The Big Credit Score Myth

Common sense tells us that paying our credit card down to zero each month will boost our score…but, that may not be the case.

Get to Know Your “Utilization”
This is certainly a great habit to get into. But what’s more important is the amount owed…this is often referred to as utilization or how much of available credit is still available. Quite simply, if you have a $1,000 credit limit and your statement shows an outstanding balance of $500, you have 50% utilization. It is best to keep utilization below 25%. Maxing out credit is seen as a negative on your credit report and accounts for 30% of your credit score.

Pay attention to what is reported on your statement and if it is higher than what you would like consider making additional payments prior to your lenders billing cycle.  

What Does Your Credit Report Look Like?

Take a few minutes to get a free copy of your credit report by visiting

How Long Do You Keep Your Tax Records?

Getting audited is not a walk through the park. But, it happens to the best of us even when we feel like we have dotted every “i” and crossed every “t.”

It’s important to be prepared and that’s why one of the most common questions I hear is “How long should I hold on to my prior year tax returns?” The good news is that the IRS has a statute of limitations on when they can take action.

IRS Statue of Limitations From Date of Filing
Auditing a Return – 3 Years
Unreported Income – 6 Years

Keep it for 7 Years
A good rule of thumb is to hold on to your tax returns for at least seven years. If you have records connected to assets, such as the purchase of property or other investments you’ll want to hold on to those records until the statute of limitation expires for the year in which you dispose of the asset.  If you are in doubt, check with your tax preparer.

More Tax Questions?
The IRS has a user-friendly site of frequently asked questions. Visit it here

Will Your Home Pass an Energy Audit?

An energy-efficient home can benefit your wallet and the planet now and for generations to come.

What should you look for?

Does your home often feel cold in the winter or are your utility bills higher than you think they should be?  If so, the summer months are the perfect time for you to perform a home energy audit on your home. Sealing and insulating the "envelope" or "shell" of your home is often the most cost effective way to improve energy efficiency and comfort. This includes the outer walls, ceiling, windows, doors and floors.

If you are looking for someone who can perform the energy audit for you start by asking your local utility if they do audits. If the utility does not offer this service, they may be able to recommend private companies specializing in residential energy audits.

What are the benefits you could wreak from having an energy-efficient home?

  • Lower utility bills
  • Better health
  • Less maintenance and repair
  • Environmental benefits
  • Increased market value
  • Greater comfort

If this is something that you feel you can tackle on your own, visit for tips on conducting your own audit and making the recommended repairs.

Saving on Auto Insurance

It would be nice to have our home, work, grocery store, and kids’ school all within walking distance, but that’s not a reality for many of us. Driving is a necessity for many Americans and so is having a car and auto insurance. Auto insurance can be a large expense so it’s important to check periodically about reducing your rate.

Here are a few ideas that could help lower your premium.

1. Some auto insurance companies offer a discount if you pay your premium in full upfront instead of paying monthly installments. Check to see if your insurance company offers this
2. Consider a higher deductible.  Moving to a $1,000 deductible can make a big difference, but make sure you have the savings to cover the higher deductible.
3. For older cars, make sure it still makes sense to carry comprehensive and collision coverage, especially if you have a teenage driver.
4. Improve your credit score.  Many insurance companies take it into consideration.
5. And lastly, don’t be afraid to periodically shop around. It’s easy to do online. Your situation changes from time to time, so you want to make sure that you are getting the best rate possible

BECU offers several informative articles that are auto related in the Education and Resources section of

Tips to Obtaining Your Goals

It’s that time of year where many of us start slacking on our New Year’s resolution—gym attendance starts going down and we start to forget why we made that resolution in the first place. Did you make a new year’s resolution to get out of debt or to reach some other financial goal? Don’t let your resolution be one of the 90% that fail every year.

4 Tips to Help You Reach Your Goals
1. Make sure the goal is realistic and specific enough for you to measure your progress. For instance, getting out of debt is not specific; however, paying an additional $100 to your credit card every month so it will be paid in full by the end of the year is specific.

2. Tell a family member or friend who will hold you accountable. It’s easier to stay on track when we have to answer to someone else. Even better—make sure it is someone with great financial fitness themselves so you’ll have someone to emulate.

3. Plan to celebrate your success.  Maybe it’s a dinner out when you achieve your goal. You need something to look forward to; just make sure it’s an affordable celebration.

4. And, most important of all WRITE IT DOWN. Keep a copy of your goal on your refrigerator or anywhere that you will be constantly reminded of what you want to accomplish.    

Pay for College with a 529 Plan

According to a 2011 report from The College Board® the average tuition and fees for a public in-state university for four years is $33,300 and in 18 years that cost is projected to rise to $95,000. If you have young children or you are thinking about having children, now is the time to start thinking about how you and your child will cover these expenses when they are ready for higher learning.

In the U.S. student loan debt outstanding now exceeds that of credit cards and auto loans.  To help ensure that your child or grandchild is not burdened with excessive student loan debt, consider opening a 529 college savings plan.  

What is a 529 Savings Plan?
A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.
There are plenty of misconceptions so let’s address a few of them.
  1. You are not limited to 4-year undergraduate colleges; rather, trade, vocational, graduate schools and community colleges are all possibilities.
  2. It is not a use it or lose it proposition.  You can use the money for your own education or pass it on to another beneficiary.  Worst case, if you withdraw the money for non- qualified expenses you would pay income taxes and a 10% penalty on the earnings.
  3. As the 529 plan is considered your asset and not your child’s, it will only have a minor impact if any, on financial aid.
Learn more at 

Paying for Your Big Purchases

If you own a home, you know that expenses can add up—especially when it comes to making big purchases such as a new roof, furnace or kitchen appliances.

Be Frugal, But Not Cheap
A common mistake many of us make is shopping for price alone and looking for the cheapest item. When you shop frugally, you are getting more for your money. But, when you shop cheaply, you are most likely buying something that will wear out easily and need to be replaced sooner.

Plan Before the Failure
A roof that has already started to leak will not only damage your home but you will also feel preasured to go with the first contractor you speak with which may or may not be the best option. Plan ahead for your major purchases and consider replacing them when they are at the end of their useful life but before they fail. Not only will you dodge a bad experience but you will also be afforded the time to research the products and contractors to ensure you are getting the best value. 

Work in Numbers
For purchases such as a new roof, see if you have other neighbors who also may be interested. If you get together many contractors may consider offering you additional discounts. 

Phishing, Vishing and Smishing, Oh My!

Phishing, Vishing and Smishing have proven to be an extremely profitable business for criminals. We can expect criminal organizations to more frequently adopt these techniques, and expect to see further evolution of each threat.

What is Phishing?
Email and Internet fraud is known as Phishing— this is because the criminal perpetrators put out "bait" in the form of electronic messages to see who will bite.

What is Vishing
The term Vishing is derived from a combination of “voice” and “phishing.” The fraudster uses a fraudulent or untraceable phone number to trick the victim into giving up personal information.

What is Smishing?
A fraudulent message sent via an SMS text on your cell phone.

Phishing, Vishing and Smishing have proven to be an extremely profitable business for criminals. We can expect criminal organizations to more frequently adopt these techniques, and expect to see further evolution of each threat.

Vishing will become an increasingly popular attack for phishers because of its ability to reach beyond the computer screen and target a broader range of potential victims and because it is a more effective platform for launching social engineering attacks. The historical trust that consumers have placed in telephone services—the assumption that the phone number calling the consumer can be traced—will be fully leveraged by phishers for maximum profit gain.

8 Things You Can Do To Help Protect Yourself

  1. If anyone or any email asks you for your personal information, do not give it. Always call the phone number on the back of your debit or credit card to validate the request.
  2. Keep your anti-virus software up to date. Anti-virus software is no longer an option, it's a necessity.
  3. If you have online banking, make sure you check it at least every couple of days. Financial fraud can happen fast.
  4. If you use your bank's free bill pay, keep watch for fraudulent activity.
  5. Only buy from trusted online stores. If you cannot confirm that the store is legitimate, do not buy from it.
  6. Always look for a company phone number and address and do not be afraid to call it to make sure it is real.
  7. Keep your passwords stored in a safe location and do not let your browser or Windows remember your password for you.
  8. Clean up your computer often to ensure that your personal information is not lurking in your Internet browser's history files.

Free Shredding Event
BECU is hosting a free shredding and electronic recycling event on Saturday, April 16 at BECU locations in Everett, Tukwila and Federal Way. Get more information at


Retirement: Gearing Up for a New Beginning

Those of us who are getting ready to wrap up their careers and leave the working world often refer to retirement as "a new chapter" or "the next act" in our lives. If you are a pre-retiree, you may have even used those analogies yourself. But do you also realize that it's possible to play a leading role in determining how your retirement story will unfold?


An Outline for Success

You can start by plotting out exactly which options, resources and strategies you'll need to take advantage of in the near future. For example, ask yourself the following questions:

When exactly will I retire?

Have you pinpointed your target retirement age yet? Even a couple of years can make a big difference in your personal savings and the amount of Social Security income you'll receive. For example, depending on your year of birth, you may not be eligible for full Social Security benefits until age 67. What's more, delaying Social Security benefits beyond that age may actually earn you "delayed retirement credits."

Which accounts will I use and when?

These days, it's not uncommon for pre-retirees to hold retirement assets in several different types of accounts, such as employer-sponsored plans, IRAs, annuities and regular investment accounts. Therefore, you'll probably need to think about which accounts to tap first. Generally speaking, the longer your money can potentially compound in tax-advantaged accounts, the more you may be able to accumulate for retirement overall.

How much will I need to withdraw?

There is no rule of thumb - such as withdrawing 5% of your balance annually - that fits everyone. Instead, you need to identify your specific cost of living requirements and plan accordingly. But consider this: If you were to withdraw 4% of a $500,000 nest egg each year, it would take more than 40 years to deplete the account (assuming 3% inflation and 6% investment returns annually). But by withdrawing 8% each year, you'd deplete the account in only about 17 years.

So What's the Conclusion?

If you're among the millions of pre-retirees getting ready to turn the page to a new stage of life, the next step is to recalculate your retirement savings goal in order to confirm that you'll be able to address the priorities discussed above. After all, the planning you do now can have an enormous impact on your financial ability to live in financial security for the rest of your life.

For more information on your retirement options, visit BECU Investment Services at



Simplify Your Banking in the New Year

The start of a New Year is a great opportunity to set fresh goals in every area of your life, including your finances. In the same way as you can take steps to be more physically fit, why not begin 2013 with the goal of improving your financial well-being?

As everyone is making resolutions, it’s important to remember that January is also Financial Wellness Month. This is a good time to commit to year-long financial wellness.

Below are a few tips to help you simplify your banking in the New Year:  

Do you have multiple bank accounts? The more accounts you have, the harder it is to keep everything organized and the more likely you are to make costly mistakes.  

If you find yourself moving money from one account to another, or missing payments because there are so many accounts to track, it's time to simplify your banking.  

When was the last time that you looked into all of the services that your financial institution offers you to access your accounts or to conduct your banking? You now may be able to deposit a check using your smart phone set up account alerts or have access to surcharge ATMs that you did not know existed.  

To find out about remote banking services at BECU, visit

Save on Your Car’s Gas Bill

With gas prices consistently over $4.00 a gallon these days, we are all feeling the pain at the pump but what can you do about it?  Taking mass transit, carpooling, or telecommuting are going to give you the biggest savings but having a well-maintained car and how you drive are also important.

Here are a few helpful tips that the U.S. Department of Energy recommend to help you drive more efficiently and save more at the pump.

Drive Sensibly
Aggressive driving such as speeding, rapid acceleration and braking will waste gas.

Observe the Speed Limit
While each vehicle reaches its optimal fuel economy at a different speed (or range of speeds), gas mileage usually decreases rapidly at speeds above 60 mph.

Remove Excess Weight
Avoid keeping unnecessary items in your vehicle, especially heavy ones. An extra 100 pounds in your vehicle could reduce your MPG by up to 2 percent.

Avoid Excessive Idling
Idling can use a quarter to a half gallon of fuel per hour, depending on engine size and air conditioner use.

Use Cruise Control
Using cruise control on the highway helps you maintain a constant speed and, in most cases, will save gas.

Keep Tires Properly Inflated
When checking your tire pressure it is best to do it when the tires are cold to ensure you get the most accurate reading.

Have You Checked Your Social Security Statement?

Social Security benefits are something many of us will rely on for income in our retirement years. It is important to make sure you know exactly where you stand before you reach retirement years and it’s too late. 

The Social Security Administration is only mailing annual paper statements to those who are 60 or older so you may not be getting a statement. The good news is that you can now access your Social Security Statement online. It only takes a few minutes to create an account and you have access anytime.

Get Started—visit to create your account today!
As your future benefit is based upon your earnings, checking the accuracy of your statement is important as it’s much easier to fix problems now than to try and get the full amount of the benefits you are owed once retirements hits.
Will you be covered in retirement?
Now that you have access to your statement, take a close look at your estimated benefit. Will this along with your other investments be enough to reach your goals?  Will you have enough income in retirement to live comfortably? If not, it’s important to put a plan in place to fill the gap. For retirement options available to you, visit

Enticed by Credit Card Rewards Programs?

If you are like me, you’ve stopped carrying a checkbook altogether. Many of us rely heavily on our credit cards for everyday purchases and for paying bills. 

Given this uptick in credit card use, rewards credit cards are a great way to profit from your expenses. These programs offer convenience and benefits, along with the opportunity to capitalize on free flights, hotels, dining and more.

We are continuously presented with offers for debit or credit cards that promise cash back or other enticing rewards. What may seem like a great deal on the surface could actually end up costing you a lot more in the long run.

Make sure you really understand all the details.
For example, for a debit card, will you pay fees to have the checking account? Are their minimum balance requirements or hidden fees?

For a credit card, make sure the interest you pay isn’t more than cash back reward. Even if you don’t carry a balance on your credit card, be sure to compare what the award will actually get you. And, make sure to look for limitations such as the redemption rates, expiration of the points, and any annual fees.

Here’s an important rule of thumb when choosing a credit card rewards program: Rewards programs can be a great benefit if the reward is something you can truly use and it doesn’t cost you more in fees and hassle in the long run.

BECU offers several free seminars and informative articles on credit and debt. Visit for more information.

Paying for College vs. Paying for Retirement

Since the economy has been so uncertain over the past few years, many parents have had to make tough decisions when it comes to paying for the kids’ college expenses.  Many parents have found it very tempting to tap into their retirement accounts or reduce future retirement contributions to help pay for college. Doing so puts retirement savings at risk. And, it’s important to think about who is going to help you out in retirement?

Put Your Oxygen Mask on Before Helping Others
This phrase is very common in the aviation industry and is a great way to think of how you should use your retirement dollars. You will have financial needs in retirement and you most likely will not be able to work to earn more income once you are retired. So, it’s important to make sure you earn your living now. This does not mean that you shouldn’t help your kids once they are of college age if you have the financial means. Remember, they will still need your advice and guidance too.

Have you done a wallet audit?

We all hear the distressing stories of identity theft. Fraudsters are getting cleverer but there are some simple things that you can do to help protect yourself.

What fraud-friendly information are you carrying in your wallet?

One of the most important things that you can do to protect your finances and your identity is to audit your wallet. Here are some key tips to help you keep your personal information safe and out of the hands of fraudsters:

  • If you have your social security card or number in your wallet, remove it immediately. It is just the ticket for identity thieves.
  • Make a list of all the items in your wallet. For debit and credit cards don’t include card numbers, rather just the name and phone number of the financial institution. If you have automatic payments associated with a card make a note of that as well. 
  • Keep the list in a safe place at home. If your wallet or purse gets lost or stolen you now have a list of everything that you need to cancel and replace what was lost.
  • Don’t wait to cancel your lost or stolen card—most financial institutions have a 24-hour phone number just for reporting a lost or stolen card. You definitely want to do this before the fraudsters wipe out your accounts.

Prevent, Detect and Restore

BECU members have access to reliable identity theft services and resources. To learn more, visit and select Security and Fraud.