Education Articles

Myth #1: It’s okay to max out your credit cards. Some four out of five Americans still don’t know that high outstanding balances are harmful to their scores, even if they always pay their monthly bills on time, and even if they pay the balance in full each month, according to a Bankrate survey.

This is because of something called your utilization ratio. Let’s say you have one credit card and the limit is $5,000. Since experts recommend spending no more than 30% of your limit, and less whenever possible, that means you shouldn’t have a balance, at any time during the month, that exceeds $1,500.

Why? A lower utilization rate shows lenders that you’re responsible when it comes to credit and won’t go wild and spend every single penny up to your limit. (One solution, if you always pay on time: ask for your credit limit to be raised, which will reduce your utilization rate.)

Myth #2: You need to carry a balance on your credit card. Carrying a balance on your credit card from month to month is not necessary to build credit. In fact, you could leave your credit card in your wallet most of the time and be building credit.

“You absolutely, positively don’t have to carry a balance,” says Skrowronski, who recommends paying your credit card on time and in full each month. The only thing you’re doing by carrying a balance is paying interest — and with the average national interest rate at 15% that can add up quickly.

Myth #3: You only need one account to have good credit. A single credit card will help you build a good credit score, but those who have a diversity of accounts have the highest scores.

“It’s hard to get a really strong score without a mix of credit,” says Gerri Detweiler, credit expert at

The people with the highest scores have both revolving debt, (for example, credit cards), and installment loans (for example, student loans, car loans or mortgages). This is because 10% of your FICO score, which is used by the majority of lenders, is comprised of the types of credit you’re using.

Yet, according to Bankrate, 70% of Americans didn’t know that having just one credit account has a negative impact on their score.

Myth #4: Closing accounts has no impact on your score. When you decide to close an account — say an old credit card you never use anymore — you could be hurting your credit score.

Why? “It’s going to effect your utilization ratio, particularly if you only have one card in your wallet or you have high balances on all your other cards,” says Skrowronski.

Your overall utilization ratio is calculated based on the sum of all your accounts. Let’s say you have five credit cards that each have a $5,000 credit limit, which gives you a total credit limit of $25,000. If you close two of these cards, suddenly your limit plunges to just $15,000. If you had balances of $10,000 between the remaining three cards, your utilization ratio would suddenly jump to 66%, well above the 30% recommended by experts.

If you do the math and figure your utilization ratio is in good shape, you could close the card. The account will still be listed on your account for 10 years and won’t damage the portion of your score that looks at the age of your accounts.

“Closing an account can sometimes really be in your best financial interest,” says Skrowronski, such as when you’re paying an annual fee on a credit card you never use or you’ve racked up debts in the past and want to avoid overspending. “But you may just want to cut the card up,” in some cases, she says, and unofficially close it.

Myth #5: Once you pay a bill in collections, it will no longer hurt your credit score. If you’re late in paying a bill and it goes to collections, that information gets routed onto your credit reports. This type of negative information is bad for your credit score and tends to stick around for a while. Even if you later pay the bill, the blemish will probably stay on your reports for a whopping seven years.

Your best bet: Pay your bills on time to avoid them going into collections.

Seniors are prime targets for scam artists, through the mail, the telephone, or the internet and electronic mail. Following are some precautionary steps you can take to safeguard against fraud:

  • Register on the National Do Not Call registry by calling (888) 382-1222. You can also visit their web site at By reducing the telephone traffic from telemarketers, you can reduce the potential for fraudulent activity at the same time.
  • If a telemarketer does call and the call seems suspicious in any way, call the Better Business Bureau (BBB) before agreeing to anything.
  • Secure your mail box. Don’t leave outgoing bill payments in an unsecured mailbox.

The United States Postal Service has produced a digital video disc (DVD) on the different types of fraud and precautionary steps to take to prevent fraud. The DVD is entitled “Dialing for Dollars” and is free. You can order this DVD by contacting the United States Postal Service at (877) 987-3728.

Our eBranch Online Home Banking system allows you access to your UMFCU accounts 24-hours a day, 7-days a week, simply by connecting to

  • Check your current loan and deposit balances
  • See which checks have cleared
  • View both sides of your cleared checks and print the image for your records
  • Transfer funds between accounts AND between financial institutions*
  • Make inter-member account transfers (provided you are a signor on the other member account)
  • Make loan payments by transferring funds from your UMFCU deposit account to your loan(s)
  • Print our e-Statements instead of receiving paper statements via mail**
  • Order new checks for your checking account
  • Apply for loans

eBranch Online Home Banking is FREE of charge and available to all members on United Methodist FCU.

Contact us at (800) 245-0433 and tell us you wish to be set up for eBranch Online Home Banking. If you’re currently using our audio system or our previous home banking module, you’re already set up! Simply enter your member/account number and use the same PIN code to access your account.

*You will need to register information from your bank account at another financial institution i.e. the financial institution’s routing number, your account number, etc. Once you have set up this link, you can transfer from UMFCU and to UMFCU from this other account. Some restrictions apply. Contact United Methodist FCU with any questions or for more information.

**A $2.00 charge will apply if you decide to have an electronic statement AND a paper statement mailed to you.

Debit cards, also known as check cards, look like credit cards or ATM (automated teller machine) cards, but operate like cash or a personal check. Debit cards are different from credit cards. While a credit card is a way to “pay later”, a debit card is a way to “pay now.” When you use a debit card, your money is quickly deducted from your checking or savings account.

You can use your card anywhere merchants display your card’s brand name or logo. It’s a great alternative to carrying a checkbook or cash.

What is the difference between a debit card and a credit card?

Debit means “subtract.” When you use a debit card, you are subtracting your money from your own bank account. Debit cards allow you to spend only what is in your bank account. It is a quick transaction between the merchant and your personal bank account.

Credit is money made available to you by a bank or other financial institution, like a loan. The amount the issuer allows you to use is determined by your credit history, income, debts, and ability to pay. For more information on credit cards, visit our Visa page.

Seven tips for responsible use of debit cards

  • If your card is lost or stolen, report the loss immediately to your financial institution.
  • If you suspect your card is being fraudulently used, report it immediately to your financial institution.
  • Hold on to your receipts from your debit card transactions. A thief may get your name and debit card number from a receipt and order goods by mail or over the telephone. Your card does not have to be missing in order for it to be misused.
  • If you have a PIN number, memorize it. Do not keep your PIN number with your card. Also, don’t choose a PIN number that a smart thief could figure out, such as your phone number or birthday.
  • Never give your PIN number to anyone. Keep your PIN private.
  • Always know how much money you have available in your account. Don’t forget that your debit card may allow you to access money that you have set aside to cover a check that has not cleared your bank yet.
  • Keep your receipts in one place — for easy retrieval and better oversight of your bank account.

*Source: National Consumer League

Recently reports indicate that “phishing” scams are at an all time high. “Phishing” is usually an email purportedly from your bank, your internet provider, eBay or any other institution to which you’ve given personal information. It looks legitimate, but its sole purpose is to defraud you of your account information.

There are some 57 million people in the United States on the receiving end of a “phishing” attempt within the past year.

Avoid being a victim:

  • Spend a few minutes at the web site to check up on the latest permutations of the “phishing” epidemic.
  • Instead of clicking on a link in an email, retype the URL into your browser. That protects you from seemingly legitimate links that actually redirect you to bogus sites.
  • Internet provider Earthlink offers a downloadable toolbar ( available to all Internet users. It can alert you before you enter a known scammer’s web site.

Source: Fast Company magazine, August 2004 issue, page 32.

What is a credit score?

A credit score is a three-digit number that lenders use to objectively measure your creditworthiness. Your credit score is a snapshot of your finances at a particular moment in time. As information in your credit file changes, so will your credit score.

Who calculates my credit score?

Some lenders create their own credit scoring models. Others hire developers, such as Fair Isaac, to customize a scoring model for them (FICO score). The three main credit bureaus (Experian, Equifax, and Trans Union) that compile your credit score all use a FICO scoring model and they weigh credit factors differently. Your FICO score can vary by 30 points to 100 points between the three bureaus.

What factors are taken into consideration for my credit score?

  • Payment history
  • Total debt
  • Length of credit history
  • New credit
  • Credit mix

What can I do to improve my credit score?

Your credit score takes your entire credit history into account, including if you’re chronically late in paying your bills. Also, check your credit report once a year to verify the information is correct because inaccurate information could negatively influence your score.

Where can I find my credit score?

Here are some useful resources that may help:

Source: “Keeping Score: Facts About Credit Scores” – Credit Union Consumer Facts;

We are pleased to offer home banking services via the internet. Delivering these services requires a solid security framework that can protect you and our institution from outside intrusion. The information below summarizes our security framework, which incorporates the latest proven technology. A section at the end also summarizes your responsibilities as a user of the home banking system with regard to security.

There are several levels of security within our security framework. User Level deals with cryptography and Netscape’s Secure Sockets Layer (SSL) protocol, and is the first line of defense used by all members accessing our Home Banking Server from the public Internet. Server Level focuses on firewalls, filtering routers, and our trusted operating system. Host Level deals specifically with our home banking and the processing of secure financial transactions.

User Level

There are several components of User Level security that ensure the confidentiality of information sent across the public Internet. The first requires your use of a fully SSL-compliant browser such as Netscape Navigator or Microsoft Internet Explorer. SSL is an open Protocol developed by Netscape that allows a user’s browser to establish a secure channel for communicating with our Internet Server. SSL utilizes highly effective cryptography techniques between your browser and our server to ensure that the information being passed is authentic, cannot be deciphered, and has not been altered en route. SSL also utilizes a digitally signed certificate which ensures that you are truly communicating with the Home Banking Server and not a third party trying to intercept the transaction.

After a secure connection has been established between your browser and our server, you then provide a valid User ID and Security Code (PIN) to gain access to the services. This information is encrypted, and a request to log on to the system is processed. Session time-outs, a limit on the number of logon attempts, and special browser caching techniques are examples of other security measures in place to ensure that inappropriate activity is prohibited at the User Level.

Server Level

All transactions sent to our Home Banking Server must first pass through a filtering router system. These filtering routers automatically direct the request to the appropriate server after ensuring the access type is through a secured browser and nothing else. The routers verify the source and destination of each network packet, and manage the authorization process of letting packets through. The filtering routers also prohibit all other types of internet access methods at this point. This process blocks all non-secured activity and defends against inappropriate access to the server.

The Home Banking Server is protected using the latest and most powerful firewall platform. This platform defends against every kind of system intrusion and effectively isolates all but approved customer financial requests. The platform secures the hardware running the home banking applications and prevents associated attacks against all systems connected to the Home Banking Server.

Additional measures to ensure the security of information involve the separation of server applications from host data. This means that information of value does not physically reside in the Home Banking Server. Logging of security information occurs at all times and there is always a backup of the information logged about every attempt made to access the system. These security logs allow us to constantly monitor for a wide range of anomalies and to determine if attempts have been made to breach our security framework.

Host Level

After passing through the Home Banking Server, the transaction is sent via secure dedicated communication lines to our Transaction Server which verifies member identity. Once authenticated, the member is allowed to process authorized home banking transactions using host data.

User Responsibilities

While we continue to evaluate and implement the latest improvements in Internet Security technology, users of the home banking system also have responsibility for the security of their information and should always follow the recommendations listed below:

  • Utilize the latest version of either Netscape Navigator or Microsoft Internet Explorer. The home banking system is best viewed and is most secure when you use one of these two browsers, as they are both certified for use at our site.
  • Your PIN must be kept confidential. Utilize a full 4 digit PIN and change it frequently to ensure that the information cannot be guessed or used by others.
  • Be sure others are not watching you enter information on the keyboard when using the system.
  • Never leave your computer unattended while logged on to the home banking system. Others may approach your computer and gain access to your account information if you walk away.
  • Click End Session when you are finished using the system to properly end your session. Once a session has been ended, no further transactions can be processed until you log on to the system again.
  • Close your browser when you are finished, so that others cannot view any account information displayed on your computer.
  • Keep your computer free of viruses. Use virus protection software to routinely check for a virus on your computer. Never allow a virus to remain on your computer while accessing the home banking system.
  • When you follow these simple security measures, your interaction with the home banking system will be completely confidential. We look forward to serving your home banking needs both today and into the future – securely!