Credit Score Numbers and What Each Range Means
  4. Consumer Credit Bill of Rights and Other Federal Information Resources

How Your FICO Credit Score Is Calculated

FICO is the most commonly used credit reporting system used by lenders, insurance companies, landlords, employers, utility companies, etc.

Percentages and Components of the FICO (formerly known as Fair Isaac) Credit Reporting System
  • 35% Payment History
  • 30% Amounts Owed
  • 15% Length of Credit History
  • 10% Types of Credit Used
  • 10% New Credit
These are the components and numbers Fair Isaac have publicly claimed. However, it is reasonable to suspect there are proprietary, additional factors behind the scenes; debt ratios, unused credit, employment history being primary examples.

List of What Affects Your Credit Report and Score and How to Protect and Improve Your Credit Rating

  • Pay your bills on time, this one is an absolute necessity. To do otherwise signifies financial problems or irresponsibility, both of which are major red flags.
  • Keep your debt as low as possible, relative to your credit-lines. Maxed-out credit-lines are death.
  • Unfortunately, the opposite is also true. Having an excessively large, unused credit-line available will lower your score. Excessively large credit-lines tend to eventually be used and potential creditors are leery of that.
  • Don't suddenly close most of your credit lines and/or card accounts. This will mess up your debt-to-limit ratio and lower your score significantly.
  • Moderately used, active credit lines and accounts seem to be what lenders like to see.
  • Apply for credit as seldom as possible and avoid department store credit cards.
  • Co-signing loans is a very bad idea,"Top 10 reasons not to co-sign on a loan" from Bankrate.
  • Student loan debt can hurt your credit score.
  • The IRS reports delinquent taxes, unknown if that includes those under dispute.
  • Cities and counties report unpaid parking tickets and unpaid library fines. And it is a pretty good bet that includes any that are disputed.
  • Cities and counties also report what you owe when you are unable to retrieve your car from impound.
  • Reconcile your credit card statements every month. Inaccuracies, invalid charges, overlooked-no-longer-needed monthly charges, and outright ID theft happen much more often than you might think.
  • Check your credit report at least once a year. Fatal inaccuracies occur often in these reports. In fact, credit reporting agencies are famous for it. You are legally entitled to one free credit report a year from each of the credit reporting agencies.
  • Pretty much all of the reputable consumer-related-advice websites recommend annualcreditreport.com as the place to get your free credit reports. The site will subject you to a lot of advertising pitches along the way, but eventually you'll get the free reports unscathed.
  • Credit card companies and banks generally rob their customers blind when it comes to cash advance fees; so don't do that. There is also the possibility that your willingness to pay those high fees might be interpreted as a sign of desperation by the lending institution.
  • Likewise, avoid those loan places you see in the mini-malls like the plague. Having one of those places showing up on your credit report would be 10 times more destructive than any mentions of department store credit cards could ever be.
  • An Update. Credit bureaus now report to prospective mortgage lenders as to whether an applicant pays their credit card bill(s) in full each month or only makes the minimum payment(s), etc.

About Credit Score Numbers and What Each Range Means

Depending on which credit bureau is dong the rating, credit scores range approximately from 300 to 850.

The credit score sub-ranges listed below are likewise approximations, but they will give you a good idea as to where you stand. There is a small overlap in the ranges. This has to do with the fact that some loan officers will look beyond just the number and actually read the report; but unfortunately, there are many lending institutions who don't.

Some aspects of this segment are of a "humorous" nature, but there is seriousness behind the "humor".

Credit Scores at 300 Something, or in the 400 Range, or at 500

  • If your credit score is at or below 500, you are basically dead in the water. If you are in this category, then as far as society is concerned, you are not worthy to live. Not only does society classify you as unworthy/poor/destitute; it will do everything in its power to keep you that way.
  • Want a job? Forget it. Employers don't hire people with credit scores at and under 500. As far as society is concerned, you have no right to be employed. [Update: Some states have changed their laws in order to fight this practice. In California, for example, it is now supposedly illegal for a prospective employer to use your credit score as a factor in their hiring decision.]
  • Want to rent an apartment? Forget it. Apartments aren't rented to people with credit scores at and under 500. As far as society is concerned, you deserve and should be homeless.
  • Want to buy a car, get a checking account, or get a debit or credit card? Forget it. Forget it. And forget it.
Do you think there just might be something wrong with this system? Many people will agree with you.

Credit Score Range Between 500 to 600 and up to 620 Inclusive

Attempting any kind of credit related or other business transaction when your credit score is in the 500 to low 600 range can be difficult. If you are able to get a credit related account or successfully initiate any other sort of business transaction, you will be subjected to the worst possible interest rates, fees, and security deposit amounts.

What Is a Good Credit Score?

Credit Scores Ranging Between 600 to 700 and up to 719 or 720 Inclusive

In this range, society doesn't consider you a credit risk; but entities you attempt to do business with will pretend they think you are. Negotiation is possible here. Sometimes, just say no. It might work. It might not. You have the option to walk away and try somewhere else.

Here is the classic story when someone is in the 600 to low 700 credit range and they attempt to buy a car...

You: “I love this car and think you are giving me a good deal. I'll take it.”

The Car Dealer: “With your credit rating, we will have to charge you 50% more than the usual interest rate.”

You: “Why?”

The Car Dealer: “Because we consider you a credit risk.”

You: “So you think I can handle the higher monthly payment, but that I can't handle the lower one?”

The Car Dealer: “Exactly.”

- end of story -

Although told in a "humorous" light and different words would be used in the actual situation, the description of the results is dead on accurate. And on an even more serious note, one should never get an auto loan from a car dealership or used car lot anyway. If/When you are in the market for your next car, this How to Get a Car Loan article will save you much grief and money.

What Is a Great Credit Score?

Credit Scores at and Above 720 - And in The Land of 850

When your credit score is in the 720 to 799 range, better interest rates on loans and credit lines start becoming available to you. Getting a house or car loan at favorable rates is usually a routine matter.

And if your credit score is actually in the 800 range, you are a Living God and can do no wrong. Creditors follow you around, scattering flower petals in front of you wherever you go. Little angels hover around and protect and nurture you. Rainbows are visible at every corner.

A Bookmarks Reference List of Consumers Credit Bill of Rights Resources

Here's a list of resources as to the rights consumers are legally supposed to have when dealing with credit and credit scores. All listed websites are government or other well-known, reputable sources. All links go directly to the website's consumer credit rights page. This list may be added to from time to time.
Credit reporting agencies keep reporting more and more about an individual's activities. Reports are no longer confined to just talking about money.

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