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Author: ekoochel

How to Build and Maintain Good Credit

What makes up a credit score?

You can think about your credit score as a “financial GPA”. Your credit score is composed of five main parts. About 35% is your payment history (paying on time), 30% is credit utilization (amount of credit you use compared to the amount of credit you have available), 15% is length of history (so it is not always the best idea to cancel a credit card when you pay it off), 10% is shopping for credit (those hard credit inquiries – when a financial institution checks your credit report when you apply for a loan or credit – stay on your report for 2 years; soft credit inquiries – such as checking your own credit score – do not affect your score), and 10% is mix of credit (the different types of credit such as revolving credit like credit cards, and installment credit like a car loan).

What can I do to maintain good credit?

  • Never miss a payment
    • Missed payments affect your credit score/report for 7 years
    • Sign up for automatic payments
  • Utilize no more than 30% of your credit limit
    • You only need to be within this range on the date your billing cycle ends
    • Utilizing 1-9% of your credit limit, is considered the best way to increase your credit score
  • Remember that rewards are a bonus
    • If you want to spend more to gain more rewards, make sure you are doing it responsibly and staying current on your payments
  • While shopping around, find the best card for you and apply for that ONE
    • Applying for more than one card can negatively impact your score because hard inquiries made by credit lenders stay on your report for 2 years
    • www.nerdwallet.com is a good resource to compare and contrast different cards

How can I establish or repair credit?

  • You may need a co-signer if you are under 21
    • Parent or guardian
    • The co-signer is just as liable to repay the debt as the borrower
  • Secured card
    • Requires a cash collateral deposit that becomes the credit line for that account
    • Often times, this is a great option for people will poor or bad credit scores
  • Time
    • Don’t get discouraged if your credit does not improve immediately – it will come with time
    • Stay motivated and look towards the end goal!
  • Check your credit report frequently

What is a credit report?

Checking your credit report is also important for both maintaining and repairing your credit. You can think of your credit report as a copy of your transcripts, a detailed summary of your financial reliability and history of paying debts. You get three free reports annually, one from each of the credit bureaus – Transunion, Equifax, Experian. It is recommended to request one every four months to monitor any fraudulent activity or errors on your report. Go to annualcreditreport.com to view your credit report.

Checking your own credit report will not affect your credit score. However, every time a lender checks your report, it is considered “shopping for credit”, and can negatively impact your score. Finally, note the report does not include your credit score (the numerical value calculated from information in your credit file that is used by lenders and landlords to assess your “credit risk” at that time).
As always, if you have any questions or need help checking your credit report, we would be happy to help!

Shari Humbard & Hillary Williams – Peer Counselor II

Money Saving Apps for Your Budgeting Needs

For the majority of students, the hardest part of creating and sticking to a budget is having the discipline to continue monitoring it. Part of the reason some shy away from sticking to their budget, is they have a hard time trimming down their current expenses. Today, we are going to explore some of the unique options that are out there to both save money and possibly make a little extra on the side.

Before we start, I would like to review the steps of the budgeting process. First, you need to understand how and where you are spending your money. To do that, you must first estimate what you think you are spending on a monthly basis. This will set the bar to see whether you are aware of your spending habits. Next, you will need to keep track of your actual spending for at least a month. You can do this by saving receipts, journaling purchases, or any other way that works for you. This is a very important step because once you know what you are actually spending; you will be able to see the gaps in what you estimated, compared to what you are currently spending. By doing the first two steps, you are now aware of where your money is going and what changes you can make.

This is where we are at today. When you look for places in your budget to trim expenses, and therefore save money, it can seem a little overwhelming. Here are some options that are available on your smart device to help you save money without necessarily changing your money behaviors entirely.

For Shopping/Entertainment:

  1. Shopkick

If you are one of many who have troubles sticking to your shopping budget, Shopkick is a great app for you. This app allows you to receive free gift cards for the shopping you already do. You can browse products and discover great deals at stores like Target, Starbucks, Best Buy, and more. When you shop, you can earn free points, called “kicks,” and redeem them for gift cards of your choice. If you value your shopping, this is an app that can be of great value to you. Available for: iOS and Android

  1. RetailMeNot

With this app, you can browse thousands of coupons and deals to hundreds of popular retail stores and restaurants. You can save the coupons that you want for easy access and reminders of expiration dates. Why would you pay full price when you can take advantage of discounts, sales and promotions? RetailMeNot brings all of those deals into one place! Available for: iOS and Android

  1. Groupon

This app has a little bit of everything! It offers deals on everything from restaurants to retailers, to hotels along with many other entertainment venues. You can search by location and find many deals on the best stuff to eat, see and do near you. In my opinion, Groupon may have the most options for you to save money, while enjoying life and remaining loyal to your budget. Available for: iOS, Android, and Windows

Eating Out Locally:

  1. Pocket Points

Recently brought to Kansas State University, Pocket Points offers many deals and free items by simply staying off of your smart phone. This is practically free money! This app gives students rewards for not using their phone during class or while on campus. All you have to do is open to application, lock your phone, and watch your points build up. You can then use these points to receive discounts, deals, and free items at restaurants, and stores in Manhattan. Pocket Points is a GREAT way to trim down your monthly expenses. Give it a shot, it is definitely worth staying off your phone! And hey, maybe you’ll meet someone new. Available for: iOS and Android

  1. Tapingo

Joining Pocket Points on Kansas State’s campus, the Tapingo application is another great option for you. This app lets you order on the go and pick it up when it is ready. No need to stand in line! It will definitely add convenience and time back into your schedule. To make it even better, periodically they will offer promotions to help you save money at these campus restaurants. Available for: iOS and Android

  1. EatStreet

EatStreet is another great option for you when looking for food to order. Use your location to find great deals and discounts on the top local restaurants. Find what you are craving and experience the convenience of ordering from your phone. Make sure to check back weekly for new deals! Available for: iOS and Android

Earn Some Extra Income

  1. JoyRun

The JoyRun application is delivery for friends, by friends. It is a delivery service made up by people in your community. If you are stuck at home, request a run from one of your favorite places and a JoyRunner can bring you the food. By creating an account on the app, you can also be the JoyRunner! Going out to eat? Start a run, set your delivery fee and see if anyone wants anything picked up. This is a very unique app that could allow you to make some extra cash without having to do a whole lot. Available for: iOS and Android

  1. Uber

Looking for part-time job? Sign up to be an Uber driver and work only when you want to! After you meet Uber’s requirements, you can become a registered Uber driver and start earning money by driving clients to their destination. So if you need extra income to keep your budget from going in the “red,” sign up today! Available for: iOS and Android

Need Help Budgeting?

  1. Mint

Is it hard finding a budget that works for you? Try Mint! This personal finance application will allow you to track your budget, bills and money. You can get started on your computer or phone. This app brings together your bank accounts, credit cards, bills and investments so you know exactly where you stand. By syncing your accounts, your monthly expenses will automatically be transferred to your Mint account, making budgeting very simple. Available for: iOS, Android, PC

Do You Need Some Further Assistance?

Are you taking advantage of these great opportunities and still having a hard time creating and sticking to your budget? If so, schedule an appointment with Powercat Financial and a Peer Counselor would be happy to help you get on the right track!

Nolan Keim – Peer Counselor II

Worried about student loan repayment? Don’t stress, we are here to help!

Are you a graduating college and worried about student loan repayment? With midterms, finals week, and projects all wrapping up and coming to an end, the last thing we want to think about is student loans, but with a little planning, they are nothing to be concerned about! We will discuss the process of paying back student loans and how to insure the process is a breeze!

Step 1: Figure out who your student loan servicer is:

Many times, people think that student loans are paid back to their university or the government directly. This is NOT the case. While you are borrowing the money from the government, they have loan servicers who handle the repayment of student loans. If you do not know who your servicer is, the first step is to log in to the federal student aid website (WWW. Studentaid.ed.gov). After logging in, you will find all of your student loans listed, with information such as loan balance, interest rate, loan servicer, and type of loan. After reviewing your loans and finding your loan servicer (CornerStone, FedLoan Servicing, Granite State, Great Lakes Educational Loan Services Inc, HESC/Edfinancial, MOHELA, Navient, Nelnet, OSLA Servicing) you can log in to their personal website and create an account!

Step 2: How much will you pay each month:

Student loans are paid back on a monthly basis. There are many different repayment plans that are listed below in the next section, but before you pick a repayment plan, it is good to figure out how large of a payment you can financially handle each month. There are many different student loan repayment calculators online but the easiest to use is the Federal Student Aid calculator. You can find it at www.studentaid.ed.gov. This calculator automatically loads your student loan information into the calculator and offers a table of monthly repayment estimates for each specific loan repayment option. With this, you can get a good idea of which monthly repayment plan will work best with your financial budget.

Step 3: Student Loan repayment options:

Once you have created an account on your servicers website, it is time to decide how to take on student loans repayment. The great thing about student loans is that you have a 6-month grace period before you have to begin repayment, with most loans. If you have not used any of your grace period, you do not have to start repayment on the loans for six months. *With unsubsidized loans, we recommend that borrowers begin repayment on the accruing interest before the sixth month grace period ends. Once the grace period ends, any interest that has accrued on your loans will be tacked onto your loan balance, which will cause you to pay interest on top of that accruing interest.* There are many different repayment plans that are offered when paying back student loans. The standard repayment plan is equal monthly payments for ten years (120 months). If your loan balance is above $30,000 and you are worried that monthly payment will be too high, you can apply for extended repayments, which divide the loan up into equal monthly payments over 12-30 years. There are also income based repayment plans. These are for borrowers who believe that they will not make as much money in their first few years working, but by the end of repayment will have a higher income. With this plan, you will pay a lower monthly payment in the beginning, but periodically through repayment, your monthly payment will increase. Another option available is Income-driven plans. Under this plan there are a few different options that take a percentage of your income and formulates a payment based off of the information provided. If you do not specify, you will be put on a standard repayment plan and will need to contact your loan servicer to be put on a different repayment plan.

Step 4: How to save money with loan repayment:

There are a few different tips and tricks that you can utilize to save money with student loan repayment. The first step is to enroll in an automatic payment plan. Loan servicers offer a .25% interest rate discount to customers who enroll in an autopay program. This will also insure that you do not miss a payment, which could hurt your credit score.

Another way to save money is to be proactive with the loan repayment process. When you make the monthly payment, specify that you would like the put the payment towards the loan with the highest interest rates. Paying down loans with the highest interest rates first, will insure that over time, you are paying the lowest amount of interest possible on your student loans.

There are also ways to get a portion of your student forgiven. If you are planning on working in a public service sector, you are eligible for some type of loan forgiveness. The Public Service Loan Forgiveness is for anyone who works in the public sector (nonprofit, government, state job), and makes 120 qualifying payments. These payments do not have to be consecutive to qualify. If you are a teacher and new borrower, there is a Teacher Loan Forgiveness plan as well. Under this plan, you must have taught full time at a low income school for five consecutive years. Under this plan, you are eligible to have up to $17,500 of your student loan balance forgiven.

To be eligible for these forgiveness programs, you are required to make the minimum required monthly payment until you meet the time requirement.

There are also rural opportunity zones within Kansas that allow for student loan forgiveness. To be eligible, you must live in a rural Kansas County and hold at least an associate’s degree. Under this plan, up to $15,000 can be forgiven (20% of loan balance each year up to $3,000, for 5 years). For more info on this, visit www.kansascomerce.com/rural

Step 5: Don’t Stress

Armed with these tips, you are ready to take on the task of repaying student loans. With proper planning, student loan repayment can be easy and stress free. If you have any more questions regarding student loan repayment, or any other topics, please feel free to schedule an appointment with Powercat Financial. Either I, or another counselor would be happy to assist you!

Preston Tucker – Peer Counselor I

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