With April being National Financial Literacy Month, it’s a great time to do an examination of your money and credit.
Chase offers classes on teaching the community the importance of maintaining a good credit score.
“A credit score talks about how well you have managed your finances in the past. It tells you about your standing in how well you are managing your funds,” said Brian Atkins, Chase community manager at the Skyland Town Center Branch.
Marvin Blunt of northeast D.C. benefited from tips from Chase in a big way. After being incarcerated for nearly 25 years, Blunt needed to rebuild his credit.
He was advised to get a credit card upon his release.
“I knew I had to get my credit score up to do some things I wanted to do in society,” Blunt said, adding that his wife and daughter also served as his credit coaches.
“Once I got the secured card, I used it wisely, paying my phone bill and little things such as gas,” Blunt said, but would often get confused when his credit score would fluctuate.
While attending a financial health workshop at Chase, Blunt was advised to pay his bills on the statement date, instead of the due date.
Blunt added that his credit score increased more than 100 points to over 800, by following that tip. The classes also helped him manage his money and not spend it unnecessarily.
“A lot of people get a card and see money and think it’s their money and go spend it,” Blunt said adding that he was taught that only 30 percent of credit should be used on a credit card.
“I’m not out here playing around with the card because I have money on it,” he said.
Blunt said people trying to rebuild their credit should study it and learn its importance.
Atkins added that bad credit scores can impact employment, the ability to lease an apartment or purchase certain items.
Atkins shared of being in college and finding credit card companies soliciting students to get a credit card, including himself. “I signed up for all of them,” Atkins said, adding that being a college student with limited resources made him get behind on payments.
Once he graduated, he needed a new car, he but because of his low credit score Atkins had to pay a higher interest rate, and his $23,000 car end up costing him nearly $40,000 after his loan was paid off.
“I went to a third-party dealership and a lot of predatory lenders cater to those with low credit scores,” Atkins said.
Credit scores range from a low of 350 to a high of 850.
Atkins said over 700 is a good credit score.
Maritza Gonzalez, Chase community manager in Columbia Heights said that the credit score is made of up different categories, 40 percent is payment history, which consists of making payments on time; 21 percent is credit history, which means how long an individual has had credit; 20 percent is credit usage, which is based on how much money has been spent on credit cards or accounts that have limits; 11 percent is total balance, which is the mix of revolving and installment accounts; 5 percent is based on credit checks, which is the amount of credit inquires and 3 percent is based on available credit.
Gonzalez said one way to establish good credit habits is to live within your means. “Staying in your means is using your credit card and paying it off at the end of the month.”
Atkins said it’s also important for consumers to know what is on their credit statement and always protect it.
Blunt agreed, adding that people should not abuse credit.
“It’s being loaned for when you have an emergency. You should not use it for your happy time or because you want a bag or a pair of shoes unless you can afford it,” Blunt added.
For more information, please visit www.Chase.com/financialgoals.