Gettington is all about giving you options and helping you get the most out of your shopping experience with us. An important part of that experience is understanding how credit works and making the smartest possible choices when you make your purchases. That’s why we’ve created this information guide, with topics ranging from budgeting to credit, plus handy tips and tools, a glossary of terms, and much more. We’ve also included a section on how to read and understand your Gettington credit options, and your Gettington statement. With this valuable information in hand, you can rest easy knowing that your choices are sound and your purchases are credit smart.
Creating a budget
- Gather all sources of information that detail income and expenses. If the exact amounts are not available, make estimates.
- Break down the expenses into those that stay the same (mortgage or rent, etc.) and those that vary month to month (food, gasoline, phone, etc.)
- On a monthly basis, total your income (use your take-home amount) and expenses.
- Verify that income is greater than expenses. If not, make adjustments and reduce unnecessary expenses.
Maintaining a budget
- Keep accurate records and monitor income and expenses on a regular basis.
- Set realistic goals and make adjustments gradually to achieve budget objectives.
- Track your monthly results so you’re working toward financial health over the course of the year.
Benefits of a budget: short & long-term
- A budget focuses you on your financial status and guides you toward needed changes.
- A budget shows you exactly where expenses may be too high.
- A budget lets you build up your savings and be prepared for emergencies.
- A budget provides a sense of financial awareness and control.
Set targets: time and amount
- Set realistic savings goals: a sound strategy is to save 10% of your income, with 5% set aside toward short-term needs and 5% for long-term goals.
- Determine a short-term savings amount for a desired item. Reward yourself with the purchase and use any extra to establish your next goal.
Develop a safety fund
- Save during good economic times so you’re ready if an emergency happens.
- Build your safety fund up to the equivalent of 3-6 months of take-home income.
Review goals periodically and adjust as needed
- Circumstances change unexpectedly. Be ready to make revisions.
- Are you able to maintain your savings levels? Are you saving for new goals? Do you anticipate changes in income or expenses? Ask these questions every so often and make the necessary adjustments.
Benefits of good credit
- Good credit is earned through a history of timely payments and low balances.
- Good credit status may lead to special credit privileges: special pricing on promotional items, lower APR (Annual Percentage Rate), higher credit limits, and deferred billing.
Credit Score
- A credit score is based on a mathematical formula that projects how consistent you will be in making payments on a loan.
- The higher your credit score, the more reliable the lender expects you will be.
- A high credit score may also give you lower interest rates and expanded credit limits.
- You can improve your credit score by reducing credit debt, not applying for credit too frequently, and correcting mistakes on your credit report.
Debt-to-income ratio
- Debt-to-income ratio is calculated by dividing all your debt payments by gross income (excluding mortgage or rent payments).
- The recommended debt-to-income ratio is 15 percent or lower. A ratio of 20 percent or higher is a signal that your spending is too high.
- Calculate the ratio monthly. If you’re paid every other week, your monthly gross income is one paycheck times 2.17. Add dividends, interest received, alimony, and estimated amounts for bonus, commission, or tips.
- For debt calculations, include minimum payments on all credit purchases (except mortgage or rent) and loans.
Credit reports and agencies
- A credit report is a collection of information related to your credit history.
- There are three major credit reporting agencies who sell the information to lenders, as they are evaluating loan and credit card applications and rates.
- Consumers can request free copies of their credit reports annually from each of the three major agencies. Call 1-877-322-8228 or go online to www.annualcreditreport.com.
Timely payments
- Timely payments result in several advantages for the consumer.
- Advantages include a successful credit history, potential for increases in credit limit, avoidance of penalty fees for late payments, and more favorable interest rates.
More than minimum payments
- Paying more than the minimum payment is a worthwhile practice.
- You maintain a strong credit history, pay off the balance sooner, and ultimately pay less for the purchase with less interest costs.
Problems making payments
- If making a payment at all or on time may be a problem, getting in touch with your lender is essential. If you’re having trouble with your Gettington payments, notify us to see if we can arrange a mutually satisfactory solution.
- Don’t simply ignore making your payment. That can lead to late fees, a reduced credit limit, and an unfavorable credit history.
Higher credit scores
- You can improve your credit score by maintaining a good credit history, lowering your debt, minimizing credit applications, and correcting errors.
Monitoring credit reports
- Check your credit score at least once a year. Free credit reports are available annually from each of the three major credit report agencies.
- Work with lenders and the reporting agency to correct any errors and raise your score.
Number of credit accounts
- Establish only the number of credit accounts you can successfully manage. Having too many accounts may limit your ability to make timely payments on all of them, and that can hurt your credit history and score.
What are the different types of credit?
- There are three different types of credit: revolving credit, charge credit, and installment credit.
- Revolving credit occurs when a consumer borrows from a lender and pays the loan back in full or partial payments at a set time. Examples are Visa and Master Card.
- With charge credit, a lender expects the consumer to pay back the loan in full on the monthly due date. An example would be American Express.
- A mortgage is an example of installment credit. The consumer agrees to pay back the loan in established amounts over a predetermined period of time.
How do I establish credit?
- There are various ways to establish credit.
- Apply for a credit card, make a purchase, and then pay off the balance as quickly as possible to establish a good credit record.
- Another option is to apply for a secured credit loan, using the value of some possession as guaranty in case of default. That reduces the risk for the lender.
- An alternative is to have a person with a proven credit history co-sign as a borrower on a loan. When the loan is paid off in a timely manner, that will be part of the credit history for both parties.
What is a credit bureau?
- A credit bureau collects information regarding: identification, employment, credit history, and any public records and data.
What is a good credit score?
- Credit scores range from 350-850; however, there is no industry standard on what is a "good score." Lenders judge credit scores differently and also consider other factors in determining loan worthiness. Typically, though, a score above 690 is considered very good and a score below 620 is rated as "sub prime," meaning the consumer may not get the loan or may have stricter conditions applied to the loan.
How do I obtain my credit reports?
- Contact one or all of the three major credit bureaus to get your report. Each bureau interprets credit information differently, so your score may vary. Consumers are entitled to one free report annually via annualcreditreport.com or directly from the agencies: Experian 1-888-397-3742 or Trans Union 1-800-916-8800 or www.transunion.com or Equifax 1-800-685-1111 or www.equifax.com
How do I improve my credit score?
- You can improve your credit score by managing the number of credit accounts, so that you can pay them off in full and on time.
- You should also obtain your credit score from one or all three agencies at least annually to verify that all the information is accurate.
What information do the credit bureaus collect?
- The credit bureaus obtain information regarding your identity, credit history, employment background, and any public records.
How can I affect my Annual Percentage Rate?
- You can keep your rate on loans as low as possible by maintaining a solid credit record of paying off loans in full and on time. Your credit history indicates future potential for payment of the loan. The better your history, the more favorable your rate.
How can I increase my line of credit?
- Like the APR, your line of credit is based on your credit history. A strong record of complying with the terms of past loans will typically result in a high credit limit. If you want your limit increased, and your history is satisfactory, send your request directly to the lender.
FAST Option: How does it work?
The Fast option allows you to pay off the credit amount in four equal monthly payments. The benefits are: faster payoff, lower interest rate, and lower finance charges in total.
EASY Option: How does it work?
With the Easy option, a monthly fixed payment of $20 or 5.5% of the total balance is calculated at the time of purchase. The Easy Option monthly payment will remain fixed until the balance is paid off, an additional purchase is made or merchandise is returned.
Comparing Gettington credit options to your own credit card
The Gettington Payment Options usually offers a faster payback at a lower total cost.
About total amount paid
Whether using the Gettington Fast or Easy option, the total cost credit card (based on the consumer making $10 minimum monthly payment, or 1% of principal plus billed finance charges for the month, whichever is greater), for the purchase will be less than the charges on the consumer’s own.
How to read your bill
Your Gettington statement is designed to provide a clear and thorough understanding of your account information, finance charges, monthly activity of payments and charges, and account summary. You may also view your account activity and make payments online at Gettington.com.
Where to get help
If you have any questions about your statement, you can contact Gettington Customer Service by email at customerservice@gettington.com or phone at 1-866-688-1091.
