Month: January 2020

Should I Refinance to a 15-year Mortgage?

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With mortgage rates falling and financial experts predicting an unstable future for the couple looking at computer.screeneconomy, lots of homeowners are rushing to refinance their mortgages to lock in low rates. One increasingly popular option is to refinance a conventional 30-year mortgage into a 15-year loan.

Borrowers may be wondering if this is a financially sound move to make for their own home loan.

We’ve researched this option and worked out the numbers so you can make a responsible, informed choice about your own mortgage.

When refinancing can be a good idea

The primary attraction to a shorter mortgage term is paying off your home loan sooner, typically at a lower interest rate. This can help you increase your home equity faster and can mean paying thousands of dollars less in interest over the life of the loan. Therefore, refinancing to a shorter-term loan makes the most sense when interest rates are falling.
It’s also a particularly good idea for homeowners who can easily afford to increase their existing monthly mortgage payments. In addition, homeowners whose home values have increased since they financed their original mortgage will be more likely to qualify for a 15-year loan, since they will have a lower loan-to-value ratio —how their home’s current value compares with their current loan balance.

How much money can I save?

There is no quick answer to this question, as there are several variables at play in each refinance. To provide a basic idea of what a shorter-term home loan can mean for your finances, let’s take a look at how the numbers would work out in a 15-year refinance on a conventional home loan.

As mentioned, a 15-year loan generally carries a lower interest rate than a 30-year loan. If national interest rates are falling when you refinance, and/or your credit has improved since you bought your home, your interest rate can be even lower. According to Bankrate’s most recent survey of the nation’s largest mortgage lenders, on Dec. 6, 2019, the benchmark 30-year fixed mortgage rate was 3.74 percent and the average 15-year fixed mortgage rate was 3.16 percent.

Let’s assume you refinance your fixed $300,000 mortgage with an interest rate of 4.5 percent to a 15-year loan at an interest rate of 3.5 percent.

If you kept your existing mortgage unchanged for 30 years, you’d be making 360 payments over the life of the loan at $1,520.06 a month, not including taxes, insurance and other fees.

Toward the beginning of the loan, an overwhelming majority of your monthly payment will go toward interest, with less than $400 going toward your principal. By the time you pay off your loan, this ratio will reverse itself and the majority of your payments will go toward the principal of the loan. Most importantly, over the life of your loan, you will have paid $247,220.13 in interest.

Now let’s explore what these payments would look like if you refinanced this loan to a 15-year fixed-rate loan at a 3.5 percent interest rate.

Over 15 years, you would make 180 payments of $2,144.65. Over the life of the loan, you’d be paying $86,036.57 in interest payments, bringing significant savings of $161,183.56. You’d also be chipping away at your principal at a far quicker pace, with $1,269.65 of your very first payment going toward the principal of the loan.

If these numbers are exciting you about getting your refinance process started, take a step back and slow down. First, these numbers may or may not translate directly to your own situation. In the above example, savings are calculated over 30 years, but you may be nearing the halfway point of your 30-year mortgage. A refinance can still be a good idea if it can get you a lower rate for the remainder of your loan, but your interest savings will be significantly less than those described above. Second, your interest rate may not be a full point lower after a refinance, as it is in our example. This, too, will afford you less savings.

There are other crucial factors to consider before jumping into a 15-year refinance. Read on for a review of some of the more important variables to think about when making this decision.

What will a refinance cost?

Refinancing your mortgage is not cost-free. Expect to pay a minimum of 2.5 percent of your new loan in closing costs and other fees.

Here are some of the possible fees you can expect during the refinance process:

  • A fee for pulling your credit
  •  fee for processing your paperwork
  • Lawyer fees
  • An inspection fee
  • Discount points, each of which are equal to one percent of your home loan, which will give you a lower mortgage rate
  • An appraisal fee
  • A surveyor fee
  • Title search fee
  • Title insurance

Before you get started on the refinance process, it’s a good idea to tally up these expenses and see how much it would cost you to refinance.

You might be offered the option of refinance at no cost. This means your closing costs will be rolled into your new mortgage payments. This can make financial sense if it means saving money in the long term, but it’s a good idea to work out the numbers before you continue with the process.

Finally, your existing mortgage may have prepayment penalties, which can cut into the amount you’ll save by refinancing. Find out about these fees before you set the refinance process in motion.

When refinancing to a 15-year mortgage is not a good idea

If you’re convinced that a 15-year refinance is right for you, make sure to consider this crucial factor before going ahead with the refinance: Your monthly mortgage payments will increase significantly after a 15-year refinance. In the example above, the mortgage payments increased by $624.59 a month. Your own payments may see a similar change, and any increase will impact your finances.

If you’re financially responsible, you won’t consider this move unless you are confident you can afford to meet this increased mortgage payment. However, you may not realize that tying up your spare cash in your home’s equity can be a risky move. It can make more financial sense to first build an emergency fund with 3-6 months’ worth of living expenses, and to increase your retirement contributions. If you’re carrying any high-interest debt, you’ll want to pay that down, too, before moving ahead with a refinance.
Increasing your monthly mortgage payments can mean leaving you with a tighter monthly budget and very little breathing room. Make sure you are fully prepared to swallow these costs before you go ahead with a refinance.

Are you ready to make the move to a shorter-term loan? Speak to a representative at Destinations Credit Union‘s First Mortgage Center today to learn about our fantastic home loan options.

Your Turn: Have you refinanced to a 15-year mortgage? Tell us about it in the comments.

Sources:
Bankrate.com
Money.com
Mybanktracker.com
Themortgagereports.com

How to Make Your Career Choice Fit Your Budget

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As you prepare for graduation and begin scouting different employment opportunities, woman studying bills for budgetingbe sure to look at the larger picture before you accept a position.

Hopefully, you’ve chosen a career path that will bring you joy and gratification. Equally important, though, is a job that can support your lifestyle choices. While the positions you consider for your first post-college job will likely offer the opportunity for growth, you’ll still need to pay your bills—and make your student loan payments—as soon as you graduate. A job that brings you satisfaction and a pleasant working environment will not last long if the salary it offers causes you to sink into debt.

How do you determine what kind of salary will be large enough to support your desired lifestyle?

To get this information, you’ll need to create a mock monthly budget for your post-college self.

Using a spreadsheet or paper and pen, create two columns, one for expenses and one for actual dollar amounts. In the expense column, list your typical monthly expenses, including housing costs, transportation costs, health insurance, groceries, entertainment costs, clothing costs, dining out, savings, etc. In the dollar column, list the amount of money you expect to pay every month for each expense.

Your budget should look something like this:

Expense – Monthly Cost

Housing $1200
Transportation $300
Health insurance $250
Groceries $350
Student loan payments $350

It will take some research and some hard, honest thinking to come up with these numbers. For housing costs, take a moment to think about where you see yourself settling down after college. You don’t have to know the exact neighborhood you’ll live in, but it’s good to know the city that will work best for you in terms of lifestyle, career path, and family plans. You can narrow this down to a few choices so long as you keep it reasonable. Once you’ve chosen your desired location, research the median rental prices in the area on real estate sites like Zillow and Redfin.

Next, work on transportation costs. If you already own a car, you’ll have an idea of what it costs you each month. Otherwise, spend some time thinking about what kind of car you want to drive. You can find listings on Carfax.com. Include costs like auto insurance, gas, and upkeep, in this category.

Or, if you plan on living somewhere with reliable public transportation, you might choose this route instead. Make a calculation of how much you’ll spend on bus and/or train rides, along with the occasional cab or ride-share ride.

Complete your budget using your best estimates for each category. Once you’ve filled out each expense amount, add up your total and multiply it by 12 to give you the amount of money you’ll need each year for supporting the lifestyle of your choice. (This number will increase with inflation, but since current salaries will likely increase along with the inflation rate, this exercise can still give you an idea of the annual salary you’ll need.)
Now that you have these numbers, you’re ready to go ahead with your job search. When considering possible positions, you don’t have to choose the one that pays the highest salary if there are other things about the job you don’t love. However, it’s best to pursue positions that can actually support you.

Your Turn: Are you choosing your first job for the salary or for other factors? Share your take with us in the comments.

Sources:
http://knsfinancial.com/career-path-choosing/
https://money.usnews.com/money/blogs/outside-voices-careers/2010/12/06/how-to-choose-a-career-thats-best-for-you
https://money.usnews.com/careers
https://www.brazen.com/blog/archive/career-growth/5-questions-that-will-help-you-choose-the-right-career/

All You Need to Know About Data Breaches

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If you follow the news, you’ll note that there seems to be another major data breach person typing on keyboard with graphic locks over the imagemonopolizing headlines every week. The details vary, but in each breach, thousands, millions or even billions of victims’ sensitive information is compromised, and they’re now vulnerable to identity theft unless they take immediate action.

Here at Destinations CU, your financial success and safety is our primary goal. To help keep your information and your finances secure, we’ve compiled a comprehensive guide on data breaches.

What is a data breach?

Data breaches occur when sensitive information is accessed or used without authorization. Factors like a wealth of online data and sophisticated hacking tools have spurred a steep increase in data breaches in recent years, causing tremendous damage to individual consumers and businesses across every industry.

Data breaches occur by exploiting vulnerabilities in a company’s security system. Alternatively, an employee can be tricked into giving a cybercriminal access to the company’s network.

The goal of most data breaches is to obtain personal information, like names, email addresses and passwords, as well as financial information, like credit card numbers and account details. This information is used by criminals to steal identities and empty accounts, or sold to other criminals who will then do so.

While major data breaches make headlines, according to the Identity Theft Resource Center, there is an average of three data breaches each day, most of which will never even make the news.

After a data breach

Whenever you hear about a major data breach that can possibly affect you, it’s best to monitor your accounts for suspicious activity. In most cases, you will be notified by the victimized company if your data has been compromised; however, it helps to keep an eye on your accounts even if you haven’t been contacted so you can minimize your loss by acting quickly if your are among the unfortunate victims.

If you’ve been victimized by a breach

If you’ve been informed your information is compromised by a data breach, take the following steps immediately:

1. Freeze your credit
Placing a freeze on your credit is the most crucial step you can take to stop scammers from getting at your information. A credit freeze will not bring down your credit score, but it will serve as a red flag for lenders and credit companies by alerting them to the fact that you may have been a victim of fraud. This added layer of protection will make it difficult, or impossible, for hackers to open a new credit line or loan in your name.
You can freeze your credit at no cost at all three of the major credit bureaus, Equifax, Transunion and Experian. You’ll need to provide some basic information and you’ll receive a PIN for the freeze. Use this number to lift the freeze when you believe it is safe to do so.

2. Change your passwords
Most people are on the alert following a major data breach, but they tend to let their guard down once the heat is off and things calm down. Hackers know this, and they’ll often hold onto victims’ information immediately following a data breach and then sell it months down the line to other identity thieves. To protect your accounts from a delayed-reaction hack, change all of your passwords after a breach that possibly has affected you.

3. File an identity theft report
Unfortunately, these protective measures can sometimes be too little, too late. If your accounts have been compromised, and you believe your identity has been stolen, file an identity theft report with the Federal Trade Commission (FTC) as soon as possible. This will assist the feds in tracking down your hacker(s) and returning your finances to their usual state as quickly as possible.

Protecting your information

There’s no fool-proof way to protect yourself from a data breach, but following these simple steps can help keep your information as safe as possible:

Monitor your credit. Check your credit accounts for suspicious activity on a regular basis. You can request a free credit report from each of the three major credit bureaus once a year at AnnualCreditReport.com. You may also want to consider signing up for credit monitoring, a service that will cost you $10-30 a month for the promise of notifying you immediately about any suspicious activity on your accounts.

Use strong, unique passwords. Use a different password for each account, and choose codes that are at least eight characters long. Also, use a variety of numbers, letters and symbols. Vary your capitalization use as well, and don’t utilize any portion of your name, phone number or a common phrase as your password. Using a password manager like Dashlane or iPassword can also help keep your information safe. It’s also a good idea to choose two-factor authentication when possible, and non-password authentication, such as face recognition or fingerprint sign-in, for stronger protection.

Browse safely. Never share sensitive information online and always keep your security and spam settings at their strongest levels. Make sure your devices are fully updated at all times. It’s also a good idea to keep your social media accounts as private as possible.

Destinations Credit Union has tools to help you prevent unauthorized use of your account.  In our mobile app, you can sign up for card controls and get notified each time your debit or credit card is used.  In addition, you can get group pricing, as a Destinations Credit Union member, on ID Shield, which helps restore your identity in the event of a theft.

Hackers never stop trying to get at your data, but with the right protective measures in place, you can keep them from seeing success.

Your Turn: How do you protect yourself from data breaches? Share your tips with us in the comments.

Sources:
https://www.forbes.com/sites/nicolemartin1/2019/02/25/what-is-a-data-breach/amp/
https://www.malwarebytes.com/data-breach/
https://www.experian.com/blogs/ask-experian/what-is-a-data-breach/

 

How Men And Women Manage Money Differently

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Over the last century or so, society has made tremendous strides toward gender equality happy couple looking at computeron every level — and this includes basic money management. Today’s culture has further narrowed the gap between the sexes, and the caricatures of the “overspending wife” and “overworked husband” have nearly become extinct.

Despite society’s advancements, there are still significant differences in the way each gender relates to and manages money. Dozens of studies have been performed on this subject, with research culled from around the globe. Being aware of these innate differences can help us understand the ways we deal with our finances so we can stop fighting our financial strengths and work on building them instead.

Attitudes toward shopping

Men and women look at shopping very differently. A study by the Wharton School of Business titled “Men Buy, Women Shop” found that women are more likely to view shopping as a recreational activity, while most men just want to get out of that store with their purchase as quickly as possible. Because of this, women will be quicker to notice and care about a store’s environment and the way they were treated by the salespeople.

Spending habits

A Consumer Expenditure Survey by the Bureau of Labor Statistics studied the spending choices of single women and single men. Here’s what they found:

  • Overall spending: Single men outspent single women, but only by a slight margin. Men spent an average of $35,018 a year as opposed to $33,786 by women. It’s important to note, though, that the men earned roughly $10,000 more per year than the women.
  • Food: Single men outdid women here, too. Their annual food bill was $4,173, as opposed to $3,680 for the ladies. They also spent more than double what women spent on alcoholic beverages, at $537 a year compared to the women’s $234.
  • Clothing: Women came in first place in this category. They spent an average of $1,140 on a category titled “apparel and services” while men spent $813. Typically, women’s clothing costs more than men’s even for similar items.
  • Cars: Men outstripped women in this category, spending a total of $5,507 a year on personal transportation costs, compared to women’s $4,273.
  • Entertainment: Men and women spent similar annual amounts on entertainment, but they chose to spend those dollars differently. Men spent an average of $835 on “audio and visual equipment and services” but only $206 caring for pets. Women spent $725 on their home entertainment and $488 on their pets.

It’s not just the spending numbers that set men and women apart, though. There are multiple studies proving that women are more price-conscious shoppers than men. According to PaymentSense, 71% of women say the last item they bought online was on sale, compared to only 57% of men. Coupons are also used more commonly by women than men, with CouponFollow’s 2017 Millennial Shopping Report showing that 74% of millennial women will look for coupons when shopping online, compared to 65% of millennial men.

Financial goals

Which gender has bigger dreams?

That question is difficult to answer, because men and women tend to have different priorities for their savings. A recent survey by The Motley Fool found that men are most likely to name saving for a vacation as their top financial goal, followed closely by paying off credit card debt. Women had identical goals, but they put their credit card debt first and their dream vacation second.

Savings

Although men and women have similar financial goals, there’s a vast difference between how much money each gender sets aside for those goals. A recent report by Mylo Financial Technologies found that men had set aside nearly twice as much money for their long-term financial goals as women. A BlackRock survey published by CNBC had similar findings: American women nearing retirement age had an average of $81,300 in retirement funds, while their male counterparts had $118,400.

However, if you look at the percentage they save from their paychecks, women come in first place. A recent Vanguard study found that women are more likely to participate in workplace retirement plans, and that they put up to 8 percent more of their pretax earnings into these plans than men in the same earnings bracket.

The discrepancy between the dollar amounts saved and the percentages of incomes earmarked for savings is due to the reality that the average woman is still earning less than the average man. As a result, a female employee saving 10 percent of her salary might have less money stashed away than a male employee who is saving only 8 percent of his paycheck. Add compound interest into the mix, and you have the current gap between the accumulated savings of men and women.

Investing

There have been copious studies performed on the different investment habits of men and women. Most of them conclude that, of the two genders, men tend to be more confident in their financial knowledge and more open to risky investments, while women are the more cautious investors with an eye toward the future. Not surprisingly, studies have found that the average woman’s investment strategy and eventual performance tends to be more stable than the average man’s.

Men also seem to take more of an interest in investing. The Black Rock Survey found that 70 percent of millennial men enjoy managing their investments compared to just 36 percent of millennial women.

There is no right or wrong approach to finances. However, with an open mind and the willingness to learn about our natural strengths and weaknesses, we can all improve our money management skills for building a life of financial wellness and success.

Your Turn: Do the money habits of most of the men and women you know match up with the findings of these studies? Tell us about it in the comments.

Sources:
https://www.investopedia.com/articles/basics/11/myths-and-realities-gender-finance.asp
https://www.investopedia.com/articles/basics/11/myths-and-realities-gender-finance.asp
https://www.moneycrashers.com/men-women-money-sexes-differ-finances/

What Does The Retail Apocalypse Mean For America?

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It’s become a familiar and depressing sight: the shuttered doors, the “Going Out of going out of business signBusiness” signs and the empty storefronts. And it’s not just happening to the mom-and-pop shops of our neighborhoods. In fact, dozens of major, national brands we’ve grown up with are disappearing from the country’s retail landscape.

What’s happening to the retail world in America? Is there any way to stop the mass wave of corporate bankruptcy, or will we soon be stuck buying every item we want or need, from groceries to mattresses, on the internet? And most importantly, what does it all mean for the future of the economy?

The retail apocalypse: What’s really happening

The steady vanishing of major retailers across the country has been dubbed the “retail apocalypse” by mainstream media, with the finger of blame pointed squarely at the explosion of online shopping. But a deeper look reveals another story.

Yes, dozens of retailers have filed for bankruptcy since 2010 and more than 12,000 physical stores have closed their doors. But there’s a crucial detail the media has missed. A recent report by the IHL Group finds that, for every retailer that is closing some or all of its stores, 5.20 are opening new locations. In other words, there are more companies opening stores than closing them in every sector of retail, from department stores to mom-and-pop shops. Data from the Census Bureau further supports these findings: In 2018, the overall number of retail stores in the U.S. increased by 3,100.

The report stresses that the retailers declaring bankruptcy only account for a surprisingly small number of brands. To illustrate, at the halfway point of 2019, 16 retailers had filed for bankruptcy, but those 16 were responsible for 73% of the year’s retail store closings across the country.

Among the new stores establishing themselves in place of those who have gone out of business, the trend seems to be moving toward smaller stores that already have a strong online presence. This reflects the evolving needs of today’s consumers: Customers are more likely to visit a brick-and-mortar store for getting a feel for the company’s product, or to try out an expensive item, and then go home and make their actual purchase online.

While the media might have you believing that shopping malls are an endangered species, in truth there are thousands more brick-and-mortar stores in the country today than there were a decade ago.

What kinds of stores are still thriving?

Despite the wave of bankruptcy among chain retailers, there are some segments of retail that are thriving.

One such sector is the bargain department store, including Marshalls, T.J. Maxx and Home Goods, where shoppers enjoy the thrill of finding a steal of a deal they can walk home with that same day. Budget-priced fast-fashion brands, like Old Navy, H&M and Zara’s, are doing surprisingly well, too. Another thriving sector is the warehouse club, like Costco and BJ’s, for similar reasons.

The world of retail may be undergoing a massive shift toward digitization, but finding a bargain never goes out of style.

What do all these closings mean for the economy?

While it may be true that there are more stores opening than closing, this reality does not necessarily reflect well on the country’s level of employment. Retail is one of the largest sources of U.S. employment, accounting for close to 16 million jobs nationwide. As mentioned, most of the stores replacing those going bankrupt are smaller stores, many of which hire fewer than five employees. Consequently, when a major retailer, like Forever 21, announces that it plans to close 178 of its stores by the end of the year, this means thousands of workers will soon be jobless. In fact, the retail sector has lost a whopping 200,000 jobs since January 2017.

The good news, though, is that most of those laid-off workers seem to be finding new jobs before their joblessness can adversely affect the economy. The national unemployment level continues to linger at a half-century low, and consumer spending remains strong. Unfortunately, though, many economists anticipate a recession within the coming year. If their predictions are accurate, consumer spending will likely plunge and accelerate retail bankruptcies and layoffs. In a recession, credit availability tightens and interest rates increase, which can negatively impact the retail sector as well.

“Brick-and-mortar retailers are already in recession,” says Mark Zandi, chief economist for Moody’s Analytics. “They’ve been laying off workers coming up on three years. And this is a time when consumers are out spending aggressively. If the broader economy is in recession, there is going to be blood in the streets.”

While there’s not much you can do to change the tide of the national economy, you can help support your own community by shopping at local retailers and choosing to frequent brick-and-mortar shops, instead of making the internet your first stop for all your shopping needs.

Let’s do what we can to keep our local economy strong.

Your Turn: Do you think the economists are right, and we’re headed toward a recession? Share your thoughts with us in the comments.

How To Dispute An Error On Your Credit Report

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Quick-what’s your credit score?woman on phone looking upset

As a financially responsible individual, you should be checking your credit on a regular basis. You can do this by signing up for free credit monitoring on a reputable website like CreditKarma.com, requesting your annual complimentary credit report from AnnualCreditReport.com and reviewing your monthly credit card statements.

If all goes well, your report will hold no surprises and your score will be in excellent shape, or steadily increasing. Sometimes, though, you may find an error in your report. It might be a sharp decline in your score when you know you haven’t changed your spending or bill-paying habits, a large transaction you’re sure you’ve never made or an unfamiliar line of credit. While it can be disconcerting to find a mistake in your credit report, the good news is you can contest errors like these and fix your score.
Mistakes you may find on your credit report

Credit report errors are quite common. In fact, 26% of participants in a study by the Federal Trade Commission found at least one error on their credit reports that brought down their score. A lower score can mean getting hit with higher interest rates on loans, and can prove to be an obstacle when applying for a new line of credit or a large loan.

Most of these errors can be traced back to clerical mistakes, though some are caused by a lack of action on your part, or by criminal activity.

Credit report errors include the following:

  • You’re mistakenly identified as someone with a name similar to yours.
  • A credit account was never included in your report, weakening your perceived credit worthiness.
  • Your loan or credit card payments were applied to the wrong account.
  • A legitimate credit account or debt has been reported and recorded multiple times.
  • Your name is still linked to your ex-partner’s accounts and debts.
  • dentity thieves have used your name and credit file to open accounts and take out loans you knew nothing about – and it’s unlikely they have been making payments on those loans.

To avoid credit report errors, make sure to use your legal name on every line of credit you open, to remove your name from any accounts you are no longer associated with and to have all of your creditors report your open accounts to the major credit bureaus. As mentioned above, it is also crucial that you monitor your score to find mistakes as quickly as possible.

3 steps to disputing an error

If you’ve spotted an error on your credit report, don’t panic. Follow these three steps to dispute the error and fix your credit:

Step 1: File a dispute with each of the major credit bureaus.

You’ll need to inform all three major credit bureaus, Equifax, TransUnion and Experian, about the error. All three bureaus allow you to file disputes online.

In your written dispute, you’ll need to clearly identify each disputed item in your report, explain why you are disputing these items and ask that the errors be deleted or corrected. Include your full contact information, as well as copies of any documents that support your claim. You can also include a copy of your credit report, highlighting the items you are disputing.

To file your dispute online, follow these links for each of the three major credit bureaus: Equifax, TransUnion, Experian.

You can also file your disputes by mail to Equifax and TransUnion; Experian currently accepts online disputes only. If filing by mail, it’s best to send your letter via certified mail with a requested return receipt. It’s also a good idea to keep a copy of your correspondence for your own records.

Mail your Equifax dispute to the following address:
Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30348

Mail your TransUnion dispute to the following address:
TransUnion LLC
Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016

Step 2: Contact the creditor

After you’ve contacted each bureau, you can also reach out to the creditor that’s linked to the error in your report. This step isn’t necessary, but it may speed up the correction process.

Most creditors will provide a link or an address for disputes. When filing your dispute, follow the guidelines above and include all relevant information and documentation. Be sure to let the creditor know you’ve also contacted the credit bureaus, as they’ll want to include this information and a copy of your dispute if they report their findings to the bureaus. You can also ask to be copied on all correspondences between the creditor and the bureaus.

Step 3: Follow up in 30 days

Expect to be contacted by the bureaus and the creditor within 30 days after filing your disputes. If all goes well, your dispute will be accepted and your credit will be restored. In many states, you are eligible to receive a complimentary credit report following a registered dispute.

If one of the credit bureaus or a creditor refuses to accept your dispute or does not resolve the error in your favor, you can ask the bureau or creditor to include a copy of your dispute in your file and in all future credit reports. This way, a lender or creditor will be made aware of the alleged error when reviewing your credit. You may be charged a small fee for this service, but it is generally worth the price. If you feel the error is too significant to ignore, consider hiring a lawyer to help you contest the report and fix your credit.

Disputing an error on your credit report is fairly simple. Always monitor your score and be vigilant about correcting errors. The payoff can affect your financial wellness for years to come.  If you need assistance, please contact our HOPE Inside Financial Wellbeing Coach at Destinations Credit Union.

Your Turn: Have you ever filed a dispute for an error found on your credit report? Tell us about it in the comments.

6 Ways To Spot A Payday Loan Scam 

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Payday loan scams may seem like old news, but they’re more common than ever. In fact,payday loans sign in 2018, the FTC paid a total of $505 million to more than one million victims of payday loan scams.

In this scam, a caller claiming to represent a collection agency who is acting on behalf of a loan company tells victims they must pay their outstanding balance on a payday loan. They’ll ask victims to confirm identifying details, such as their date of birth or even their Social Security number. They claim they need it as proof that they’ve seen the victim’s loan application and actually do represent the company. Unfortunately, the caller is actually a scammer trying to rip off victims or steal their identity.

In many payday loan scams, victims may have applied for a payday loan but not yet completed the application, or they may have submitted the application but not yet received the funds. In these scenarios, the victim has unknowingly applied for a loan with an illegitimate company which proceeds to sell the victim’s information to a third party. This way, the caller can appear to be an authentic loan collector because they know lots of information about the victim.

If you’ve applied for a payday loan, be on the lookout for these six red flags, any of which should alert you to the fact that you’re being scammed:

You’ve never received a payday loan

While these scams usually target people who have filled out an application for a payday loan, fraudsters often go after victims who haven’t completed one or who have done so but have not yet been granted the loan. Obviously, you can’t be late paying back a loan you never received.

If you haven’t completed your application or you haven’t yet received an answer from the loan company you applied to, you’re talking to a scammer.

The caller demands you pay under threat of arrest

Scammers often dishonestly align themselves with law enforcement agencies to coerce victims into cooperating. A legitimate loan company will never threaten you with immediate arrest.

The caller refuses to divulge the name of his collection agency.

If the caller actually represents a collection agency, they should have no problem identifying this agency by name. If they refuse to do so, you may be looking at a scam.

You can’t find any information about the agency the caller allegedly represents.

The caller is sometimes willing to name the agency, but the company is completely bogus. If you’re suspicious about the call, do a quick Google search to see what the internet has to say about this company. If you can’t find any proof of the company’s existence, such as a web page, phone number or physical address; or the search turns up evidence of previous scams, hang up.

You have not received a validation notice in the mail.

By law, anyone representing a collection agency and attempting to collect on an outstanding debt must send a validation letter to the debtor. This letter will inform the borrower that they can dispute the debt within 30 days. It will also detail the amount of money owed and the party to whom it must be paid.

If you have not received any such letter in the mail before the alleged debt collector calls, you’re probably looking at a scam.

The caller only accepts immediate payment over the phone.

If the caller was reaching out to you on behalf of a legitimate collections agency, they’d be happy to work out a payment plan with you, and provide you with an address to which you can mail your payments. When a “collector” insists that you pay in full over the phone and refuses to furnish an address to which you can mail your payments, you’re likely talking to a scammer who is only interested in getting your financial information and your money.

If you find yourself struggling to survive financially between paychecks, call, click or stop by Destinations Credit Union today. We’ll be happy to help you learn how to keep your finances it optimum health.

Your Turn: Have you ever been targeted by a payday loan scam or a similar con? Share your experience with us in the comments.

SOURCES:
https://www.consumer.ftc.gov/blog/2018/09/505-million-refunds-sent-payday-loan-customers
https://lendedu.com/blog/watch-out-for-payday-loan-collection-scams/
https://www.scam-detector.com/article/payday-loans
https://www.avvo.com/legal-guides/ugc/how-to-spot-a-payday-loan-collection-scam