What is a credit score and why does it matter

Building your family’s financial future is a labor of love. One important aspect is your credit score. Here we can help you understand what a credit score is and why it matters in your daily life.

What is a credit score?

A credit score is a number assigned to you by a credit bureau that is designed to “predict how likely you are to pay back a loan on time,” according to the Consumer Financial Protection Bureau (CFPB), a U.S. government agency.

Your credit scores are based on factors such as your “bill-paying history, your current unpaid debt, the number and type of loan accounts you have,” and other factors in your credit report, as explained by the CFPB.

Why does your credit score matter?

Many lenders use credit scores to decide whether to approve credit applications, such as a loan or credit card. In fact, your credit score is used to make several types of decisions that may affect your family’s life:

  • Personal loans, auto loans, home loans: Lenders (like banks and credit unions) may consider your credit score when deciding whether you qualify for a loan. It can also affect how much you qualify for and what the interest rate will be.
  • Insurance (for example, auto and home insurance): Insurance companies may look at “credit-based insurance scores”. These special scores include many, but not all, elements of the common credit scores. Lower scores are associated with more claims, so insurance companies could charge a higher insurance rate.
  • Utility companies: They can consider your credit score “to decide if a new customer has to make a deposit for service”, according to the Federal Trade Commission.
  • Cell phone companies, landlords: Cell phone companies and landlords can also look into your credit score before giving you service or renting an apartment to you.

A good credit score can provide you with better rates on loans and credit cards. It can also help you with many aspects of your daily life and with planning your family’s finances.

Tips from Oportun:

  • Before you choose a loan, ask whether the lender reports customer accounts to the credit bureaus. That way, your on-time payments may help your credit history and credit score.
  • Checking your credit report enables you to see your credit history. You should report any incorrect information that could affect your score. By law, you can get one free copy of your credit report every year from each of the three major credit bureaus – Experian, Equifax and Transunion. Request your free credit report at https://www.annualcreditreport.com.

This blog is for informational purposes only. It is not meant to provide personal financial advice. Please speak with your accountant or financial adviser for personal financial advice.

3 things you will need to get organized for your tax return and any refund

With the arrival of tax season, it’s time to get organized so you can file your tax return as soon as possible. The sooner you file, the sooner you can get your tax refund, if any, which you can use for the financial future of your family. Here we’re sharing some of the things that you’ll need to help you get organized.

1. Proof of income

These are the most common forms taxpayers receive about their income. You may receive others if you earn income from different sources.

  • Form W-2: From your employer, or employers if you have more than one job
  • Form 1099-MISC: From your clients, if you’re an independent contractor or self employed
  • Form 1099-INT: From your bank, if you earned more than $10 in interest

2. Documentation about your expenses

Here are common expenses that many taxpayers who itemize their deductions report on their tax returns to lower their taxable income and possibly how much tax they pay. You may have other deductions depending on your situation.

  • Receipts for business expenses, usually for anyone who is self-employed
  • Medical expenses that may apply to you, such as dental, vision, treatment, surgeries
  • Form 1098 for proof of interest payment on your home loan, if applicable

3. Information about you, and your children and relatives that you care for

Having handy information about you and your dependents, such as your children or family members that you care for, will help you avoid delays in preparing your tax return.

  • Social Security Number for you and your spouse, as well as your dependents OR Individual Taxpayer Identification Number (ITIN) if you don’t have a Social Security Number

Other useful documentation

Bank routing number and bank account number to include on your tax return if you would like the IRS to direct deposit any refund, if you have a bank account.

If someone helps you prepare your taxes, ask these questions
A new federal tax law was recently approved that will affect different taxpayers in different ways, starting with the federal tax return you will file in 2019. Plan ahead by asking your tax preparer:

  • How will the changes to the standard deduction affect you?

A portion of your income is deducted and is not taxed, called “deductions.” Taxpayers can either itemize their deductions or take the standard deduction. The standard deduction amount will almost double from what it was in 2017. Therefore, if you claim the standard deduction, the new law may lower the amount of your 2018 taxes (reported on your 2019 tax return).

  • What are the changes to deductions for state and local taxes?

You can usually deduct state and local taxes, such as income tax, sales tax and property taxes. However, starting in 2018 the amount you can deduct for state and local taxes that you paid will be limited to $10,000.

Congratulations! Getting organized is the first big step toward filing your tax return early. Remember, the sooner you file, the sooner you can get your tax refund, if you are due one.

This blog is for informational purposes only and is not tax advice. Please speak to your accountant or tax adviser for tax advice.

The opportunity of “Oportun”, after Progreso Financiero

When we were first founded in 2005, our name was Progreso Financiero, Spanish for Financial Progress. We hired bilingual staff and disbursed our very first loan from a folding card table in a Latino grocery store in the spring of 2006!

Over time, word spread beyond the Latino community about our affordable loans that help establish credit history.  In 2015, we decided we needed a shorter, more memorable name. After months of market research, we changed our name to “Oportun” to reflect what our customers said we represented to them: Opportunity.  They told us that our loans gave them the opportunity to repair the car that broke down, put a security deposit on a new rental apartment, the opportunity to establish credit history for the first time, and more. Three years later, our new name continues to encompass our dedication to helping people achieve progreso financiero, financial progress.

Our mission: To provide affordable loans that help people with little or no credit history establish credit and build a better future.

In 2015, when we changed our name to Oportun, our loans were only available in three states: California, Illinois, and Texas. Now they are available in nine, since we’ve added Arizona, Idaho, Florida, Missouri, Nevada, New Mexico, Utah and Wisconsin to the mix.  In 2015, customers needed to visit one of our retail locations to complete an application. Today, customers can also apply for a loan online using their mobile device. There are an estimated 45 million people in the United States who have little or no credit history, and we are well on our way to help more of them.

Hurricane Harvey and Oportun’s contribution to help affected employees and customers

Financial stress is difficult enough. When Hurricane Harvey hit Houston in 2017, Oportun knew how important it was to support its customers and employees.

Guiding principles: Dignity and compassion

Oportun Houston locations were shut down immediately and remained closed until each could be assessed and considered safe to enter. All staff and customers were encouraged to stay at home rather than come to work or to make a payment at the risk of their personal safety.

Employees

Oportun ensured that all employees were safe, even arranging a boat to pick up one stranded in a flooded home. Then the company issued gift cards for immediate financial assistance. Oportun continued to pay wages as if employees were working their regular schedules to minimize the impact on personal budgets. Further, they provided an emergency phone number for an Oportun-sponsored program that makes referrals to free services, including counseling in case employees needed emotional support.

Oportun also set up an Employee Assistance Fund with a matching grant from Oportun to help affected employees deal with the financial impact in the long term. These funds will be available to employees in any future hardships as well.

Customers

Many of Oportun’s customers live in low-to-moderate income communities whose lives are even more vulnerable in this kind of natural catastrophe. To ease immediate stress, the company postponed payments for some Houston customers affected by the hurricane, and it waived fees for late payments. One of Oportun’s corporate values is care, where compassion and dignity have a place.

The measures Oportun took in Houston demonstrate Oportun’s commitment to community, employees and customers.