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| Maintaining Your Credit Score
 Many retailers offer nice discounts when you open a new credit card account to pay for your purchase. While discounts such as 0% interest or 10% off your purchase are intriguing, there is a catch involved.
Before you acquire new credit to get a nice discount on that plasma TV, clothes for your kids, or tools for your home improvement project, please consider this:
In past years, an exceptional credit score - 740 or above, for example - put you on a fast track to an approved loan. Assuming that other loan qualifications were met, a good credit score indicated that your credit profile was strong.
However, times appear to be changing. The nation's financial crisis, economic uncertainty, and the recession have led to credit profiles being scrutinized more closely than ever. No longer will your credit score guarantee that you meet credit requirements for a loan.
For example, we've run into recent cases where customers with "exceptional" credit scores have been considered "risky" borrowers, as indicated by automated loan approval systems. The reason: too many accounts opened in the past 12 months. Normally, automated loan approval guidelines would indicate that a borrower with a score of 740 would be low risk. Keep in mind that the world is changing, and these are certainly not normal times.
An approach that all of us can take is to think carefully before we use new credit to make a purchase this year. Is the 10% discount for opening a new account worth the potential ding on your credit profile? How many new accounts have you opened in the past 12 months vs. the number that you've paid in full?
Another important consideration before opening a new credit account is the confidentiality of your personal information. Recently, several mortgage customers have indicated that they were being solicited by financial service companies whom they had never spoken with. It's highly likely that these firms purchased consumer information from credit bureaus, who obtained the information from creditors that include large retailers.
Beware of the soundness of your credit score and personal information. Please remember that The Peoples Community Bank maintains the confidentiality of your personal information and credit profile. Your information will never be disclosed nor sold to interested parties, regardless of the state of our economy. |
| Mobile Banking is Near
Coming soon - a new, convenient way to view your balances or transactions in an instant. Simple and secure, mobile phone banking will make banking on your terms easy. With mobile banking, you can access balance information, pay your bills, and transfer funds through the browser on your cell or PDA phone.
As you have requested, The Peoples Community Bank will soon offer mobile phone banking to all Online Banking customers. If you have access to the Web on your mobile device, your mobile banking will be fast and convenient. Manage your accounts wherever and whenever you want. More information about our mobile phone banking solution will be released in the coming months. Please stay tuned. |
CALCULATING YOUR CREDIT SCORE - HOW IT WORKS
For many of us, our credit score is simply a mystical number that appears when we apply for credit. The exact score might not mean much, as long as it is sufficient to grant us the loan we're looking for. You might wonder how your score is calculated so you can take the steps to give it a boost, if necessary. Please, read on.
Your credit score is a three-digit number used to anticipate your reliability in paying your bills. The score ranges from 300-850 and is calculated using credit history information from your credit report. When you apply for credit, the lender uses your credit score to make a credit or no-credit decision. The score makes decision-making faster, easier and less subjective.
While there are several different versions of the credit score, the most commonly used version is the FICO score (developed by the Fair Isaac Company). Calculating your score takes into account several aspects of your bill-payment history. Although the specific equation for determining your credit score is proprietary information owned by Fair Isaac, we do know the information used to calculate your score.
Payment history is 35%
The best indictor of whether or not you pay your bills is how you've paid your bills in the past. Late payments, collections, and bankruptcies all affect the payment history of your credit score. Recent delinquencies hurt your credit score more than those in the past.
Debt level is 30%
The amount of debt you have in comparison to your credit limits is known as credit utilization. The higher your credit utilization, the closer you are to your limits. Hence, the lower your credit score will be. As a rule of thumb, keep your credit card balances at a a level approximately 30% of your credit limit or less.
Length of credit history is 15%
Having a longer credit history is favorable because it gives more information about your spending habits. It's good to leave open the accounts that you've had for a long time.
Inquiries are 10%
Each time you make an application for credit, an inquiry is added to your credit report. Too many applications for credit can mean that you are taking on a lot of debt or that you are in some kind of financial trouble. While inquiries can remain on your credit report for two years, your credit score calculation only considers those made within one year.
Mix of credit is 10%
Having different kinds of accounts is favorable because it shows that you have experience managing a mix of credit. This isn't a significant factor in your credit score unless you lack other information from which to base your score. Try to open new accounts as you need them, not to simply have what seems like a better mix of credit.
As the pieces of your credit profile change, your credit score adjusts. Always remember that high scores can go down, and low scores can go up. Being familiar with the scoring system can help you ensure that you achieve the highest score possible to get the loan you need or desire.
Should you have any specific questions about your credit score or the scoring method, feel free to contact any of our loan officers at one of our five locations.
Thank you for your business! |
| Simplified Personal Banking Solutions
Simple solutions, such as checking accounts that fit your needs, not ours, is one promise delivered by Simply Good Banking. To bring more value and convenience to your life, we've streamlined your personal banking options by spreading the most valued components of E-Checking across all checking accounts.
Now, all checking accounts that we offer include free online banking and free bill pay.
And, remember that your Rewards Debit Card, included with each account, allows you to earn purchase points that can be redeemed for gift cards and merchandise. Read more about this program and find a complete list of surcharge-free ATMs on our website - ThePeoplesCommunityBank.com. |
Barneveld Building Project on Schedule
Construction on our new bank building in Barneveld on Hwy 18-151 has been running smoothly, and the doors will open for business in March. Thanks to the outstanding work of our local contractors and subcontractors, the project should be finished ahead of schedule.
Our old building created daily challenges for both customers and bankers alike. However, through careful planning we ensured that the design and layout of the new building solved these problems to improve the quality of your banking experience.
One major challenge and ongoing complaint of the old building was the drive-up area. It's tight, hard to navigate with a pickup, and sometimes congested. To shorten your wait times, we added one additional lane. There will now be three lanes, with the inside lane offering a retractable drawer and the outside lane elevated to provide trucks and vans the additional height that they need.
In addition, we'll be opening our lobby on Saturday mornings from 8:00 am to Noon. This should also help reduce any Saturday morning drive-up congestion and provide you the option to meet with a banker inside.
As you might expect, the lobby area will be more spacious and comfortable. You'll have room to relax while waiting to meet with a lender or personal banker. In addition, all offices and the conference room will be located on one level. No more stairs. Easy to get in and out when your schedule is tight.
We're eager to have you visit our new building this spring. And, we hope that you discover improved convenience and personal service to make each banking experience with us rewarding.
Thank you for your continued business and support. |
| Fraud Alerts...
During the economic downturn, identity theft crimes have been on the rise. In recent months, area businesses and consumers have been targets of multiple scams. Several of you may have been such targets. To stay quickly informed of scams appearing in the area, please sign up for our FRAUD ALERT PROGRAM by emailing dsteiner@thepeoplescommunitybank or by speaking with your personal banker. |
| Mortgage Refinancing in Full Bloom
Can you believe it? Mortgage rates are once again down to the levels we saw in 2002-2003. So how are such low interest rates possible?
When the Federal Reserve (Fed) reduced its target short-term interest rate (Federal Funds) to a range between 0% and 0.25%, this left virtually no room for rates to decline further. Instead, the Fed began purchasing long-term debt issued by the nation's largest mortgage lenders, Freddie Mac and Fannie Mae. These purchases by the Fed increased demand for these mortgage bonds, causing their prices to rise. When bond prices rise, inter
est rates on the bonds decline.
The Fed is making these purchases for two reasons - (1) to assist consumers with good credit histories avoid foreclosure, and (2) to provide low, fixed rates to those consumers who have terms expiring on their adjustable rate mortgages.
Since there is not an exam at the end of this article, you don't have to remember these details. However, it is important to remember that rates this low may not be seen for years to come.
This is a tremendous opportunity for you to refinance, consolidate debt, and ensure yourself of affordable long-term debt.
Any reduction in a monthly loan payment provides you an opportunity to (1) take the savings you realize in monthly loan payments and build a cash reserve, or (2) use the extra cash to increase your required loan payment(s) and payoff debt faster.
It is difficult to predict how long these low rates will last, and challenging to forecast when in the future they might return. Avoid the risk of waiting to find out.
Call us today to refinance and improve your cash flow. | |
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THE PEOPLES COMMUNITY BANK - 222 W. Commercial St., Mazomanie, WI 53560 Toll free: 800-795-2151 Phone: 608-795-2120 Fax: 608-795-2133 www.thepeoplescommunitybank.com This newsletter does not constitute tax, legal, accounting or other professional advice. We attempt to be accurate, but neither we nor any other party shall be held liable for loss or damages resulting from reliance upon or use of this material.
© 2009 The Peoples Community Bank | |
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