10 Scams Targeting Bank Customers

Senior Man Giving Credit Card Details On The Phone

The basics on how to protect your personal information and your money.

The FDIC often hears from bank customers who believe they may be the victims of financial fraud or theft, and our staff members provide information on where and how to report suspicious activity. To help further, FDIC Consumer News includes crime prevention tips in practically every issue. As part of that coverage, we feature here a list of 10 scams that you should be aware of, plus key defenses to remember.

List of 10 scams.

To learn more about how to avoid financial scams, search by topic in back issues of FDIC Consumer News and the FDIC’s multimedia presentation Don’t Be an Online Victim. Also find tips from the interagency Financial Fraud Enforcement Task Force.

How to Fix Your Credit Before Applying for a Loan

If you are thinking about applying for a mortgage or an auto loan, understanding your credit score is one of the first steps. Your credit score will determine what rate you will get your mortgage at, or if you even get it at all. If you have bad credit you may be rejected or pay a much higher interest rate on your mortgage. There is good news however, a low credit score is not permanent, and there are steps you can take to raise your credit score. So whether you are in danger of not being approved for a mortgage, or you just want to improve your score in hopes of a better interest rate, here are some simple steps to follow to raise your credit score.

Check your score
This seems like a no brainer. The very first step is to see where you sit. Pull a credit report and check it for errors. Your credit report will include all of the criteria that factors into your score. Check your report to make sure account balances add up and there are no incorrect accounts reporting in your name.

Keep your credit balances low
Keep an eye on your credit card balances. The sweet spot to improve your credit is to utilize 30% of available credit. Essentially this means if you have a credit card with a credit line of $1,000 the best balance to keep on it is $300. You also want to avoid large fluctuations on your credit card, this means not charging any large unnecessary purchases to your credit card. If you have multiple credit cards, consolidate them down to one or two, this will make them easier to monitor.

Pay bills on time
This also seems like a no brainer, but essentially your credit score is letting lenders know that you have a history of paying back money you borrow. Late payments can stay on your credit report for up to 7 years. If you have a hard time making payments on time, set up payment reminders or automatic withdrawals.

Rebuilding your credit can take some time. You do not want to learn you have a low score when you find your dream home, so if you are even thinking about looking for a home it’s a good idea to check your credit and work towards starting to improve it. Payment History and Credit Utilization make up 65%  of your credit report, so consolidating debt, keeping credit balances low, and paying on time can make a huge impact on your credit score.

Renting Vs. Buying a Home

Should you rent, or buy a home? Eventually most people are faced with this question, does it make more sense financially to rent or buy. Each decision has its perks. By renting property you have a landlord who takes care of maintenance issues, whereas owning your home means you are responsible for home improvement, but by owning a house it becomes an asset. Everyone’s situation is different and there is not a one size fits all plan for everyone.

While there are many things to consider when deciding if homeownership is right for you, here are a few things to think about:

1.  Do you have a steady job or income? 

Do you have a job with a certain sense of security? Do you plan on changing jobs anytime soon? These can be huge factors in getting approved for a home loan as well as being a successful homeowner.

2. How long do you plan on staying? 

If you are planning on living in a city for just a few years, it can make more sense to rent, as you are not tied down to a specific area. If you are ready to put down some roots, then it may make sense to purchase your home. If you plan on staying in one spot for a prolonged period of time, then it may not make sense to have expensive rent payments when you could be putting it towards a mortgage.

3. Responsibility vs. flexibility 

Would you prefer the responsibility of owning a home or the flexibility of renting? If you own a home and have to move for work, it may take a long time to sell your house, whereas it may be easier to pick up and move when renting.

4. Freedom

Owning a house means that you are free to make any changes you want, big or small. Want new appliances or to put holes in the walls? Want to repaint or have pets? When you own a home you really are the master of your domain, and you do not have to seek permission from a landlord before doing anything to the house. Freedom to be free of answering to others can make home ownership worth it to some people.