What Credit Score is Considered “Good”? What to know about Credit Scores

March 4, 2019

This guest post was provided by Debt MD ®, a free service that connects consumers with the professional help they need to become debt-free. Debt MD aims to make the path to financial freedom as quick, simple, and stress-free as possible.

A good credit score is becoming more important. A good credit score illustrates to lenders that you are a responsible borrower. There are three major credit bureaus that report on your credit history and determine your credit score. The higher your credit score, the more you’ve established yourself as a responsible borrower. The higher your credit score the more likely it will be to receive favorable interest rates and loan terms.

Did you know credit scores can be requested from other organizations outside of the financial industry? Credit scores not only illustrate responsibility as a borrower but provide a snapshot of how you handle finances. When you want to establish services like a phone, utilities, insurance, or even rent an apartment, providers look at your credit score. This allows them to choose whether they should allow you to obtain their service or not. Even employers are now looking at credit reports prior to hiring someone.

Who Determines a Credit Score?

What’s a three-digit number that can either make or break your financial deal? Yes, you got it right, it’s your credit score! There are several different types of credit scores generated using your credit report. So, in simplicity, you determine your credit score, since you control how you utilize your credit and finances.

A credit report is just that a report on your credit history. It includes details regarding credit card payments, loan payments, and the status of each. Your Credit Score is then calculated using your credit report. Most commonly used is the FICO® score developed by the Fair Isaac Corporation.

What Makes Up a Credit Score?

The FICO® Score is the most widely used credit scoring model. In fact, according to Fair Isaac Corporation FICO® Scores are used in 90% of United States credit lending decisions. FICO® Scores are calculated using five main parts of your credit report. The FICO® Score utilizes amounts owed, new credit, length of credit history, payment, history, and credit mix to calculate your personal score. Each category represents a percentage as illustrated on the chart below, to create your full FICO® Score.

What’s a Good Credit Score?

We now know what a credit score is, what attributes to it, and the main type of credit score used throughout the lending industry, but what is a “good” credit score? Generally, FICO® Scores range from 300 to 850.

Here is a look at the FICO® Score ranges and their equivalent rating.

Credit Score Range: Rating

300 to 579: Very Poor

580 to 669: Fair

670 to 739: Good

740 to 799: Very Good

800 to 850: Exceptional

It is important to note that a “good” credit score cut-off will vary depending on the type of financial institution that you are dealing with. For instance, if you are applying for a mortgage loan, to qualify your score typically must fall between 700 and 759. To qualify for an auto loan your score would ideally be above 740, and to get the best rewards credit card you typically should have a score of 720. If you’re looking to refinance student loan debt you’ll likely be required to have a 650 credit score or higher.

It’s important to recognize that lenders do not solely base their decision on credit scores. In addition to your credit score, lenders may look at your credit history, debt-to-income ratio, assets, and liabilities to determine if you’re a good risk or not. The higher your credit score the better, as it illustrates your reliability as a borrower hence presenting a lower risk to the organization. When a person has a higher credit score they likely will be presented better borrowing options due to their credit history.

How To Find Your Credit Score?

Checking your annual credit report regularly is one of the most important habits to develop. This is especially true if you want to improve your credit score. By verifying your credit record, you’ll be able to check for errors and discrepancies and dispute them when applicable.

Checking your credit reports will also help you to recognize signs of identity theft, which is becoming more prevalent. You can get your credit report at no cost once every 12 months from each of the three widely recognized credit bureaus (Equifax ®, Experian ® and TransUnion ®) from AnnualCreditReport.com.

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2019-07-11

Top 10 SAT Resource Publications for Students

Preparing to head off to college in the next year or two? If so, are you stressing out about the SAT? Colleges use SAT scores for admissions and merit-based scholarships. The SAT has three parts: reading, writing, and math. Studying for the SAT can help familiarize you with what the test looks like, develop relevant strategies and skills, and prepare you to achieve a high score. Here’s a list of self-guided prep books that can help you prepare for the SATs.

The Official SAT Study Guide - The College Board. Pages: 1,145; Price: $19.01-$19.36 The Official SAT Study Guide is a publication of The College Board, the organization that creates and administers the SAT. It includes eight practice tests that are similar to the exam. Each of these tests is available as a free, downloadable PDF on The College Board’s website. In addition to the tests, the book has an additional 250 pages of instruction, guidance, and test information. This volume should form the basis of your self-guided SAT studying program.
SAT Prep Black Book: The Most Effective SAT Strategies Ever Published - Mike Barrett and Patrick Barrett. Pages: 575; Price: $24.50-$28.49SAT Prep Black Book deserves a place on your bookshelf right next to The Official SAT Study Guide. The book is authored by an SAT tutor who has guided many students in preparation for the test. Readers will learn how to use the ins and outs of the SAT to their advantage. It includes a walkthrough of more than 600 official SAT questions. The publication is written in a conversational style and is full of understandable advice for doing well on the SAT.
The Complete Guide to SAT Reading - Erica Meltzer. Pages: 349; Price: $29.19-$33.20The Complete Guide to SAT Reading is a comprehensive review of the reading skills required to achieve high scores on the reading section of the SAT. The author is an experienced SAT tutor who provides breakdowns of SAT Reading types of questions. She gives in-depth explanations and numerous examples of how to effectively work through every kind of problem. This book offers helpful guidance for your SAT prep, no matter your level of reading skills.
SAT Vocabulary: A New Approach - Erica Meltzer and Larry Krieger. Pages: 133; Price: $17.99-$18.95SAT Vocabulary covers critical vocabulary for the reading, writing and language, and essay sections of the SAT. Rather than just providing long lists of words and their meanings to memorize, the book teaches you to understand the various contexts in which vocabulary is tested. You can then test yourself by applying what you have learned with practice exercises.
The College Panda's SAT Essay: The Battle-tested Guide for the New 2016 Essay - Nielson Phu. Pages: 64; Price: $18.99-$21.52Nielson Phu is a teacher who achieved a perfect SAT score when he took the new SAT in 2016. A copy of his high-scoring essay is included in The College Panda's SAT Essay. And, amazingly, Phu states that he's not a naturally gifted writer. In this book, you’ll find Phu’s tips, strategies, and resources to enable you to score well on the SAT essay, even if you don't think you’re a “good” writer. This short book is worth reading cover-to-cover.
The College Panda's SAT Writing: Advanced Guide and Workbook for the New SAT - Nielson Phu. Pages: 270; Price: $10.29-$28.49Nielson Phu loves to write books to help students achieve a perfect SAT score. Don't be intimidated, though - The College Panda's SAT Writing provides comprehensive coverage of what you need to know to do well in the SAT writing and language section. It gives clear explanations of every grammar rule tested on the SAT, from the most basic to the most obscure. It also includes hundreds of examples, drills, and practice questions. To make the study of grammar less boring, Phu has even added in some fun illustrations.
The College Panda's SAT Math: Advanced Guide and Workbook for the New SAT - Nielson Phu. Pages: 254; Price: $22-$28.49The College Panda's SAT Math is a comprehensive guide to the SAT Math section. This publication is aimed at the student reaching for a perfect score, and, in pursuit of this goal, it leaves no stone unturned. The book has clear explanations of the math concepts tested on the SAT, ranging from the simplest to the most complex. It also provides hundreds of examples, over 500 practice questions, and lists of the most common mistakes students make. Even if you don’t think you can achieve that perfect score, this book is an excellent way to brush up on your math skills.
Bring Home the Score: A Private Tutor's Guide to Scoring in the Highest Echelons of the SAT, ACT, SHSAT, GRE, GMAT, LSAT, NCLEX, MCAT, or Any Other Standardized Test - Walter Tinsley. Pages: 86; Price: $9.96-$9.97Don't be put off by the lengthy subtitle of Bring Home the Score even if you have to look up what “echelon” means. This volume is jam-packed with tips, tricks, and strategies to land you among the top scorers on any standardized test - including the SAT. You will learn mental strategies to improve your motivation and avoid burnout from an overly aggressive study regimen. Bring Home the Score can help you create a schedule that’s intense but manageable.
Solve. Create: The Insider's Guide to the ACT and SAT - Scott Moser. Pages: 523; Price: $19.68-$29.95People don’t usually think that standardized tests and creativity go together. The author of this book, a private test prep tutor, bases his strategy of success in the SAT on individualization and process rather than focusing on rote memorization. Reason. Solve. Create. aims to help the reader become a better thinker. For example, the same reasoning skills that are used in writing a poem can also be applied to solving a math problem or correcting a mistake in grammar. Information pertaining only to the SAT is clearly marked.
The Perfect Score Project: One Mother's Journey to Uncover the Secrets of the SAT - Debbie Stier. Pages: 288; Price: $6.45-$16.45The Perfect Score Project is not a traditional SAT prep book but provides an interesting and insightful read for both students and parents. Debbie Stier, a single mother and an author, wanted to help her son prepare for the SAT. To this end, she took the test seven times in one year. She also studied every way possible to prep for the test. The result is a book with tried-and-tested answers to every SAT question a student might be asking themselves: When do I begin? Do I really need test prep with a big name? Do I need a tutor, a class, or can I self-study? What's the one thing I need to know? Stier's son did well on the SAT, and so can you.

All of these books can be purchased online, and the prices are for new and used books as advertised at the time (June 1, 2019) of this writing. The number of pages is approximate and is based on the table of contents for each book.

What You Need to Know About College Scholarships NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the web sites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

2019-07-03

Measuring the Costs of Employee Turnover

Best-selling business management author Jim Collins was asked during a 2001 interview if he had identified a good business response to the economic slowdown that had gripped the nation. His widely quoted answer is as relevant today as it was at the time: “If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could [because] the single biggest constraint on the success of my organization is the ability to get and to hang on to enough of the right people." Nearly 20 years later and in a highly improved economic climate, Collins’ words still encapsulate the biggest challenge facing HR departments of corporate giants and small start-ups alike: finding and retaining quality team members. In an era of competitive recruitment and job-hopping staff, your company risks losing monetary and human capital each time a valued employee chooses to leave. Employee turnover impacts your bottom line and your company's culture. To set wise employee retention policies, you first need to assess the costs of staff turnover accurately and measure the full impact of employee loss.

Direct Costs of Replacing Employees

A talented employee exiting your company costs you money. Estimates of how much employee turnover costs can vary by industry and employee salary. A study by Employee Benefit News estimates the direct cost to hire and train a replacement employee equal or exceed 33% of a worker’s annual salary ($15,000 for a worker earning a median salary of $45,000). Cost estimates are based on calculatable expenses like these:

HR exit interview & paperwork
Benefit payouts owed to the employee
Job advertising, new candidate screening & interviewing
Employee onboarding costs
On-the-job training & supervision

You can track the expenses of your company’s employee turnover using this online calculator, or create a spreadsheet to determine how actual costs add up to affect your bottom line.

Full Impact of Employee Loss

Josh Bersin, a human resource researcher, writing for LinkedIn, refers to employees as a business’s “appreciating assets.” Good employees grow in value as they learn systems, understand products and integrate into their teams. When one of these valuable employees leaves, the business loses more than just the cost of hiring and training a replacement. Bersin cites these additional factors contributing to the total cost of losing a productive employee:

Lost investment: A company typically spends 10 to 20% of an employee’s salary for training over two to three years.
Lost productivity: A new employee takes one to two years to reach the level of an exiting employee. Supervision by other team members also distracts those supervisors from their work—and lowers the team’s collective productivity.
Lost engagement: Other team members take note of employee turnover, ask “why?” and may disengage.
Less responsive, less effective customer service: New employees are less adept at solving customer problems satisfactorily.

According to Bersin, studies show the total cost of an employee’s loss may range from tens of thousands of dollars to 1.5 to 2 times that employee’s annual salary.

Strategies to Slow Employee Turnover Rates

An effective exit interview helps you and your HR team pinpoint the drivers of your company’s employee turnover. You may find that hiring practices need to be refined or employee engagement should be enhanced. Changes to the break room space, such as fresh fruit or games, will allow your employees to relax and come back to work with fresh eyes and a better attitude. This will keep up the workplace morale, shaping your company culture to include perks appealing to younger workers and will lead to increased job satisfaction. Today’s employees are career-oriented and highly motivated. Keep them on your team with other opportunities such as:

Pathway for advancement within the company
Professional development & advanced education
Flex-time & work-from-anywhere options
Management support & recognition
Lifestyle rewards or amenities like catering & concierge services
Culture of shared values & volunteerism

Add Student Loan Benefits Through ELFI

Student loan repayment tops the financial-worries checklist of many recent graduates. Older team members question their ability to pay for educating their children. New, highly desirable HR benefits like student loan contributions and financial literacy education are emerging from these employee concerns—and ELFI for Business is leading the way for employers to incorporate them into hiring packages. You can connect with ELFI directly from your HR portal and access multiple ways to contribute to employees’ student loan debt. We offer new-hire onboarding booklets, educational newsletters and onsite consultations filled with information for you and your employees. Reach out to us at 1.844.601.ELFI to add cutting-edge benefits to your HR employee package!

Learn More About ELFI for Business

NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the web sites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

2019-06-12

Should You Pay Off Student Loans Immediately or Over Time?

When you start your post-college career, you may be tempted to breathe a sigh of relief. Before you do that, you have important decisions to make. You’ll have to stretch your paycheck to cover your new lifestyle and associated expenses: a furnished home or apartment, vehicle, insurance, and hopefully a 401K contribution. If you are like 70% of college graduates, you also have student loans that need to be repaid. In most situations, it's going to be most beneficial to pay off your loans as quickly as possible so that you are paying less towards interest. The average college graduate's starting salary, however often cannot allow for enough additional income to cover more than the regularly scheduled student loan payments. Most student loans have a six-month grace period so you can do some budgeting and planning first - if you need to. We don't suggest using the grace period unless you find it necessary to organize your finances. During a deferment such as a grace period, the interest could still be accruing depending on the type of loan that you have. If you determine that you may be better off establishing sound financial footing and a workable monthly budget before you begin repaying those daunting loans. Keep these tips in mind as you formulate a strategy for debt payoff.

Student Loans Have Advantages

Varying types of debt are governed by different laws and regulations. Banks often base interest rates for consumer credit loans on your established credit rating. Interest rates for auto loans or credit card debt tend to be higher than a mortgage or student loan interest. As you review your debt load and make a plan, remember: student loan debt comes with a few "advantages" that other types of debt don’t offer.

Preferential tax treatment: With a new job, you will be paying taxes on your income. Student loan interest is deductible up to $2,500 and can be deducted from pre-tax income.
Lower interest rates & perks: Federal student loans have lower interest rates and are sometimes subsidized by the government.
Lender incentives: Private student loans may come with incentives from the lender that make them a better deal than other credit types. These include fee waivers, lower interest rates, and deferment options.
Flexible payment plans: Options for lower payments and longer terms are available for both federal and private student debt.
Build your credit score: You can build your credit score with student loan debt. Now, depending on whether you’re making on-time payments or not, you could negatively or positively affect your credit. If you chose to make small payments during deferments, or a grace period, and regular on-time payments you will be more likely to establish a favorable credit record and reduce the amount of interest you pay overall.

Programs to Help You With Student Loan Payments

There are few options for loan forgiveness with regular debt, but student loans offer opportunities to reduce or eliminate your debt. These may come with commitments and tax implications, so be sure you fully understand them if you decide to take advantage of these programs.

Loan forgiveness: Federal student loans may be forgiven, but you'll want to be sure that you're following all of the requirements needed of the program. Be sure before choosing this option that the federal loans you have qualify for the program. Also, keep in mind there could be taxes due on the amount that is forgiven. Some student loan forgiveness programs include PAYE (Pay as You Earn) and REPAYE (Revised Pay as You Earn), Public Service Loan Forgiveness, and Teacher Loan Forgiveness.
Loan Consolidation: Multiple student loans can be consolidated into one payment with the interest rate determined by a weighted average of your current loans - interest rates. Combining multiple loans may be easier to manage on a modest starting salary. Consolidating federal loans usually doesn’t require a good credit score, either.
Refinance, and you could achieve a lower interest rate: Lenders like Education Loan Finance specialize in student loan refinancing, and have options like variable interest rates and flexible terms. Refinancing your debt could make student loan debt easier to manage than other types of credit.

Pay Off High-Interest Debt First

Before you decide to pay off your student loans, think about the financial obligations you’ll be taking on. Instead of carrying a credit card balance or making low payments for an auto loan, it makes sense to continue your low student loan payments and pay off more expensive debt first or debt with a higher interest rate. In the long run, you’ll save money and build your credit score. If you still have doubts about not paying off student debt first, consult a professional financial advisor for help prioritizing your goals and setting up a budget that lets you achieve them.