On this week’s episode of Money, I’m Home, Lynne is joined by Consumers’ Vice President of Member Services Nathan Stinson to discuss the value of a good credit score.

 

[music]

0:00:06.8 Lynne Jarman-Johnson (LJJ): Money, I’m home! Welcome in. I’m Lynne Jarman-Johnson with Consumers Credit Union. From finance to fitness, we have it all. Today, we are going to focus on financial fitness, your financial fitness and boy, do we have a tool that you can use! And you know what, we have the best person to talk to. He is our expert, the person that is constantly making sure our member service is up to the exceedingly five stars, that it is here at Consumers Credit Union. Nathan Stinson is our vice president of member services. Thank you so much, Nate, for joining us today!

0:00:43.8 Nathan Stinson (NS): Hi, Lynne. Thank you for having me. I appreciate it.

0:00:46.0 LJJ: Well, I am really excited about the topic that we’re going to talk about, because I have seen what happens when you truly do transform a life, because you help someone learn not only what a credit score means, but also what can happen if yours needs a little bit of work. So, Nate, I want to say, “Hey, congrats on everything that you’re doing.” We have such a great response from our members about the fact that we are always trying to help and educate, and one of our tools that we have is called Credit Smart, it’s a credit score, and it’s inside our online banking. Absolutely complimentary, members. Hey, Nate, tell us about how important the credit score is, do members like… Are they always asking this question because it seems to come up to me all the time.

0:01:38.4 NS: Yeah, it is a question we get a lot and your credit score is very important. It can decide if you can get an auto loan or a mortgage, or what you can get approved for in the future. So it’s very important, but it’s also very confusing to understand what goes into my credit score, and “How do I help raise my credit score?”

0:01:57.2 LJJ: So, I’m going to give you a story about an individual that I know that this just happened to, that they were applying for a mortgage, and all of a sudden they got a call, very surprising call, they hadn’t looked at their credit score, that their credit score was just really whacky, a little bit low. Well, they dug into it and found out that there was many errors on it, some identity theft even, and it really did impact for a short period of time, until they fixed it, even the opportunity to purchase a house. That’s why it’s so important.

0:02:32.1 NS: Absolutely.

0:02:33.1 LJJ: So, tell us about what a good credit score is.

0:02:36.1 NS: So, good credit score… And it depends. There’s a lot of places you can pull credit score, but a good credit score, I think 700 and above, and there’s a lot of things that go into that. It’s how many balances am I carrying? Have I made on-time payments? How many lines of credit do I have? How many times have I pulled my credit in the last few months? There’s so many things that can go into building a good credit score. I think that’s what’s so cool about Credit Savvy, that we have, is that you can see why your credit score is what it is today, it gives you all of those insights to say, “Here’s why you have a 737.”

0:03:10.4 LJJ: And basically it’s real-time.

0:03:14.3 NS: Absolutely.

0:03:14.5 LJJ: It’s important numbers and it’s not a hard credit pull. You just mentioned something that I think is really important for people to know. What is a hard credit score, and if you’re pulling your information on our online app, people might be nervous that, “Well, wait, I don’t want to have to pull my information over and over again, that also can ding my credit.”

0:03:31.0 NS: Yeah. And a hard credit score really says, “You are applying for a loan,” so you’re looking at taking out a loan. Where a soft credit pull just means a monitor review, and you are not applying for a line of credit, and a soft credit pull does not impact your credit, where a hard credit pull, especially multiple hard credit pulls in a short amount of time can decrease your credit score temporarily.

0:03:51.7 LJJ: So, you mentioned that balances, so talk about what that means. Let’s pretend I have a $10,000 line on my credit card and I pay it every month, but man, it’s up to $9500 balance on it, that’s not the best way to improve your credit score.

0:04:13.1 NS: Nope, and that’s one of the items that can ding your credit score the most is if you have balances, available balances, and you’re utilizing them, the majority of those, that will decrease your score. Where if you want to have a great credit score, you want to be at… A lot of people say 20% or 10% of that credit line, so if you’ve got $10,000 and you can keep it in $2000 or $1000, that will positively impact your credit score instead of hurting it.

0:04:37.3 LJJ: Let’s say that you do have some issues, how easy is it to connect with, I guess, it’s the credit bureaus to try to get those fixed? It seems like, “Oh, my God, it’s just going to be so hard.”

0:04:51.1 NS: Yeah. It could be relatively easy, especially if there’s errors, but the other nice thing is like our Credit Savvy shows, it will show you what you need to do to improve your credit score. So, it’ll say, “Hey, here are some tips for you to improve your credit score.” It even has a goal setting metric on it, where you can say, “I have a 740, I want an 800, what do I need to do?” And it tells you the four steps you need to take to get to that 800 in six months.

0:05:17.7 LJJ: Let’s say you do have a lower credit score, so it’s not as high, but it’s still pretty good, that is though impacting things that you paid for. For example, if you want to get a car, is that where, “Oh, you might pay a little bit more, because your credit score is not as high.”

0:05:35.0 NS: Yep, absolutely. So generally, that will equal a higher rate on your auto loan or your mortgage, which means your monthly payment will be a little bit higher, and that’s why we want to help educate and guide to help you increase your credit score, so we can ideally help you save money in the future.

0:05:49.8 LJJ: And tell us some… How is it that you can actually access this? Now, we have a five-star mobile app. Our online banking is absolutely fabulous. I mentioned at the beginning as complimentary, and that’s no joke, I mean, any member can see what they have, all they have to do is sign up?

0:06:06.4 NS: Yep. All you have to do is go into your app or online banking, there’s a widget right on the home page where you can access it and enroll into it completely free, you don’t have to fill out anything, you don’t have to use anything, you can get your credit score updated every single day, you can get alerts every day with things that have changed. There’s so many great features in it.

0:06:25.8 LJJ: You know the alerts I think are really important, especially when we know for a fact that there is just so much fraud attempts going on, especially in the digital landscape, and so those alerts are extremely helpful.

0:06:41.3 NS: Absolutely, you can know for certain in an instant if someone is applying for a line of credit in your name, and you can take action right away, which makes it so much easier to alleviate then if you didn’t know months down the road, there’s an auto loan out there that someone took out in your name.

0:06:56.3 LJJ: It’s a true peace of mind.

0:06:58.4 NS: Absolutely.

0:07:00.1 LJJ: On a given day, Nate, if you don’t mind me asking, how many members do wonder about their credit score and are surprised to learn whether they need to improve it or “Holy cow, it got better.”

[chuckle]

0:07:15.2 NS: Oh, I would say we have probably close to 50 to 100 members every day that ask questions about their credit score, how to improve it, how did it get here? “What do I need to do to get a better rate?” Absolutely, and this tool really gives you all the options you need to answer those questions for you, right on your phone.

0:07:32.8 LJJ: You know what I really love too, Nate, I love the fact that when it’s time to talk about money, sometimes people get very shy maybe about it, other people just don’t want to talk about it, they might be embarrassed by their credit score, and what we really try to do is get that conversation going and not have people feel embarrassed about the fact that they might… “Hey, here’s some tips you can do to improve your score.”

0:08:00.0 NS: Absolutely, I think the thing to remember, too, is it’s so confusing, unless you work in credit scores every day, there’s so much to it, there’s so much to know, there’s so many little nuances to it. So we are always here to help answer questions, guide you. And I think that’s what this tool does really well is, does those things that you can read yourself, but there’s a lot that goes into it, there’s no shame in that. We are here to help and help guide you.

0:08:25.8 LJJ: What is really cool, too, and I think Tim Kozak, who helps us in our lending department, he was the one who talked to me, because I had kids that were starting out college and away they’re going, and talk to me about what is good credit, and that to have a credit score is a good thing, like you don’t have to be afraid of it, instead you really want to celebrate, even if it’s just going up slowly, one point at a time.

0:08:53.4 NS: To that point, I think what is really cool about this project is, you know if you want to work on, you want to build it, you can put in, “Hey, I’m going to take out a line of credit,” and it will tell you how that will impact your score. So, it even does some predictive or just say, “Hey, you’re doing this, here’s what your score is going to be if you do this,” which I think is really great.

0:09:11.6 LJJ: And tell me a little bit about… You mentioned the balances, some individuals who have an account and they have a credit card, let’s say, they pay their credit card off, and so it says zero. I’ve heard, and tell me if this is accurate, you don’t need to close that account, in fact, it shows really well that you are using your money wisely.

0:09:36.5 NS: Yeah, so there’s two things that go into that, your credit mix, which is what types of products you have, so if you have two credit cards, a mortgage and an auto loan, that’s a great mix and that’s going to help your score. Also, the older lines of credit you have help build your score, so if you have a credit card and you pay it off and you close it out, but you’ve had it for 10 years, you just closed a really old credit line and that’s going to hurt your credit. If you’re not using your credit card, just keep it open, keep it at zero, that continues to help build your credit.

0:10:05.0 LJJ: And again, keep those alerts on just in case something may happen. [laughter] That would not be good. So, hey, Nate, tell me what’s the most… Like a favorite part of your day-to-day work?

0:10:18.7 NS: I would say a favorite part of my day-to-day work is just helping people. I love our members, I love our team. And any opportunity I get to help our members and their financial goals and their financial dreams and financial wellness, I think it’s super rewarding. And then I think just helping our team work in a great environment, where they can continue to help our members. I think those two things are what drives me every day.

0:10:42.4 LJJ: Well, I’ll tell you, you do it sensationally every single day, and I can’t thank you enough.

0:10:48.0 NS: Thank you, Lynne.

0:10:49.1 LJJ: Hey, listen, if you guys have any questions about credit score, if you’re not a member and you would like to have this complimentary service, please stop in to any office, go online, become a member, it’s very easy, and we would love you in our family. I’m Lynne Jarman-Johnson with Consumers Credit Union. Thank you, Jake Esselink, for your production skills. Thank you again, Nate, for your wonderful talent and constantly helping us all learn, and if you have a topic, just send it our way. Money, I’m home! I’m Lynne Jarman-Johnson with Consumers Credit Union.

[music]