Do I Need A Credit Card To Build My Credit?

Eventually, the need for credit is inevitable for most of us. When the time comes to buy a car or a home, to rent an apartment, to set up new utility accounts, to obtain a cell phone, or perform one of many other everyday financial transactions, a healthy credit file is the tool with which we can avoid expensive terms, or worse, application rejection.

Luckily, only a small portion of your credit score is based on having and using revolving credit products (credit cards). Your FICO score is based on the following:

  • Payment history (35%)
  • Amount owed (30%)
  • Account age (15%)
  • New accounts / inquiries (10%)
  • Credit mix (10%)

The VantageScore, another consumer credit rating system, uses similar criteria, in a slightly different formula developed by three credit reporting agencies (Equifax, TransUnion and Experian).

Clearly, the most important factors are establishing a history of on-time payments to all creditors and keeping debt low in relation to the amount of credit available to you (known as the credit utilization ratio). Consumers who cant – or dont want to – obtain a credit card can build credit in other ways.

Building Credit Without Credit Cards

You can take several steps toward a healthy credit file without the use of credit cards.

1. Keep paying old bills

That old student loan may feel like an albatross around the neck, but years of on-time payments and the age of the account will boost your score. An account in good standing factors into your score until ten years after it’s paid off and closed, so don’t miss payments or pay late.

Pay off collection accounts, too, since the newest version of the FICO score ignores paid collections (but seriously dings your score for unpaid collections).

2. Report your rent

For consumers with subprime or unscoreable credit, reporting rental payments is a very smart move. An Experian study found that for consumers with “thin” credit files (not enough data upon which to base a score), adding rental history made them scoreable. Many jumped straight to the prime credit category. Furthermore, consumers who already had credit scores saw their scores rise by an average of 29 points. (See Use Paying Rent To Boost Your Credit Score.)

Here’s why. A large portion of the consumer credit score is based on payment history and account age. Consumers who regularly make on-time mortgage payments score both types of points. But in this context, consumers who rent responsibly have historically been at a disadvantage. While evictions and collections can do plenty of damage, until recently a responsible rental history provided little or no credit benefit.

Some to benefit from hydro bill changes

The provincial government announced on Thursday that it will cut fees on residential hydro bills and enact new supports for low-income Ontarians.

But the plan to eliminate the debt retirement charge probably wont make much difference for customers.

Thats because Ontarios Clean Energy Benefit which saves customers an average $17 each month will be disappearing at the same time.

Eliminating debt retirement charges in 2016 will only save residential customers about $5 each month.

The fee was introduced in 1998, a way to pay debt left behind by Ontario Hydro.

The idea was that we all contributed to the debt over time by not paying enough, and therefore we should all pay it down, said Jay Heaman, manager of operations at Woodstock Hydro.

Low-income Ontarians will also be able to tap into more savings through the Ontario Electrical Support Program beginning in 2016.

Depending on household income, credits between $20 and $50 would be applied to monthly bills. Families with a total income of less than $50,000 would be eligible to apply for the program.

There are a number of families in Woodstock that need funding supports, said Jennifer Schafrick, emergency housing advocate at the Woodstock Salvation Army.

For many people in the region, paying hydro bills is a loaded decision. The stereotypical heat or eat is not just a cliche – its a reality.

Especially when winter comes, if theyre electric heat, Schafrick added.

The Salvation Army receives money from Woodstock Hydro to subsidize hydro costs for those in need.

Grants are paid to those who qualify in one lump sum.

Last year, that money ran out in July.

Since February, Schafrick has provided grants to 23 families.

The new Charge Up for United Way program, which raises donations from electric vehicle owners charging their cars at the Woodstock Hydro station, is another fund Schafrick can use to assist local families this year.

The money raised in that campaign is also matched by Woodstock Hydro.

She hasnt dipped into it yet.

Under the Ontario Electrical Support Program, customers would apply to receive monthly credits.

The new program, announced by Energy Minister Bob Chiarelli Thursday morning, has come under fire by critics who say the government is ignoring middle class customers facing mounting hydro bills.

But theres one surefire way for families in any income bracket to save money, Heaman said.

Lets face it, we cant do a whole lot about government policy. They want to add a tax, theyll add a tax. They want to replacement debt retirement with some other charge, theyll do it. The only real ammunition that a customer has is to reduce consumption, he said.

That means closely monitoring power usage and looking for opportunities to save. Access to online Smart Meter data makes this very convenient for Woodstock residents, Heaman said.

The only real answer is to actually roll up our sleeves and work with low-income customers and help them learn to use the Smart Meter and learn how to manage their consumption.

Lochaber hydro shares offer pulls in £753k

A LOCHABER community has generated over pound;750,000 from selling shares in its local hydro-electric scheme.

And the huge popularity of the Sunart Community Renewables shares offer means the run of river hydro project is now able to go ahead with just a small top up loan from two social enterprise lenders.

The share offer was launched in October 2014 and the initial target of pound;284,000 – a third of the total cost of building the community hydro-electric scheme – was smashed early in 2015.

Money continued to pour in before the deadline of March 15 and this week Sunart Community Renewables revealed the total sum raised is pound;753,300.

The community company said 270 individual or corporate investors bought the shares which ranged from pound;300 to pound;100,000.

The majority of investors are local to Lochaber or have a long-term association with the Sunart area. But investment money has also flooded in from across the UK.

The remainder of the funding required will be loaned to Sunart Community Renewables by the RBS Social and Community Capital Fund and the Scottish Investment Banks Renewable Energy Investment Fund.

Now that the share offer has closed, work is expected to begin on site in the next two weeks and it is aimed to have the 100KW scheme fully operational by November this year.

The hydro project will make use of a disused dam purchased by the community from Scottish Water and will harness the untapped energy source of the Allt nan Cailleach which runs through Scotstown, Strontian.

It is expected to generate over 420,000KWh of electricity each year, which will be sold to the national grid. All surpluses will be donated to a local community benefit fund.

The community expects to receive around pound;15,000 a year for the first 13 years.

This figure will then rise to around pound;90,000 a year for the next seven years, while the Governments Feed-in-Tariff is still available.

Sunart Community Renewables said it has been amazed by the success of the shares venture.

Richard Laybourne, the groups chairman, said: We are overwhelmed by the interest our project has received and want to thank everyone who has supported us by buying community shares.

The final total exceeded our wildest expectations and it means we can not only start construction of the hydro but it will be able to give more money to the local community because we have not had to rely on large loans.

Sunarts community share offer was the first of its kind in Lochaber and was supported by Community Shares Scotland.

Fundbox Secures $40MM Series B Financing, New Credit Facility

Fundbox, leading cash flow optimization tool for small businesses, announced today that it has raised $40 million in Series B financing led by General Catalyst Partners. Existing Fundbox investors Khosla Ventures, Shlomo Kramer, Blumberg Capital and others along with new investor NyCa Investment Partners also participated in the round. The company also announced a new credit facility in partnership with Silicon Valley Bank and other institutions.

Fundboxs growth has surged over the past 18 months, surpassing 300% in quarter over quarter growth. The financing will enable the company to further accelerate its rapid expansion, innovation and product development, as well as increase its marketing efforts to reach small businesses.

This investment provides Fundbox with greater capacity and resources to bring data science backed financing solutions to small business owners in the US, said Eyal Shinar, chief executive officer, Fundbox. Our vision transcends just cash flow solutions, as our proprietary data-driven engines can fundamentally transform and modernize the entire small business economy and B2B transactions.

According to a US Bank study, 82 percent of business failures are due to poor cash management. Fundboxs innovative capital on demand approach is a transformative solution to fix that pain point. The Fundbox tool is embedded directly into the workflow of a business, through existing accounting, e-invoicing and payroll software, delivering one-click financing of outstanding invoices.

Tens of thousands of businesses have connected to the Fundbox platform to eliminate cash flow gaps by instantly clearing invoices. Fundbox is advancing thousands of invoices weekly, offering small business owners the ability to optimize their cash flow by advancing payments for unpaid invoices. This effectively eliminates the net 30, 60, 90-day problem from which so many small businesses suffer.

Hemant Taneja and Adam Valkin co-led the investment from General Catalyst and Hemant has joined the companys Board of Directors. General Catalyst has a deep focus on investing in technology companies that empower small businesses including Stripe, ZenPayroll, and Bigcommerce.

Fundbox leverages deep data analytics to accelerate cash flow and clear invoices for small business. The Fundbox risk engine taps into numerous data signals within its network to assess customers and invoices for risk automatically and instantly, allowing small businesses to choose which invoices to clear with a single click. Technology and finance industry veterans Eyal Shinar, Yuval Ariav and Tomer Michaeli founded Fundbox in 2012. Leading Silicon Valley entrepreneurs, finance veterans, and venture capitalists, including Khosla Ventures, SV Angel, and former CitiGroup CEO Vikram Pandit, back the company.

General Catalyst Partners is a venture capital firm that makes early-stage and growth equity investments. The firm backs exceptional entrepreneurs who are building innovative technology companies that transform industries, including Airbnb, Bigcommerce, ClassPass, Datalogix, Datto, Demandware, The Honest Company, HubSpot, KAYAK, Oscar, Snapchat, Stripe, and Warby Parker.

Advocate said President Obama’s speech could positively impact predatory …

Predatory lending reform was a topic President Barack Obama spoke of quite a bit during his speech in Birmingham on Thursday. But could those comments make a difference in changing pay day lending practices in Alabama?

The President not only touched on the issue during his public comments, but he also discussed the matter during a closed door round table discussion with different community leaders as well.

On Thursday, The Consumer Financial Protection Bureau proposed new regulations that would essentially require lenders to make sure a borrower could afford to pay loans back.

But the Alliance for Responsible Lending in Alabama (ARLA), has tried for years to get legislation passed that would reform pay day lending practices in our Alabama.

Stephen Stetson, who is connected with ARLA, said right now the interest charged on pay day loans is 456 percent. Its about 300 percent interest on auto title loans.

ARLA wants that capped at 36 percent.

Stetson said there is bipartisan support on this issue and he really thinks President Obama addressing the issue so openly here in Birmingham yesterday could actually make a difference in getting legislation passed this year.

“I would say some of our opponents at the statehouse in Montgomery have been some of the President Obamas biggest supporters. So hopefully those folks will realize the President is on our side and he understands the importance of responsible lending,” Stetson said.

“It think the spotlight will help people understand this is an issue that people in Alabama are being taken advantage of and its a moral issue and its just good economics not to drag people into debt they cant repay, he added.

Stetson said the same interest rate cap legislation that was introduced last year is expected to be introduced to law makers again next week.

Stetson said that information will definitely be introduced in the house and there may be a companion bill introduced in the senate at the same time.

Copyright 2015WBRC. All rights reserved.

Voya Foundation Announces First Quarter 2015 Grant Recipients

NEW YORK, March 19, 2015 /PRNewswire/ –Voya Financial, Inc. (NYSE: VOYA), announced today that eight nonprofit organizations located throughout the country will receive grants in the first quarter of 2015 through the companys charitable giving arm, the Voya Foundation. This quarter, Voya has initiated two new relationships which support its ongoing giving priorities of childrens education and financial literacy. YouthLink provides homeless youth with financial literacy training and Clarifi delivers a debt education program for low-income women. Below is an overview of first quarter 2015 grant recipients:

  • Youthlink (Minneapolis) Voya has partnered with YouthLink in support of the organizations Financial Literacy for Homeless Youth program, which provides homeless, transition-age youth with a financial literacy curriculum taught by Voya Financial employees. Topics include budgeting, credit cards, credit and banking, interest, and setting basic savings goals.
  • Clarifi (Coatesville, Pennsylvania) Clarifi is a nonprofit devoted to improving financial literacy through educational programming, regardless of economic status. Voya will support the organizations Debt Boot Camp, a six-month intensive financial education program for low-income women. Key topics include reducing or eliminating debt; developing and maintaining a budget to reduce unnecessary spending; and establishing long-term savings goals.
  • Cristo Rey New York High School (New York) Voya will sponsor Cristo Reys Summer Academy and Business Boot Camp, a three-week program that prepares incoming students for success in the Cristo Rey school system. The program includes a rigorous curriculum and work experience with partnering organizations. Classes focus on English and math skill development along with the training needed to work in professional environment, to interact with adults and to navigate Manhattan.
  • WJCT Public Broadcasting (Jacksonville, Florida) For the past 15 years, PBS Ready to Learn educational workshop has used electronic media to help millions of young children learn basic reading and math skills. Voyas grant to WJCT will build out this national program at the local level in Jacksonville. Programming will include the creation of a series of workshops for parents and guardians to promote parental involvement in childrens education.
  • Connecticut Science Center (Hartford, Connecticut) The Connecticut Science Centers Women in Science lecture and program series is designed to raise the profile of women in science and to promote science, technology, engineering and math (STEM) careers among young girls. Voyas grant will fund speakers and educational events including leadership awards, weekend programming and the museums first ever Girls Hackathon.
  • Chester County Futures (Exton, Pennsylvania) Chester County Futures Passport to College program provides motivated, disadvantaged Chester County youth with real-world learning and student advisors. Instruction is provided on a variety of relevant, grade-appropriate topics such as financial literacy, study skills, career exploration, college exploration and application, and 21st-century skill development.
  • Medgar Evers College (Brooklyn, New York) The Elite Scholars program provides scholarships and educational materials to the most qualified Medgar Evers College (MEC) students studying business, finance and related fields. MEC is the only historically black college within the City University of New York system, with a vast majority of students coming from disadvantaged backgrounds and being the first in their families to attend college.
  • Peoples Light (Malvern, Pennsylvania) Voyas funding will support the Peoples LightArts Discovery program, which is designed to complement curriculum at local schools. The program uses theater arts to enhance literacy and language arts skills for a diverse set of students from Bucks, Chester, Delaware, Montgomery and Philadelphia Counties in Pennsylvania.

Through charitable giving, the Voya Foundation focuses on exemplary programs in the areas of financial education and childrens education to help build an educated workforce. One of the foundations signature programs, the Voya-Girls Inc. Investment Challenge, provides high school girls with practical, hands-on investing experience, while allowing them to keep a portion of their gains in the form of college scholarships. At the core of the Voya Foundation is the belief that education is the key to healthy communities, which foster the sustainability and growth of the economy.

As an industry leader and advocate for greater retirement readiness, Voya Financial is committed to delivering on its vision to be Americas Retirement Company and on its mission to make a secure financial future possible one person, one family and one institution at a time.

Media Contact:
Nicole Vasile
Voya Financial
Office: (860) 580-2690
Cell: (860) 839-1589

About the Voya Foundation

The Voya Foundations mission is to improve the quality of life in communities where Voya Financial operates and its employees and customers live. The VoyaFoundation provides grants and establishes signature partnerships in the areas of financial literacy and childrens education and fosters employee engagement to deepen our positive impact on the community. For more information, visit

About Voya Financial

Voya Financial, Inc. (NYSE: VOYA), is composed of premier retirement, investment and insurance companies serving the financial needs of approximately 13 million individual and institutional customers in the United States.The companys vision is to be Americas Retirement Company and its guiding principle is centered on solving the most daunting financial challenge facing Americans today retirement readiness. Working directly with clients and through a broad group of financial intermediaries, independent producers, affiliated advisors and dedicated sales specialists, Voya provides a comprehensive portfolio of asset accumulation, asset protection and asset distribution products and services. With a dedicated workforce of approximately 6,500 employees, Voya is grounded in a clear mission to make a secure financial future possible one person, one family, one institution at a time.For more information, visit or view our Voya Financial Interactive Company Profile.Follow Voya Financial on Facebook and Twitter @Voya.

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SOURCE Voya Financial, Inc.


Housing group wins national award for Midland States Bank pact on lending to …

A St. Louis housing group will receive a national award for its agreement with Midland States Bank that included two new locations and $16.6 million in loans in minority neighborhoods.

The St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA) will receive the National Community Reinvestment Coalition’s National Community Reinvestment Award.

SLEHCRA had complained to the Federal Reserve that Midland, based in Effingham, Illinois, had too few home loan applications from black borrowers. The complaint came at the time of Midland’s application to purchase Heartland Bank in St. Louis, which was eventually approved.

Under the federal Community Reinvestment Act (CRA), banks are scrutinized for their lending practices in low- and moderate-income neighborhoods and encouraged to open branches in those neighborhoods. The $16.6 million Midland committed includes residential mortgages, home repair loans and multi-family housing loans.

“This award comes after many years of financial justice work, culminating in 2014’s agreement with Midland States Bank,” SLEHCRA said in a release.

The release also noted that the group’s work since 2009 had led to four new bank branches opened in low- or moderate-income areas, with two more on the way; more than $30 million committed by banks for community development activities, with six agreements signed; more than $550,000 committed to financial education partnerships with local non-profits; and 16 new CRA and Community Development positions created at banks.

Banking, Financial Services

Deposit, Lending Rates Gap Narrows Down

THE spread between one-year deposit and lending rates has narrowed down leading to a relief to lenders and depositors as both are benefiting on the declining and increasing of the rates.

The deposits rate increment, according to economists, will entice people to save more while open doors for lenders to borrow more for investment purpose.

John Archibald

| 2012-01-19 — John Archibald thinks Shelby County residents share the blame for a long-time teacher whos admitted molesting young girls and why Birmingham is the kick-off of a federal campaign against pay day loan operations.