Want a good credit score? 4 tips to talk about credit

When my nephew was heading off to college a couple years ago, we had a quick talk about credit. I wanted to help him avoid some of the mistakes I made as a young adult because I didn’t realize then the time and care it takes to build good credit, and how quickly it can erode.

I told him about a simple way to establish credit and a good credit score: Get a credit card, use it to buy something small each month – laundry soap or dinner out with friends – and set up an automatic payment with his checking account to pay the total off every month.

This is a simple way to establish good credit, I told him, so that when it’s time to buy your first car or even your first house, you can get a loan and more favorable terms than someone who hasn’t managed their credit responsibly.

This month, we’re trying to spark those kinds of conversations all over America through our participation in the American Bankers Association’s Get Smart About Credit Day (Oct. 15, 2015) and our annual “How America Buys and Borrows” survey — an annual pulse of consumer attitudes about credit.

For some of us, talking about credit can be about as much fun as a trip to the dentist. It can be a difficult conversation to have, especially if you’re trying to help a loved one.

In fact, in this year’s How America Buys and Borrows survey, 61 percent of respondents said they’d rather share their weight on social media than share their credit score! Clearly, this is a sensitive topic.

But it’s also one that needs attention. Fifty-seven percent of millennials in that same survey told us they’ve lost sleep thinking about their credit situation.

So how can you break the ice? I always share these four tips with parents and others wondering how to help kids establish credit:

  1. Start early. Don’t wait. Have conversations about establishing and building good credit as soon as the kids show an interest and are old enough to understand financial concepts.
  2. Check back in. Like many things in life, this isn’t a one-and-done conversation. When kids get that first credit card or take out a student loan, check back to see how they’re doing with payments.
  3. Be a role model. Do you check your own credit report annually? Create a budget and live by it? Share your own credit and budget-management tips so kids can learn from your example.
  4. Know that every conversation counts. Establishing and building good credit takes time. Every conversation you have helps identify ways to develop habits that build long-term financial health.

Today, my nephew has outstanding credit and when he’s ready to take on more financial responsibility by buying a car or his first home, he’ll have no problem getting the financing he needs.

More importantly, he has a healthy understanding of why it is so vital to manage his credit well.

I texted him recently to ask him what his credit score is, and he didn’t hesitate to respond. He texted back immediately and added, “Hooray for good credit!”

Hooray, indeed.

For more information and tools about ways to establish or improve credit – or better manage debt – visit Wells Fargo’s Smarter Credit™ Center and our free financial education program, Hands on Banking®.

Weight or credit score? Wells Fargo infographic of finding that consumers would rather share their weight than credit score on Facebook

About Shelley
Freeman leads Wells Fargo’s Consumer Credit Solutions team, which includes management of the company’s credit card, personal lines and loans, direct auto, retail services, student lending and other businesses.

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4 tips students wish they’d followed when preparing for college

Photos of Lee, Gamez, Villaverde, and Sprong

(Clockwise from upper left) Lee, Gamez, Villaverde, and Sprong share college tips with high school students.

Many things have changed since I went to college. But one thing hasn’t: the need for students and their families to plan ahead for a successful college experience.

College can be an overwhelming process. Not only does it represent the start of a new journey academically, but also financially. At the age of 17 or 18, the notion of planning for college can seem confusing and challenging, so it’s important to know that you’re not alone.

Sometimes, it’s helpful to hear tips from people who have done what you want to do.

That’s why our Student LoanDownSM Blog has posted a series of stories featuring actual college students offering advice to their younger peers. These four tips are spot on:

  1. Be more open-minded. Don’t be concerned with the name of the school. Consider all your options and keep them all on the table.” – University of Arizona student Tarren Villaverde
  2. Slowly chip away at the process. Work on it piece by piece, little by little, leading up to the deadline. Set goals along the way to get to the bigger picture.” – Loyola Marymount University student Alec Lee
  3. Don’t worry too much. Everything works out. It doesn’t really matter if you get into your dream school or not. There are many other schools that have awesome programs.” – Southern Methodist University student Ginger Sprong
  4. Look for scholarships, scholarships, scholarships. Even after I got into Texas Tech, I was able to apply for several that helped pay the following year’s tuition.” – Texas Tech student Gabriella Gamez

Choosing where to go and how to pay for college are just a few of many decisions you’ll have to make during this stage of your life. When it comes to leaving the nest, there are numerous financial decisions to make ― which is why Wells Fargo refreshed its Get College ReadySM interactive website. The site is designed to help students, parents, and high school counselors plan and prepare for a successful college experience.

Since we relaunched the site in April 2015, we’ve seen a tremendous response. The number of visitors using the site’s quizzes, calculators, videos, checklists, and educational articles to prepare for college has doubled. The most-viewed sections are Paying for College, which explains financial aid in five steps and includes a college cost calculator and other tools; and The Path to Good Credit, which reviews why credit is important, how to get it, and how to build your credit history over time.

Wherever you are in your planning process in high school, use the Get College ReadySM  site to break down college preparation into a manageable, step-by-step list of things to do and consider.

As Walt Disney once said, “All our dreams can come true . . . if we have the courage to pursue them.” Good luck!

Calling all high school seniors College preparation tips infographic

About Gary
Korotzer leads the Wells Fargo Consumer Credit Solutions Marketing team, where he oversees marketing support for several Wells Fargo businesses, including credit card, personal lines and loans, direct auto, fee-based services, rewards, and student lending.

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Six disaster response lessons from Katrina and other storms

Wells Fargo's Janette Magana helps James and Shirlee Anthony after the 2015 Houston floods

Wells Fargo’s Janette Magana (left) assists James and Shirlee Anthony after the 2015 floods in Houston.

Shirlee and James Anthony climbed aboard the Wells Fargo Mobile Response Unit for one reason: to help get their lives back to normal after the floods in Houston.

Within an hour, Wells Fargo’s Janette Magana had helped the Anthonys get everything they needed to secure Wells Fargo’s endorsement on their insurance check so they could begin repairs of their flood-damaged home.

The Anthonys are among more than 240,000 mortgage customers we’ve helped in the past decade in the wake of disasters such as Hurricane Katrina in the Gulf Coast, Superstorm Sandy in the Northeast, tornadoes in Oklahoma, wildfires in Colorado, and, just this past May, the floods in Houston.

Our work with these homeowners ― 56,000 customers in Katrina alone ― has highlighted six things necessary for companies to do to help their employees, and communities, bounce back:

Wells Fargo's Connie Wright, Kim Smith-More and Hugh Rowden help rehab homes in New Orleans

A decade after Katrina, Home Lending’s Connie Wright (left), Kim Smith-Moore, and Hugh Rowden volunteer to help rehab homes in New Orleans.

  1. Meet people face to face. There’s nothing like personal contact — a handshake, smile, and reassuring voice — in times of crisis. In recent years, we’ve met in-person with nearly 12,000 customers at disaster scenes, helping cash insurance checks, processing claims, and finding other ways to speed recovery. We deploy trucks that act as mobile ATMs and weather/emergency information centers. We get customers access to cash for food, water, fuel, and other needs when power is out and electronic payments won’t work.
  2. Open an official help center. In the early days, we set up in reconfigured buses, converted stores, and restaurants. Today we have our Mobile Response Unit, a central help center and mobile office staffed with specially trained team members and expanded capabilities that allow us to quicklyprovide local disaster-relief services along with our banking stores and retail mortgage branches.

    Local TV broadcast near reopened bank after Katrina in 2005.

    Katrina 2005: A local TV station updates viewers about recovery efforts in Mississippi near one of our reopened banks.

  3. Communicate in every way possible. From mainstream media to social media, we’re using every means available to reach customers. Most recently, we began using texting, specialized online banking messages, and other web-based tools to get critical information to customers about disaster relief in their areas. Our online “Get Help with Disaster Recovery” resource center answers common customer questions, provides key contacts, and more. Our Home Mortgage customers can also visit the payment assistance site, call 800-678-7986, or visit a HUD-approved counselor.
  4. Volunteer and give. While we’ve fine-tuned our response efforts, we know it takes long-term assistance to help victims fully recover. That’s where volunteering can make a big impact. Earlier this summer, for example, our team members helped rehab four homes in New Orleans in a community service day tied to the 10th anniversary of Hurricane Katrina. Team members volunteered 1.74 million hours to their communities. In addition to time, it’s important to contribute financially, too. We donated more than $1.4 million to the American Red Cross in 2014, including money to support disaster relief. And since we began allowing customers to join our support of Red Cross relief efforts in 2007, they’ve donated $4.1 million at ourATMs.

    Wells Fargo mobile ATM

    Wells Fargo’s mobile ATMs feature hydraulics that lower the machines for use by any customer plus satellite and cellular connectivity.

  5. Be prepared. Just as individuals need to be prepared before disasters strike, so must companies. That means planning and fostering teamwork to prepare and respond quickly, like we do through our Enterprise Incident Management Team, the Regional Banking Incident Management group for our banking store network, and business continuity plans in our businesses. This year, we also partnered with the American Red Cross to develop a new quarterly webinar series for managers on preparing for disasters.
  6. Take care of your people so they can take care of others. A top priority in any disaster is ensuring the safety and well-being of our Wells Fargo team members. Our Employee Assistance Consulting group works to help them recover — including immediate emergency support, emotional counseling, and links to government aid and our own internal WE Care Fund emergency-aid grants for those facing severe financial hardships. We take care of our own soat the same time they can help their communities recover.

I hope we never see another Hurricane Katrina or a Moore, Oklahoma, tornado or any other disaster, but we stand ready to help when they do occur. As someone once put it, “When disaster strikes, the time to prepare has passed.” About Perry Hilzendeger is the head of Home Lending Default Servicing for Wells Fargo Home Mortgage.

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Two common social media scams and how to avoid them

Social media scamsScammers are expanding their use of social media to commit fraud through “card cracking” and “clickjacking” — two of the most common forms of social media scams.

Card cracking1

In card cracking, scammers recruit participants through social media posts to assist them in committing fraud. Here is how it works:

  1. A scammer posts an offer on social media (usually Facebook, Twitter, or Instagram) about making quick and easy money, and you respond.
  2. The scammer asks you for your debit card and PIN, or username and password, to deposit a check into your account.
  3. In exchange for the information, the scammer promises that you will be allowed to keep a portion of the money deposited.
  4. After receiving your account information, the scammer deposits a fake or stolen check and then immediately withdraws the amount of the deposited funds from your account.
  5. The scammer may go a step further and direct you to report a lost or stolen card to your bank to seek reimbursement for the “stolen funds.”

If you participate in a card cracking scam, you could lose more than just the funds in your account. It is illegal to knowingly deposit bad checks and can result in hefty fines and criminal charges. You could also find it more difficult to open a checking account or credit card in the future since your participation turns you into a co-conspirator.


In clickjacking, scammers try to trick you into clicking on a malicious link by hiding it under another hyperlink you want to click on. This can result in unknowingly downloading malware or revealing sensitive information.

For example, scammers may claim to be from a legitimate business, offering a coupon or special deal. Here is how this scam works:

  1. You click on a seemingly harmless link on social media.
  2. The link directs you to a survey page asking for personal or account information.
  3. You complete the survey, not realizing sensitive information is being shared with the scammer.

If you fall for a clickjacking scam, you may disclose sensitive information that could put you at risk for fraud or identity theft.

How to avoid being scammed on social media

  • Do not respond to online solicitations from people you do not know.
  • Never share your account information with others.
  • If you see a suspicious post, report it to the social media site. Suspicious posts may include:
    • Unrealistic promises. If it seems too good to be true, it usually is.
    • Requests for account information. Scammers usually ask for information that a bank would not request through social media.
    • A limited-time offer or urgent response required. Scammers want to motivate you to act fast so that you do not hesitate in providing the information requested.

If you notice suspicious activity or unauthorized transactions on your Wells Fargo account, or have reason to believe your account has been compromised, contact us immediately at 800-869-3557. To report a suspicious email, text, or phone call that claims to be from Wells Fargo, follow these instructions.

Card cracking and clickjacking Social Media Scams infographic

1 Source: “Card Cracking,” American Bankers Association, 2015

About Lisa
Robinson leads risk, security, and governance for Wells Fargo Virtual Channels, including mobile banking, wellsfargo.com, contact centers, and associated digital properties. Her team also manages the Fraud Information Center and provides fraud prevention tips and tools for Wells Fargo customers.

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Three tips to cope with market volatility

Trading screen showing securities and their moves in priceDuring the last few days of extreme market volatility in late August, the number of calls from participants in 401(k) plans we work with increased as much as 30 percent, many of whom are concerned about their 401(k) plans because of the recent market moves.

However, very few participants actually made changes to the investments in their plan — less than 1 percent of total assets were actually traded on the peak days of volatility. That’s encouraging because investing in a retirement plan is a long-term effort.

Times like these can serve as a good reminder about choosing investments that are appropriate for your age and risk tolerance. Follow these three tips so you’re better positioned to weather market ups and downs:

  • Don’t make hasty decisions. If you see the markets shift on any given day, you should think carefully before making changes to your asset allocation. If you do, you might lock in losses, making it difficult to achieve the type of growth needed to fund all of your retirement years.
  • Continue contributing. You may be tempted to stop or reduce your contributions when the markets shift, but that’s not necessarily a good strategy for your overall savings goals. Investing after stock prices have declined could mean that you buy more shares at lower prices. The more shares you own, the faster your account may grow when the market recovers.
  • Review and rebalance your asset allocation regularly. Do you have a strategy for allocating your investments among stocks, bonds, and stable value investments? There isn’t one right asset allocation for everybody, but it’s important to determine what’s right for you. For help determining your investment style, take the Risk Tolerance Quiz at wellsfargo.com/riskquiz.

This quick, interactive quiz will also provide sample asset allocation portfolios for you to consider. You should also consider reviewing your investments regularly to make sure they continue to reflect your intended asset allocation percentages. If one type of investment has grown out of proportion, you may want to periodically adjust your investment percentages back to your original asset allocation plan.

About Joe

Ready is the director of Institutional Retirement and Trust for Wells Fargo, overseeing the company’s employer-sponsored retirement plan business as well as institutional trust and custody services to help America’s diverse workforce prepare for a better retirement.

The Risk Tolerance Quiz is intended to provide a sample portfolio allocation based on your risk profile and does not constitute investment advice. There may be other factors specific to your situation that are not considered. Your investment risk tolerance may change over time, and you should revisit your situation from time to time to determine if a selected portfolio is still appropriate for your situation.

This information and any information provided by employees and representatives of Wells Fargo Bank, N.A. and its affiliates is intended to constitute investment education under U.S. Department of Labor guidance and does not constitute “investment advice” under the Employee Retirement Income Security Act of 1974. Neither Wells Fargo nor any of its affiliates, including employees, and representatives, may provide “investment advice” to any participant or beneficiary regarding the investment of assets in your employer-sponsored retirement plan. Please contact an investment, financial, tax, or legal advisor regarding your specific situation.

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One step from an accident leads to a Wells Fargo hit: Mobile banking

I still vividly remember when the idea that everyone was going to bank on mobile struck me. It was 2006, and I was leaving the office in San Francisco’s busy financial district, looking down at my BlackBerry. I crossed the street right in front of a moving bus. Luckily for me, the bus driver was nice enough to stop. The first thing I noticed, once I caught my breath, was that everyone was on their BlackBerrys, which are like computers in your hand. And people bank on their computers.

My next thought was, “They are going to bank on mobile.” I called my boss and explained. He gave me $5 million to figure it out, and nine months later, the first corporate mobile banking service, CEO Mobile®, was born at Wells Fargo.

I’ve been part of Wells Fargo for 28 years, and innovation has always been important. We have a history of using the most up-to-date technology to help customers succeed financially — first the stagecoach, and then the telegraph. Fast-forward to Wells Fargo being the first in the U.S. to offer internet banking. Now, we have a new Innovation Group that will speed up the process of change at Wells Fargo even more and deliver customer-inspired products and services.

A lot of new things are getting done inside our company — from products and services to business models and processes. Really good ideas are coming out of the bank’s businesses. Our Innovation Group will open the eyes of everyone around Wells Fargo to what’s going on.

This is valuable because we need more people inside Wells Fargo knowing what’s moving forward and thinking differently about their business than they did in the past two decades. We need a place where innovative ideas all across the company have a voice.

The team members in the Innovation Group are dedicated to communicating and partnering with business lines to bring more value to customers, team members, and shareholders. This team will be the catalyst to make change happen faster and will work in partnership with Wells Fargo businesses in five areas: research and development, innovation strategies, payment strategies, analytics, and design and delivery.

What’s next?

The “old” way of doing things involved our customers pulling services from Wells Fargo via their computers and cell phones. Today, we’re delivering things like video and location-based services in a new way to our customers — pushing services to them conveniently inside other mobile apps, known as APIs. It’s “banking as a service.” We’re pushing our services to customers where they want them.

Biometrics, which uses unique human characteristics such as fingerprints and retina scans, is a relevant example of work we’ve already done this way. We’ve been looking at proof of concepts for years. Then prototyping. And now, taking it mainstream.

Silicon Valley is in close proximity to our headquarters in San Francisco, and many startups are eager to pitch their ideas to Wells Fargo. We are looking at things coming out in the real world that will provide more value to customers.

I would love for our customers to talk about the things they would like to see in the future. Leave a comment below and let me know: What would you like us to pursue?

Want to know more?

Read more in an interview Ellis conducted with the Charlotte Business Journal.

About Steve

Ellis is head of the Innovation Group at Wells Fargo. A 28-year veteran of the company, he spearheaded the efforts that resulted in Wells Fargo establishing the industry’s first online banking platform for commercial customers.

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Why new EMV chip cards make sense for businesses

Platinum Wells Fargo debit card featuring EMV chip card technology

One of Wells Fargo’s new and replacement debit, ATM, and prepaid cards which feature new designs and EMV chip card technology.

The cost of card fraud in the U.S. is estimated at $8.6 billion per year. But help is on the way in the form of new EMV chip cards coming to the places where you buy gas, groceries, movie tickets, and many other products and services.

According to Payments Leader, an online industry publication, about 40 percent of the world’s credit and debit cards have the chips and 70 percent of the machines outside the U.S. can read them.1

Now the technology is developing and gaining attention in the U.S. because of the “liability shift” taking place Oct. 1. That’s when merchants will become liable for any fraudulent transactions if they don’t support EMV. Before that date, banks and card issuers are liable.

What is EMV technology?

Called EMV (after developers Europay, MasterCard and Visa), chip card technology helps consumers and merchants fight fraud by encoding cardholder information within an encrypted microchip that changes data with each transaction to make it more difficult to counterfeit than traditional magnetic swipe cards.

Most card issuers also may require a PIN or a signature for additional cardholder authorization, further increasing transaction security. In countries that have already migrated to the technology, point-of-sale fraud has been reduced by as much as 84 percent, according to studies by Visa and EMVCo.

Awareness gap

Most small business owners aren’t aware of the shift, according to the latest findings in our Q3 Wells Fargo/Gallup Small Business Index Survey of 600 small business owners. According to the results:

  • Less than half of business owners who accept point-of-sale card payments are aware of the liability shift.
  • Among business owners who intend to add EMV chip card-enabled machines, 29 percent plan to upgrade before October, and 34 percent plan to upgrade soon afterward.
  • Almost a quarter (21 percent) say they never plan to upgrade.
  • Business owners were split equally on whether they thought the technology will reduce fraud.

EMV’s upside

When you consider that one out of every three businesses accepts point-of-sale card payments, and understand the competing priorities that face typical business owners every day, it’s not surprising to see the low awareness.

However, at Wells Fargo, we want to make sure more business owners are aware and understand the benefits of transitioning to EMV chip card technology. Our Wells Fargo Merchant Services business ranks these among the advantages of switching to a point-of-sale payment system that accepts chip cards:

  • Reduced risk of fraud. Upgrading to EMV-enabled systems may prevent businesses from becoming a target, as card fraudsters likely will concentrate on merchants that haven’t upgraded.
  • Fewer financial risks. Merchants that don’t accept EMV chip cards when presented may be liable for any resulting fraud and related costs.
  • More methods of payment. Most EMV equipment can accept contactless payments, enabling merchants to provide additional forms of convenient payment to its customers, including payments made with a smartphone.

We’re also encouraging business owners to talk with their merchant services providers to determine what steps they need to take before Oct. 1 to reduce the risk of card fraud and related costs.

Still have questions about chip cards? Check out WellsFargoWorks.com for tips on the process and benefits of accepting EMV chip card payments and the importance of EMV chip cards and reducing fraud.

Will Retailers be Ready for EMV by Oct 2015? (Payments Leader)

Small business owners unprepared to accept EMV chip cards infographic. Alt: Small business owners unprepared to accept EMV chip cards infographic from Wells Fargo

About Doug

Case is Wells Fargo’s Small Business Segment manager responsible for the strategic direction of Wells Fargo’s focus on small business, which includes the Wells Fargo Works for Small Business initiative, and the online resource, WellsFargoWorks.com. Today, Wells Fargo serves nearly 3 million small business customers across the United States and loans more money to America’s small businesses than any other bank (2002-2013 CRA government data).

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College tuition sticker shock and the value of higher education

Father helps son unload items for his dorm room at collegeFor many, the end of summer signals the time when parents, families, and loved ones bid farewell to a teen who is taking the first steps onto a college campus.

As the leader of Wells Fargo’s Personal Lending Group, which includes Education Financial Services business, I’ve always associated higher learning with societal progress, opportunity, and hope for a better life. Yet in the homes of college-bound teens, more conversations are focusing on college tuition “sticker shock” when families calculate college expenses.

The national discussion about the $1.2 trillion (and growing!) in student debt gets louder each year. With no end in sight for rising college costs, it begs the question, “Is higher education still a symbol of opportunity, given the expense of a college degree?”

Spiraling costs

State funding to support public colleges has been falling for some time, and students and families are making up the shortfall. During the 2014–15 academic year, using current dollars for comparison, the average annual cost of tuition and fees at a public, four-year university was $9,139. That’s up from $428 in the early 1970s. At private, nonprofit four-year universities, tuition and fees went from $1,832 to $31,321 during the same period.

If tuition costs continue to increase faster than the rate of inflation, we’ll see students with no other choice than to take on more debt. Already, student loan debt increased from $15,000 to $27,000 between 2004 and 2014, according to research from The College Board.

Changing enrollment

Given the cost of college, more parents than ever are asking, “Is a four-year college best?” Consequently, more teens are enrolling in community colleges or professional schools after high school. A report from the National Student Clearinghouse Research Center showed that 46 percent of students who completed a four-year college degree had been enrolled at a two-year institution at some point over the previous 10 years.

Our response

How students are paying for higher education is also changing. Falling interest rates are contributing to an increase in the refinancing of student debt, allowing for the combining of multiple student loans into one monthly payment at a lower cost. The private student loan marketplace has been quick to respond with more financial product offerings and promotions to drive down the cost of college.

This includes Wells Fargo’s Get College Ready program, which offers interest rate discounts on new and refinanced private student loans on top of other rate discounts available to customers. We also are offering a newly designed, interactive website that helps students plan and prepare for college.

Of course, it’s nearly impossible to estimate what college will cost decades from now. So we’re also committed to investing even more in financial education resources to help families plan and prepare. For example, in addition to Get College Ready, our current resources include the CollegeSTEPS emagazine, the Student LoanDownSM blog, and an army of team members who volunteer their time each year to conduct college planning workshops at high schools.

Still worth the cost

Despite balancing the rising cost of college, low interest rates, and a changing student loan marketplace, is college still worth it?

I believe the answer is yes. Statistics continue to show that the benefits of earning a college diploma outweigh the investment. An adult with a bachelor’s degree will earn on average $56,700 ($27.26 per hour) annually, or $2.3 million over a lifetime. Bachelor’s degree holders also typically earn 31 percent more than workers with an associate’s degree and 74 percent more than those with a high school education.

Want to know more?

Listen to a Wells Fargo-recorded podcast of a media briefing about rising college tuition, financial aid, and the way forward featuring Rasmussen, Wells Fargo Senior Economist Eugenio Aleman (author of the report, “A Demographic Look at Student Loans”), and Johnny Taylor Jr., president and CEO of the Thurgood Marshall College Fund:


Wells Fargo What College Costs infographic

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Homeownership survey says: Dream alive, but misconceptions remain

A lot has changed since I started my career in the mortgage industry more than 25 years ago. But owning a home remains a vital part of the American dream and of the strength of our communities, economy, and nation.

Those sentiments were confirmed again by our second annual Wells Fargo Homeownership Survey,* which found that most Americans agree now is a good time to buy a home. That’s the good news.

The not-so-good? Misconceptions remain that are holding many potential buyers back, including the two biggest obstacles:

  • The mistaken belief that credit scores alone determine eligibility for a home loan.
  • The mistaken belief that buyers need at least a 20 percent down payment.

These persist despite efforts by lenders and the government to make credit for mortgages more available and to introduce low down payment programs. We believe these misconceptions can be overcome with a better understanding of how credit works.

Beyond the credit score

Percentage of home buyers who think a 20 percent down payment is required infographicCreditworthiness is not determined based on a single factor, so it’s important for potential homebuyers to investigate home financing options before excluding themselves based on credit scores alone. A good lender will use a borrower’s entire financial picture, not just credit score, when deciding whether to lend.

In addition, many borrowers overestimate what is truly a “good credit score” and think it should be above 780. In reality, while there are multiple credit score models and investor guidelines, a score higher than 780 is generally considered “excellent,” and more than 660 is generally considered “good.”

The legend of the 20 percent down payment

Surprisingly, many people still believe a 20 percent down payment is required to get a home. The fact is, there are other options that some borrowers may be eligible for, including programs with down payments as low as 3 percent.

The important thing here is to do your homework. Have a good understanding of what you can afford and find a lender that will look at your full financial picture and help you understand the options available to you.

 Home buyers want online convenience and personal guidance infographicHigh tech with a human touch

One other interesting finding in this year’s survey was that consumers are increasingly looking for digital options. Many potential homebuyers prefer doing online research before they talk to a mortgage lender or a bank, or even before consulting family or friends.

But, when they are ready to apply, most consumers want high-tech tools and a human touch. That makes it even more important to choose a lender that can provide the convenience of online tools like yourLoan TrackerSM, as well as personal guidance from local professionals, like Wells Fargo’s 7,500-plus home mortgage consultants.

Of course, these are only starting points. More than anything, it’s important for consumers to educate themselves so they can make informed choices.

I’m personally inspired by what consumers told us in the survey. It tells us that homeownership is a vital part of the American dream, and it gives us insight into how we can help customers achieve financial success. It also reinforces that, while the housing industry has changed, the importance of homeownership in America has not.

Have a story about your personal journey to homeownership? Use the “Leave a comment” feature below to share your ideas.

About Franklin
Codel is the head of Mortgage Production for Wells Fargo Home Lending, which includes sales, operations, quality, compliance, underwriting, and support for Wells Fargo’s Retail and Correspondent Mortgage lending businesses.

*National survey of 2,016 respondents conducted online between April 8–15, 2015, for Wells Fargo. The sample includes 1,924 respondents who either own or rent a home. 

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Five steps toward declaring financial independence

I'm declaring financial independence photo of woman managing money onlineEvery Fourth of July I look forward to two things: celebrating the holiday with friends and family (around our house, we like a good barbecue), and appreciating the freedoms we enjoy every day. As we think about Independence Day and our freedoms, let’s not forget the importance of understanding how to work toward our own financial independence.

Independence Day reminds us that we have the freedom to pursue any goals we set our minds to — that’s the American Dream. For many, part of that dream is achieving financial independence and success. Many of us have mortgage, car, and tuition payments that we make every month and — sometimes — the idea of managing debt can seem challenging.

While it can be overwhelming, here are some small steps you can take today to make managing your debt easier and move closer to financial independence:

  1. Monitor your credit regularly: Make sure your credit report contains current and accurate information. If you find errors, correct them as soon as possible because they may negatively impact your credit score and even indicate possible identity theft. You can request a free copy of your credit report from each of three major credit reporting agencies — Equifax®, Experian®, and TransUnion® — once each year at AnnualCreditReport.com or call toll-free 877-322-8228.
  2. Pay more than the minimum payment due: Paying more than what’s due, or paying every two weeks, instead of the minimum balance once a month, can help you to pay down debt faster and may also improve your credit score.
  3. Know your limits: Being close to or maxing out your credit limits may negatively impact your credit score. It’s a good idea to keep your balance on revolving lines under 30 percent of your credit limit. Generally, the lower your balances, the better your credit score.
  4. Take on new debt only when needed: Apply for or open new credit accounts only if you need them. Having too many accounts can lower your credit score and may become difficult to manage.
  5. Always pay on time: Payment history makes up 35 percent of your credit score. If you have missed a payment, pay as soon as possible — it makes a difference. Credit reports will track if you are 30, 60, or 90 days late on payments.

Because more than half of Americans want to learn more about credit, according to a 2014 Wells Fargo survey, we recently enhanced the “Borrowing and Credit” section of wellsfargo.com. With the redesign, we made that section (one of the most popular links from our home page) mobile-friendly. That means when consumers come to us using a smartphone or tablet, it will be easier for them to find the information that can help them make responsible, informed decisions about borrowing and credit.

The redesign also includes a refreshed Smarter Credit™ Center where consumers can find tips and guidance to help them establish, improve, or rebuild their credit and stay on track with debt.

As I mentioned before, managing debt can be challenging, but if we’re committed to pursuing it, it can yield incredible results. Said James Truslow Adams, who coined the “American Dream” phrase: “The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”

For more information about credit and how to manage it, visit the new Smarter Credit Center at www.wellsfargo.com/smarter_credit.

About Gary
Korotzer leads the Wells Fargo Consumer Credit Solutions Marketing team, where he oversees marketing support for several Wells Fargo businesses, including credit card, personal lines and loans, direct auto, fee-based services, rewards, and student lending.

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