ICBA News Release
FOR IMMEDIATE RELEASE
Good Credit Is Critical to Securing a Sound Financial Future
ICBA Offers Tips for Consumers to Maintain Good Credit During Tough Economic Times
Washington, D.C. (May 18, 2009)—The Independent Community Bankers of America (ICBA) encourages consumers to turn to their local community bank to learn how to establish and maintain good credit during these economically challenging times. Good credit is essential to a secure and sound financial future and plays a major role in qualifying for various loans.
“Having solid credit can help customers achieve their financial goals—it’s paramount to any financial plan—especially in this challenging economic environment,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “Our nation’s more than 8,000 community banks are an excellent resource and often offer programs within their communities to help customers understand how to establish credit and manage their finances.”
In addition to talking with a local community bank, ICBA offers the following tips to help consumers protect their credit standing during these tough economic times:
- Always pay all of your bills on time. A late payment on a credit card, loan or even your telephone bill can be enough to put you in an at-risk category and possibly trigger adverse actions.
- Whenever possible, pay more than the minimum payment owed (for example, 150 percent of the minimum) to pay off the balance faster and save on finance charges. If you pay just the minimum every month on high-interest loans and credit cards, it can be interpreted as a sign of financial distress. If you are having trouble making payments on your loans or credit card accounts, contact your community banker to let him or her know about your current financial situation. Your community banker may be able to help.
- Avoid excessive credit inquiries by selectively applying for credit. Recent credit inquiries show up on your credit report and can be red flags that you may be strapped for cash. So only allow your credit report to be pulled when it’s absolutely necessary.
- Avoid maxing out and requesting credit limit increases on credit cards for extended periods. A third of your credit score is based on how close you are to your credit card limits. Try not to use more than 30 percent of available credit on credit cards. Also, be mindful that card issuers might interpret asking for an increase on your credit limit as a sign that you are struggling to make ends meet.
“Customers should take advantage of the programs offered at their local community banks to help manage their funds appropriately,” Menzies said. “Community banking is a relationship business. We work with our customers every day and throughout their lifetimes to provide financial services. We make sure they have the tools necessary to achieve long-term financial security.”
To learn more, and to find a list of community banks in your area, visit www.icba.org.