The elusive credit score… you know it’s important, but what actually is it and how does it affect you? We’re here to explain how you can build a good credit score from scratch! 

Become an Authorized User 

Before you open your own credit card, becoming an authorized user on a family member’s card is a great place to start! As an authorized user, your name is attached to their credit card and their payment history is added to your credit files. Be sure to choose someone who has a good track record of paying their bills on time, so their on-time payments help improve your score. You don’t need to use or even have the credit card!  

Ask the primary cardholder to find out whether the card issuer reports authorized user activity to the credit bureaus. That activity generally is reported, but you’ll want to make sure — otherwise, your credit-building efforts may be wasted. 

You should come to an agreement on whether and how you’ll use the card before you’re added as an authorized user. If you would like to use their credit card, we recommend you’re prepared to help pay off what you charge to the card. It’s the kind thing to do for your family members and it also teaches you financial responsibility! 

Start with a Secured Credit Card 

If you’re building your credit score from scratch, you’ll likely need to start with a secured credit card. A secured card is backed by a cash deposit you make upfront; the deposit amount is usually the same as your credit limit. Secured credit cards aren’t meant to be used forever. The purpose of a secured card is to build your credit enough to qualify for an unsecured card — a card without a deposit and with better benefits. Choose a secured card with a low annual fee and make sure it reports payment data to all three credit bureaus: Equifax, Experian and TransUnion. 

• Keep Your Credit Cards Open – Unless your annual fees are through the roof, it’s a good idea to keep your credit card open. Credit bureaus will count a closed credit card against you, so you can pay off the card and leave it open, but don’t close it. 
• Limit Credit Card Applications – Opening multiple credits cards in a short time period will also be flagged by the major credit bureaus. While not always the case, they see this as a sign that someone is unable to maintain an income to keep up with expenses and pay off debt, so your credit score will go down. It’s recommended to wait at least six months in between credit card applications. 
• Set Up Automatic Payments – Paying your loans and credit cards regularly and on time is one of the best ways to build a positive credit. Making these timely payments shows the credit bureaus that you can maintain enough income to pay off debts and are capable of paying them on time which improves your score. 

Take Out a Starter Loan 

Ask us about credit builder loans, aka starter loans! Typically, the money you borrow is held by the lender in an account and not released to you until the loan is repaid. It’s a forced savings program of sorts, and your payments are reported to credit bureaus.  

Another option: If you have money deposited in a bank or credit union, ask them about a secured loan for credit-building. With these, the collateral is money in your account or certificate of deposit. The interest rate is typically a bit higher than the interest you’re earning on the account, but it may be significantly lower than your other options. 

Are you ready to start building your credit score? Talk to our lenders today to apply for a loan! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS #407724

There is no doubt that we could all use a vacation after this year! But that doesn’t mean we’re ready to blow the entire bank account on a trip. You just need to know how you can get savvy about saving on your vacay. Check out these tips for planning a summer vacation on a budget! 

Set a Budget Before You Plan 

Just like we suggest not searching for houses or wedding dresses before you set a budget, you’ll save yourself some heartbreak if you set a budget before planning. This gives you a great foundation to start the rest of your planning. 

To make it even easier on yourself, you can establish the maximum price you’re willing to spend on travel for: 

• Airfare or gas 
• Hotel or rental stay 
• Food 
• Local attractions 

Time Your Trip Wisely 

Planning a budget-friendly summer vacation is easier if you can travel when other people can’t because travel prices—for hotels, flights and car rentals—are virtually always calculated using a surge pricing model that’s based on supply and demand. Your travel costs are always going to be more expensive if you plan your trip during busy seasons of the year. For example, airfare typically goes up in price during holidays when many people are expected to travel, like Memorial Day, July 4^th, Labor Day, Thanksgiving and Christmas. And warm beach vacation spots are pricier during the prime summer season when kids are out of school. 

Try to travel when the local kids at your travel destination are still in school. If your kids don’t start school until September but the local kids from your vacation spot go back to school in August, you’ve hit the jackpot! 

Book Flights in Advance 

According to CheapAir’s “When to Buy Flights” guide, the best time to purchase tickets on most domestic flights is between 21 days and six months in advance, and the lowest price-range occurs between 52 days and three months before you plan to travel. You can sometimes find some last-minute deals and specials on airfare, but it’s better not to risk a high-priced ticket when trying to budget for your vacation. 

Book Plane Tickets One at a Time 

Passengers on the same flight often pay different prices for seats in the same section of the plane for a variety of reasons, but one reason is that many airlines group seats into price buckets. Unfortunately, if you book tickets in a bundle, it will only place you within these individual buckets unless you’re forced to separate. If you’re okay sitting apart from your spouse, book your tickets separately! If your kids aren’t old enough to sit by themselves, you can book two tickets at a time for you and your spouse to each sit with a kid or two but on separate parts of the plane. 

Pack Your Own Snacks 

It’s no secret that airport food is expensive! If you can manage to pack snacks for the airport and plane ride(s), you’ve already managed to shave a few dollars off your expenses! The safest way to ensure that airplane snacks aren’t confiscated by TSA is to bring pre-packaged items in your carry-on. TSA also allows parents or guardians traveling with children to pack extra fluid and liquid that exceeds the 3.4 oz limit. Check out a full list of items children are allowed to bring onto a plane here. Even if you’re traveling by car, it’s much more cost and time-effective to pack items for making sandwiches than it is to stop and buy food for every meal. 

For more ways to save, simply reach out to our team! The bankers at Peoples Bank & Trust are always happy to help you accomplish your financial goals, especially when they’re as fun as a summer vacation! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender