What she learned about money, she learned the hard way, through trial and error.

Here are the money lessons she’s passed down to me: 

1. Don’t be afraid to be open with your family about money. Families that don’t talk about their finances will have more money problems and miscommunications down the line. My mother didn’t divulge everything about our family’s financial resources growing up, but she would explain to me how much she charged for her work, and how far that money went or didn’t go in buying groceries, paying the mortgage, etc. Having this base of information helped me budget my money when I went out on my own. 
2. Never pay interest unless it’s on a mortgage. Getting into credit card debt is especially bad because the APR (or penalty) for late payments is so high. There’s no sense in having a savings account if you have credit card debt. Pay the debt down first, then open up a savings account. My mom doesn’t live beyond her means, and from the moment I got my first credit card, implored me to do the same. 
3. When you’re broke, eat spaghetti. It’s cheap and fills you up for a long time. Spaghetti is the famous staple of our house. It’s what my parents ate when they were just out of college and my mom worked full-time to put my dad through law school. Then it’s what my parents ate when my dad worked full-time as a new lawyer to put my mom through law school. Then it’s what we ate when I was a kid. My parents always talk about the value of spaghetti. 
4. If you can, put away five dollars bills to spend for a celebration or a rainy day. My mom is a big fan of the five dollar bill trick. When you stash fives away, then decide to pull them out to fund part of a trip, pay for an unexpected car repair, or throw a party, it feels like free money. 
5. Understand your credit score and keep it high. People with high credit scores get the best deals. And if you see a deal that is too good to be true, read the fine print. It probably is not a good deal.  As a real estate lawyer, this is really important to my mom. People with the highest credit scores get lower interest rates and fees on things like home mortgages and other loans. Therefore, it’s always important to pay bills on time, and if you can’t make all of a credit card payment, it’s imperative to at least hit the minimum. These tips will keep your credit scores from falling. 
6. When Lean Cuisines are on sale, buy ‘em in bulk. They’ll last in your freezer for a very long time. Never buy a Lean Cuisine at full price.  My mom’s a Lean Cuisine queen. To me, they taste like childhood. 
7. When you’re online shopping and you see a box for a coupon code, it means there’s a coupon code out there for the taking. Call the company and ask for it! Mom’s gotten a lot of deals by calling companies on the phone. It’s such a rare thing these days that customer service seems surprised enough to acquiesce! 
8. When going in on something with a group (like dinner at a restaurant), make sure to not cheap out on your portion of the meal or tip. It’s rude and embarrassing. And our family WILL talk about your tackiness at the dinner table. 
9. Even though it’s so important to be responsible with your money, sometimes life is hard, and you’ve just got to just throw your hands up, get in your car, go to your favorite department store and splurge on something nice. My mom will be the first to admit she has a purse problem. She calls going to Nordstrom “visiting the purses.” But sometimes you gotta be good to yourself. 
10. Finally, always have cab fare in your purse when you go on a date. This advice is a little outdated (and was passed to my mom from her mother), but its essence still applies: When you go on a date, be financially able to get a Lyft home if your date turns out to be a dud. My mom and dad started dating when they were 20 (!) so I have no idea if my mom’s ever needed this advice, but I like it anyway. 

No mom is perfect, but I think my mom’s advice is pretty good. I’ve got a freezer full of Lean Cuisines, a solid credit score, credit card debt only on my one card with zero APR, and even during my brokest moments, I’ve tried not to be “the cheap friend.” So THANKS MOM, for the love, care, and financial advice.

Happy Mother’s Day!  

The post Money Lessons I Learned From Mom appeared first on Stash Learn.

Since the beginning of the pandemic, the three biggest credit reporting bureaus—Equifax, TransUnion, and Experian—have offered free weekly credit reports to help consumers stay on top of their credit scores, as many people have experienced layoffs and other difficult financial situations. But on April 20, 2022, that perk will come to an end. Going forward, you’ll be able to request one free credit report from each agency every year. 

Here’s what you should know about checking your credit report. 

What is a credit report?

A credit report is a record of how you’ve handled loans and payments over the course of your financial life. In the report, a credit bureau will consolidate all of your credit information, such as how many credit cards and loans you have, and how you’ve paid down that debt. If you’ve been sued, arrested, or if you’ve filed for bankruptcy, that may appear in your report.  Your credit report will also give you a credit score, which is a points-based rating system that assesses how responsible you are with loans and debt over time. 

Your credit score is determined by a company called Fair, Isaac Co. It’s sometimes referred to as a FICO score. It uses credit history data compiled by credit bureaus Experian, Transunion, and Equifax. Your credit usage information is regularly transmitted to these three agencies. A credit score can range from 300 to 850. The better your credit, the higher your score. Perfect credit is 850.

How to check your credit report

In order to get a copy of your credit report, you submit a request to Annual Free Credit Report Request Service via phone or mail. You can also request one online at AnnualCreditReport.com, which is the only website authorized by the federal government to give you annual access to a free credit report. 

You’ll need to input information, including your full name, your social security number, your date of birth, your phone number, your current address, and any previous addresses from the last two years. Once you do that, you can choose which credit bureau(s) you want to receive a report from. 

You can ask for a report from all three, if you choose, but remember that you only get a weekly free report until April 20, 2022. After that, you may want to space out your requests to the bureaus, depending on how frequently you check your credit report. You can also pay to check your credit report more than once, and the bureaus can’t legally charge you more than $13.50 for the report. 

Why it’s important to check your credit report

Financial institutions use your credit report and your credit score to determine whether or not to lend you money. Additionally, rental property owners, insurers, or employers may look at your credit report. So you want to check your credit report to know where you stand should you want to apply for a loan or get a new job. 

You should also regularly check your credit report for errors, such as incorrect personal information, or accounts that you never opened, or that you already closed, as those things might be indicators of identity theft, which can affect your credit score. Reports of credit card fraud have increased in recent years, surging 44% between 2019 and 2020. With that in mind, you may also want to sign up for a credit monitoring, or identity theft protection service, to keep close tabs on your credit file. 

Your credit score is determined mostly by how timely you are with your credit card payments, and your credit card utilization, which is the percentage of the entire amount of credit that you have available to you, that you’re using at any given time.

In order to achieve and maintain a good credit score, make sure to pay your bills on time and in full, and that you’re not maxing out your credit cards. While common wisdom says you shouldn’t use more than 30% of your credit limit, you probably want to use far less than that percentage to get a good credit score.

The post How to Get a Free Credit Report and Why You Should appeared first on Stash Learn.

One consideration is consolidating your student loans, which can potentially lower your interest rate and the amount you owe each month. But it’s important to know some of the potential downsides of consolidation as well, particularly if you’re consolidating with a private lender, which can come with higher costs and more restrictions than your current federal loan. 

Here’s a quick look at what loan consolidation entails, as well as some of the pros and cons.

Consolidation basics

When you consolidate your student loans, you lump all of your existing student loans into a single, new loan. While there are two main types of student loans—either federal or private—you can consolidate both. 

Here’s the tricky part though: You can potentially consolidate your federal loans into either a new federal loan, or a loan from a private lender. Not so with a private student loan, which you can only consolidate with another private lender, such as a bank, credit union, or online lender. 

To consolidate a federal student loan into another federal loan, you can use the U.S. Department of Education’s Federal Direct Consolidation Application portal. Remember though, when you initiate federal student loan consolidation, you’ll be locking in a new interest rate that’s the weighted average of the interest rates on your loans, says Mark Kantrowitz, a student loan expert and author of How to Appeal for More Financial Aid, based in Chicago, Illinois. This could be higher than the lowest rate you may be paying on your cheapest loan, so it won’t lower your rate.

To consolidate your federal loan into a private loan, or to consolidate another private student loan, you must go through a private lender or bank. The interest rate on a private refinance is based on the credit score of the borrower, and cosigner, if any, says Kantrowitz. 

When looking for a lender to refinance private or your private and federal loans, it’s probably wise to shop around, says Kantrowitz. “The lowest advertised rate is usually limited to a small percentage of borrowers,” he adds. You can also peruse rates and terms through online loan consolidation platforms like SoFi and LendKey. To receive a quote, you typically need to provide personal information, such as your name, address, and financials such as your income.

When applying for a loan, the lender will do a hard pull of your credit, which can affect your credit score. 

Note: There are typically no fees to consolidate student loans. Federal loans don’t charge fees to consolidate as a matter of law. Private lenders, while they could charge fees, typically don’t when you refinance, says Markowitz.  

Interest rates and terms may differ

Many federal student loans are subsidized, meaning the federal government pays the interest while you are in school and for a period of time after you graduate. Federal student loans also generally come with lower interest rates and more favorable terms, such as fixed interest rates, grace periods and income-sensitive repayment plans. 

• The current interest rates for federal loans are 3.73% fixed interest for a direct subsidized or direct unsubsidized loan for undergraduates, and 5.28% fixed interest for a graduate direct unsubsidized loan.

Loans from a private lender are unsubsidized, and can have either fixed or variable rates, and you are responsible for all the interest on your loan.

• The average interest rate as of August 2, 2021 on a 10-year fixed-rate loan is 3.43% from a private lender, and the average rate on a 5-year variable rate loan is 2.62% for people with credit scores of 720 or higher, according to one student loan refinancing site. With interest rates at all-time lows, you could benefit from the low-interest rate environment.

Consolidation pros

• Lower interest rate. One advantage of lumping your student loans together is that it could potentially reduce your interest rate. Note this is the case only if you consolidate your loans through a private lender or bank. If you consolidate your federal loans by way of a Federal Direct Consolidation Loan, as your new rate is a blended one, you won’t be saving on interest. 
• One payment. Instead of making several payments to different servicers and lenders each month, there’s only a single payment you have to worry about, potentially making it easier for you to keep track of what you owe. 
• You might be able to switch to a fixed-interest rate. While all federal loans are fixed rate–meaning the interest rate stays the same for the life of the loan—that’s not the case for private loans, which can carry either a fixed or variable rate. One danger with a variable rate loan is that the rate you pay can go up if interest rates increase. With a fixed-rate loan, you can calculate exactly how much you’ll be paying in interest over the life of your loan. Plus, you’ll be paying the same amount each month. 
• Resets deferment and forbearances. This only applies to federal consolidation loans, as private loans generally don’t allow for deferment or forbearance.  A federal consolidation loan will reset the three-year limit on deferments and forbearances, Kantrowitz says. “That’s because consolidation loan is a new loan, and is eligible for its own set of deferments and forbearances.” 

Consolidation cons

• Giving up benefits of federal loans. If you’re consolidating your federal loans into a private one, Kantrowitz says that you’ll be giving up the benefits that come with federal loans. For instance, ​​income-driven repayment plans, death and disability discharges, longer deferments and forbearances, and numerous loan forgiveness options. 
• More expensive in the long run. Consolidation usually increases the length of time you have to pay your loans. While your monthly payments might shrink, you could end up paying more over the life of your loan. 
• Resets the clock on income-repayment plans and student loan forgiveness. Federal loan consolidation resets the clock on forgiveness on income-driven repayment plans, meaning you’ll be losing accumulated credits. “That’s because forgiveness is tied to the loan, not to the borrower, and a consolidation loan is a new loan,” says Kantrowitz. The same goes for your Public Service Loan Forgiveness (PSLF).

Consider all your options

Student loan consolidation can make sense if you’re concerned about being able to make your monthly loan payments, want to reduce your monthly payment, or shift to a fixed from a variable rate of interest. But it’s important to think carefully about the different types of consolidation loans available to you, as well as the trade-offs between federal and private loans. 

And if you’re considering a private lender, people with poor credit and unstable incomes may be less lucky. “Fixed interest rates on private refinances are at or near record lows,” Kantrowitz says.

“But, this will yield a lower interest rate than federal loans mainly if the borrower…has excellent credit, or if the borrower has federal loans from several years ago, when interest rates were higher.”

The post What to Know about Student Loan Consolidation appeared first on Stash Learn.

Letting the bills stack up without paying them can be even more upsetting. That’s one reason it’s important to build a budget that lets you cover all of your monthly expenses, including your credit card, utility, and other bills. And by paying your bills on time, you can ensure that you’re not overspending. It can also help you build credit, so you can achieve your larger financial goals, like owning a home, and saving for retirement. 

Stash’s Bill Pay tool can work with your budget, allowing you to manage and pay your bills in one place, in-app and online, and on time.¹ 

How to budget for paying your bills

If you don’t already have a budget, creating one should be the first step in building your financial plan. When you make a budget, you’ll account for the money you have coming in each month, the money you need to spend on essentials, the money you spend on non-essentials, and money that you save or invest. 

There are many different ways to budget. One method you might use is the 50-30-20 budget, which divides your income into three categories: essential, fixed expenses (50%), non-essential, variable expenses (30%), and investments and saving (20%). Your essential, fixed expenses include the bills you pay each month, such as rent, utilities, credit card payments, student loan payments, and more. 

So when you’re building a budget, take a look at your bills from the previous month to see what you typically spend paying them, and build those expenses into your budget. Then you’ll know how much money needs to go towards your bills each month, so you won’t be as tempted to spend on take-out dinners, or online shopping. 

Why it’s important to pay your bills on time

Paying your bills on time and in full is crucial to maintaining your financial health, and preventing debt. It can also help you to build good credit. Missing a payment on a bill one month can make it more difficult to catch up on payments. For example, if you miss a credit card payment, the credit card company may charge you more interest leading to you owing even more money than you initially did. 

By paying your bills on time, you can also increase your credit score, which is a point-based rating system that assesses how responsible you are with loans and debt over time. Credit scores, developed by a company called Fair, Isaac Co., are sometimes called FICO scores. Credit scores can run from a low of 300 to a high of 850, which is considered perfect credit. A score of 670 or above is generally considered good credit. Paying your bills on time and in full can contribute to a good credit score.

Having a solid credit score can help you reach your financial goals. If you apply to get a loan for buying a car or a house, or opening your own business, your potential lenders will likely look at your credit score to see how you’d handle that money.

Using Bill Pay with Stash

With Stash, you can use Bill Pay¹ to help you keep track of bill payments. Bill Pay can help you make sure that you pay all of your bills on time and in full by keeping all of your bills in one place. 

After setting up a Stash investment account, in order to use the Bill Pay feature, you need an active Stash Stock-Back® Card² and you need to verify your phone number. Once your card is activated and your phone number is verified, you can set up Bill Pay in the Stash app.

If you’re paying a utility, cable, internet, or credit card bill, you can use Bill Pay to send that company your payment electronically. This electronic payment should be fulfilled through Stash’s third-party payment service in three to five business days. If the recipient requires a paper check, you can also use Bill Pay to send a paper check. Remember that you’ll need to update bill recipients with your Stash routing and account numbers, which you can find under “Account and routing numbers” in your Bank settings. 

The post Here’s Why You Should Pay Your Bills on Time appeared first on Stash Learn.

The price of cars has increased dramatically in recent years due to rising interest rates for auto loans, higher demand globally for cars, the increasing price of gas (until recently)—which has made car parts more expensive to transport. And of course, technology, including upgraded infotainment systems and safety systems all add coats, according to LeeAnn Shattuck, auto expert at The Car Chick and champion race car driver. 

“Your car is more sophisticated than the Space Shuttle,” she says.Additionally, more buyers are opting for SUVs, which are bigger and more expensive than a sedan. (Small luxury SUVs started at $42,000 in 2019 according to KBB.)

With average car prices increasing rapidly, you may be tempted to increase the length of time you have to repay your loan so you can afford everything you want in a vehicle. And car salesmen won’t stop you. According to a 2019 Experian LTD study, more than one third of new cars are purchased with loans lasting at least six years. That’s an increase of more than 20% compared to ten years ago.

Dealerships are selling loans

In fact, car dealerships now make more money selling you financial products than the cars themselves. 

Historically, most auto loans maxed out around five years. But over the last several years, lenders have realized consumers are open to taking out six or seven-year car loans, which is great news for them: It’s in the lender and dealer’s best interest to pull you into a longer loan since you’ll end up paying more over time. 

“Do the math yourself,” Shattuck says. “Don’t let the dealer do the math for you, as they will extend the loan term out as far as needed to get you to say ‘yes.’ It’s not their job to help you make a smart financial decision–that’s all on you.” 

A (value) losing game

Besides owing more over time, another problem with six and seven-year loans is that as your payment stretches on and on, your car value decreases. Your car loses 10% of its value when you drive it off the lot, 20 % more in the next 12 months, and then 10% more every year for the next four years, according to Carfax, a service that supplies vehicle history reports to consumers. 

Plus, most people want a new car before they’re done paying off their last one. 

“The challenge they face will arise two years after their purchase when they want to move into a different car. What are they going to do then with the negative equity they owe on the car?” says Zach Shefska, auto expert at Your Auto Advocate, a car buying service that employs former dealership employees to research, locate, and negotiate car deals on behalf of their customers. “No one thinks about this when they buy their first car and get the monthly payment that they want. It’s when they get bored of their car and are faced with the ‘oh crap’ moment of ‘you owe $4,000 if you get rid of this car today,’ that it becomes reality.”

Tips for smarter car borrowing

So what should you do if you’re in the market for a car, but don’t take out a loan you’ll regret later? The experts have some ideas:

1. Cap out at a three-year loan. “If you don’t feel comfortable with the monthly payment for a 36 month loan, then you should be looking for a cheaper car,” Shefska says, meaning if you need to finance your purchase, you should make sure you can pay off the loan within three years.
2. Don’t roll equity from your last car into a new one. Wait until you can pay off your current car before taking the plunge to get a new one. “Many people roll over the negative equity into a new loan and dig the hole deeper,” Shattuck says. “I’ve seen people essentially paying for two cars under one loan.”
3. Buy used. The bright side to a car’s value rapidly decreasing from the moment it’s driven off the lot is that you can buy a used car for so much less than a new one. The average used car price is $20,000, compared to nearly twice that for the average new car, according to reports. That might explain why the Experian study on car loans found that only 20% of used car buyers took out 6+ year loans (compared to more than 33 percent of new car buyers). 
4. Look for good deals this spring and summer. “The good news is that we expect rates to drop and the manufacturers to release more incentives, including special low APRs, to get people to buy cars during this crazy time,” Shattuck says, referring to the Covid-19 pandemic, which has temporarily stalled the economy and auto sales.

The post Why a Longer Car Loan Might Not be for You appeared first on Stash Learn.

Fair Isaac Co, the company that creates the FICO score, said it could lower scores for consumers if their debts increase, and they skip payments, according to the Wall Street Journal.

The changes come as U.S. consumers have taken on record amounts of debt in recent years, and could be an acknowledgement that financial lenders may be losing confidence in the economy, according to some reports. Total U.S. consumer debt stood at nearly $14 trillion in the third quarter of 2019, according to the New York Federal Reserve, eclipsing the previous record of $12.7 trillion set in the third quarter of 2008.

The changes also come despite increases in credit scores nationally.

Who will be affected?

Approximately 110 million consumers are likely to experience changes to their credit scores, according to CNBC. Most people will reportedly see a movement of less than 20 points in either direction. Forty million will reportedly see a shift of more than 20 points upward, and another 40 million will see a shift downward. 

People with scores of 680 or higher (considered good credit) are likely to see increases to their scores, while those with scores less than 600 (considered fair to bad) who miss payments or increase their debts, are likely to experience decreases, according to the Wall Street Journal. FICO will also begin flagging people who sign up for personal loans, a category of riskier loans that has surged in recent years. 

Why is this happening now? 

Fair Isaac is introducing a new credit scoring model that it’s selling lenders to help them to identify the best credit risk opportunities as indebtedness rises, according to reports. However, lenders have a choice of which credit score models they use, including older models from Fair Isaac. 

It’s something of an about-face for Fair Isaac, which has spent years trying to incorporate other consumers information that might help increase consumer scores, such as cell phone bills and on-time rent payments.

More about credit scores

Your credit score is a key part of your financial life. It determines how much credit you can get, the interest rates you pay on your loans, and how much it might ultimately cost you to buy a house or a car, among other things.

Fair Isaac uses credit history data compiled by credit bureaus Experian, Transunion, and Equifax to determine your credit score. Your credit usage information is regularly transmitted to these three agencies.

A credit score can range from 300 to 850. The better your credit, the higher your score. Perfect credit is 850.

Your credit score is determined based on your use of credit.

What you can do

The most important factor is how well you handle credit, which chiefly means how timely your payments are. If you’re late with payments or have stopped paying a loan, that’s going to have a negative impact on your credit. Another key factor is how much of your available credit you use. As a general rule, try not to use more than 30% of your total credit lines. 

You can find out more about how to improve your credit score here. 

The post Why Your Credit Score Could Take a Hit appeared first on Stash Learn.

That’s according to credit-reporting company Experian, which released its latest annual Consumer Credit Review, a survey that ranks each state by credit score. In 2019, the average credit score in the U.S. was 703, increasing two points compared to 2018. Additionally, 59% of Americans have a credit score that falls above 700, the survey found, which is generally considered a good score. 

States with the highest and lowest credit scores

Minnesota has topped the list of highest credit scores for the past eight years, according to Experian. The winner is followed closely by South Dakota, North Dakota, Vermont, and Wisconsin on the list of highest credit scores. The states with the lowest credit scores are South Carolina, Texas, Alabama, Louisiana, and Mississippi.

Wisconsin had the biggest jump of any state this year, seeing an increase of seven points. Here’s how the top five states scored:

*Source: Experian

Here is how the bottom five states scored:

*Source: Experian

In 2019, 42 states saw increases in their average credit scores compared to 2018, while nine states saw no change. Thirty-four states reported an average credit score of 700 or higher. If you don’t see your state in the top five, you can find where your it falls on the map below.

*Source: Experian

What does a “good” credit score mean?

A credit score is a point-based score developed by a company called Fair, Isaac Co. It’s sometimes referred to as a FICO score. It uses credit history data compiled by credit bureaus Experian, Transunion, and Equifax. Your credit usage information is regularly transmitted to these three agencies.

A credit score can range from 300 to 850. The better your credit, the higher your score. Perfect credit is 850.

Banks and lenders use your credit score to assess how responsible you are with loans and debt over time. Your credit score is determined by a variety of factors including your credit history, which is based on how many credit cards and loans you have, how large a portion of your available credit you use, how timely you are with your payments, and more. In theory, this helps future lenders assess the risk you pose to them.

Credit scores are considered within these general guidelines, according to Experian:

If you’re on top of paying your bills, your credit score is more likely to fall into the good to excellent range. You can work to improve it if your credit score doesn’t fall within that range.

Increasing debt in the U.S.

While personal loan debt is the fastest-growing debt in the United States, average credit card debt grew second fastest, increasing nearly 3% to $6,194 from 2018 to 2019, according to Experian.

Personal loan debt is different from credit card debt. Consumers usually apply for a personal loan from a financial institution, and they often use it to consolidate credit card debt and other loans. It often carries a lower interest rate, according to Experian.

How to Catch Up

Raising your credit score is probably easier than you’d think. But it’ll require organization and a disciplined approach. If you have bad credit, here’s how to start improving your score:

• Make all of your payments on time—setting up payment reminders can be helpful.
• Try to keep your balances low.
• Keep an eye on your credit reports.
• Try using a free credit score app on your phone to stay on top of your score.
• Only apply for more credit if you need it; Opening too many accounts in short order can hurt your score.

The post Giving Credit Where Credit Is Due appeared first on Stash Learn.

Two years ago, cybercriminals gained access to Equifax’s network by exploiting a website vulnerability, making off with the personal information for 147 million U.S. consumers (nearly half the country’s population). That information included names, addresses, Social Security numbers, birth dates, and in some cases driver’s license numbers.

Additionally, criminals walked away with credit card details for 209,000 consumers, and personally identifying information related to credit disputes for an additional 182,000 consumers, according to Reuters.

Here are the details:

• Equifax agreed to pay up to $700 million for problems related to the security break in two years ago. That deal must still be approved by a federal court.
• The settlement is reportedly the largest payment in corporate history for a cybersecurity breach. The money will go to 48 states that launched lawsuits against the company for damages, as well as to consumers, to help them restore their online identities, and to repair other financial data.
• $425 million of the settlement money reportedly will be used to set up a “restitution fund.” While the money is slated to go to consumers who suffered financial damage as a result of the hack, it will be hard for consumers to prove they were actually affected by the breach, experts warn.
• Consumers who are already signed up for credit monitoring services–which monitor for fraudulent borrowing behavior–may be eligible for a one-time reimbursement of $125. Other consumers may be eligible for up to 7 years of free credit monitoring and identity restoration services.
• Consumers who can prove they suffered losses related to fraud and misuse of their personal information may be eligible for repayment of up $20,000.

You can find out more about the settlement here.

What is Equifax?

Equifax is one of three credit reporting agencies, or bureaus. The others are Experian and Transunion. Credit reporting agencies collect data on consumers related to all aspects of their financial lives, including bank and credit card account information, mortgages, and bankruptcies. They file this information in something called a credit report, and sell it to mortgage, automobile, and credit card companies, among others, that wish to build customer profiles for loans.

Credit reporting agencies also create something called a credit score, ranging from 300 to 850; the latter is considered perfect credit. Credit scores affect the cost of loans, and all consumers who have applied for credit have a credit score.

More about the breach

The information stolen in the Equifax break-in is most typically bought and sold by criminals on the black market, and via something called the Dark Web, an underground criminal network. So far, there is no evidence that the information has been used for that purpose. That has led some experts to theorize a foreign nation was involved in the attack, for the purpose of spying.

Numerous other companies in recent years have suffered big hack attacks resulting in the loss of important customer data. In 2018, hotel chain Marriott announced that its systems had been hacked by criminals who made off with data related to 500 million guests. Similarly, Yahoo had email addresses for 3 billion customers stolen in two separate attacks starting in 2013, and JPMorgan Chase which lost names and log-ins for about 80 million accounts in 2014. The Equifax hack attack, however, is the most significant such breach in terms of potential damage to consumers, financial experts said.

Find out more about the Equifax hack here.

The post All About the Equifax Data Breach Settlement appeared first on Stash Learn.

Stumped? You’re not alone. Less than half of Stash customers answered that question correctly on our 2019 Financial Literacy survey. (The correct answer is three and a half years.)

Every year Stash conducts a study of its users, to understand how well they grasp financial basics.  In February, Stash polled 4,800 customers about their financial knowledge and habits, including the use of credit, investing and retirement fundamentals, as well as basic financial principles such as how interest rates and inflation affect borrowing and saving.

While the results of Stash’s 2019 survey show slight improvements among our customers compared to our 2018 survey, lack of financial literacy continues to be a big problem in the U.S. for everyone. The Stash survey shows that so-called Generation Z, those who are currently between 18 and 24, may particularly need more financial education.

Meanwhile, managing credit continues to be a big problem across all age groups. One way you can see that is in the ever-increasing amount of debt that consumers take on. Consumer debt is at a record high, of more than $4 trillion, which comes out to about $4,300 per household.

Here are some top takeaways from this year’s survey:

Gen Z may need more education

So-called Generation Z, people who are currently between 18 and 24 years old, showed less knowledge of financial basics than older generations, particularly when it comes to using credit.

For example, two-thirds of Gen Zers demonstrated confusion about the advantages and disadvantages of credit.

• Gen Z more likely, by 10 percentage points, to say that credit cards could be used to pay for things they couldn’t afford, as well as to alleviate the burden of large expenses by allowing them to pay a monthly minimum.
• 71% of Gen Z respondents said it was important to pay their balances in full each month, compared to 77% for all other generations, and 80% for those in the Baby Boom generation.
• Gen Zers were more likely to believe that maintaining a balance on credit cards can improve your credit score than all other generations, by six percentage points. (27% vs. 21%.)
• When it comes to retirement accounts, 74% of Gen Zers know they can fund both a 401(k) and an IRA, about 10 percentage points less than other generations. Similarly, 85% know that a retirement account is actually a brokerage account, compared to 95% for other generations.

Women vs. Men

Women and men showed very similar knowledge of financial basics, with some differences related to investing and use of credit.  In fact, 81% of women answered all questions on the survey correctly, compared to 84% of men.

However, there were differences, particularly when it comes to some of the more technical aspects of investing:

• 81% of women said it was reasonable to expect a rate of return between 0% and 15% for a fund with moderate growth goals, compared to 88% of men.
• Nearly 30% of women said money would do better in a savings account or emergency fund rather than a brokerage account to keep up with inflation, compared to 20% of men.
• About 35% of women don’t understand the relationship between inflation and interest (vs. 24% of men).

In contrast, women seemed to know more about credit, with 44% saying one potential benefit of having a credit card is to build credit, compared to 39% of men. Similarly, slightly more women than men said the best tactic with credit cards was to pay your balance in full each month (78% compared to 76%).

Check yourself

Becoming financially literate is a lifelong process. Check out some of these questions. If you answer “no” to more than one of them, it may be time to start brushing up on your financial knowledge.

• Do you spend less than you earn?
• Do you always pay your bills on time?
• If you have debt, do you pay more than the monthly minimum?
• Have you created an emergency fund that can cover three to six months of expenses?
• Do you have medical, home-owners or renters insurance, to insulate you from financial shocks?
• Have you created a retirement savings plan?
• Do you know your credit score, and what it means?

The post Why You May Have a Financial Literacy Problem appeared first on Stash Learn.

The change is part of a new law, passed in May, that rolls back some of the bank regulations put into place following the financial crisis, in 2010.

We’ll break it down for you.

What’s a credit freeze?

A credit file freeze prevents anyone from taking out new credit in your name. Credit bureaus had previously charged for the service in at least half of all states.

What’s a credit file?

A credit file contains all of the information about your loans and credit accounts, in addition to personal information about you, including your name, address, Social Security number, and employment information.

Each of the three credit reporting bureaus—Experian, Transunion, and Equifax—collects this information and provides it to lenders when they perform a credit check on you.

What’s a credit score?

The information in your credit file is turned into a credit score.

A credit score is a point-based record developed by a company called Fair, Isaac Co. It’s sometimes referred to as a FICO score. It uses credit history data compiled by the three credit bureaus. Your credit usage information is regularly transmitted to these agencies.

The score is determined by a range of factors, including your credit mix, repayment record, the amount you owe, and how often you apply for credit.

That information is then compiled into a score, which changes over time based on your credit habits.

A credit score can range from 300 to 850. The better your credit, the higher your score. Perfect credit is 850. Many banking and credit card apps will give you access to your credit score

How do I freeze my files?

You must contact each of the credit bureaus individually to place a freeze on your file.

You can do that online, at the websites listed below. After answering some security questions, each site will give you a PIN that you’ll need to unfreeze your file if you plan to apply for new credit.

TransUnion: transunion.com/credit-freeze

Experian: experian.com/freeze/center.html

Equifax: www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

You can also call each agency, or write a letter requesting a freeze.

Some experts also recommend freezing your credit at something called the National Consumer Telecom and Utilities Exchange, as criminals could also use your information to open a cellular account in your name.

National Consumer Telecom and Utilities Exchange: www.nctue.com/Consumers

Good to know: In addition to checking your credit score, you should check your credit file, or report, at least once a year for any mistakes, which could include evidence of fraudulent accounts opened in your name.

By law, you’re entitled to one free credit report annually from each of the three credit bureaus.  You can get all three at a centralized website set up by the credit bureaus, called annualcreditreport.com.

Additional information

You can set something called a fraud alert on your credit report. A fraud alert requires businesses and lenders to verify your identity before they open a credit account in your name. These alerts are free and last for one year. When you put an alert on your file with one credit bureau, it will notify the other two to do the same.

Why is online security a big deal?

The change comes as a result of a hack attack about a year ago.

In September 2017, cybercriminals stole the personal details of 148 million U.S. consumers from Equifax, one of the three credit reporting bureaus in the U.S. The information taken included Social Security numbers, home addresses, credit card numbers, driver’s license numbers, birth dates, and passport information.

The stolen information is typically bought and sold by criminals on the black market, and via something called the dark web.

It’s likely that your information has been stolen in at least one of these breaches. Consumers can check to see if they were affected in the Equifax breach by entering their information at this website.

Numerous other companies in recent years have also suffered big hack attacks resulting in the loss of important customer data. Two such attacks include Yahoo, where names and email addresses for 1.5 billion customers were stolen in 2016, and JPMorgan Chase which lost names and logins for about 80 million accounts in 2014.

In 2015, health insurance provider Anthem lost nearly 40 million records, also affecting 80 million customers.

What can criminals do with my information?

• The Equifax break affected just about every U.S. consumer who has applied for credit and involves up to five pieces of personal information, which is enough for criminals to open accounts in your name.
• In addition to credit card accounts, cybercriminals can apply for other loans in your name, including mortgages. Additionally, they can commit medical insurance fraud, or file for tax returns. With your personal information, it’s also possible for cybercriminals to commit non-financial crimes in your name.
• Identity theft resulting in the opening of fraudulent accounts can affect your credit score.

The post It’s Now Free to Freeze Your Credit: Here’s How to Do It appeared first on Stash Learn.