Intro to Credit Scores

A credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports. Your credit score serves as your keys to not only financial products like credit cards and loans, but also rental properties as a tenant. Oftentimes, employers and other important organizations will also look at your credit score. Lower scores means you will often receive higher interest while the opposite remains true for a higher credit score.

Organizations and lenders use credit scores because they are consistent and objective. Rather than doing a full report on a borrower's background, this is a simpler way to evaluate a person's credit. Also, credit scores only reflect your likelihood to repay debt responsibly based on your past credit history and current credit status meaning it is built by your own history.

Generic credit scores are used by many types of lenders and businesses to determine general credit risk. You can access your generic score as one score using the same formula across all three credit reporting agencies.

Custom credit scores are developed for use by individual lenders. They rely on credit reports and other information, such as account history, from the lender's own portfolio. They are unique to the specific business, or they may be used by specific types of lenders, such as credit unions. Custom credit scores can apply to specific types of lending, such as mortgage lending or auto lending.

Credit score factors are elements that can shape your credit report such as total debt, types of accounts, number of late payments, and the age of accounts. These factors indicate what elements of your credit history most affected the credit score at the time it was calculated. They also tell you what you must address in your credit history to become more creditworthy over time. Monitoring your credit on a regular basis can help you keep a close eye on how these factors are affecting your score and what you may be able to do to improve your score.

A generic credit score is based on credit history: number of open accounts, total levels of debt, repayment history, and other factors. The three companies: Experian, Transunion, and Equifax are the main credit reporting companies under the Fair Credit Reporting Act. Although Experian is the largest credit bureau in the United States, TransUnion and Equifax are widely considered to be just as accurate and important. Your score is the average of the three reports from each company. The scale for each company differs but overall, they combine to create a credit score on the scale from 300 - 850.

• Experian: 330 – 830

• Transunion: 300-850

• Equifax: 280-850

• 300 - 640: poor

• 640 - 690: fair

• 690 - 740: good

• 740+: excellent

Checking Accounts

A checking account is a type of bank account that allows you to easily deposit and withdraw money for daily transactions. This may include depositing a check you receive, taking out cash with your debit card or setting up direct deposit for your paychecks. Your checking account can act as a hub for all your financial transactions and help you stay on top of bills and in tune with your budget. It's also an account with a lot of flexibility, allowing you to easily manage everyday finances like receiving paychecks, making purchases, and paying bills.

You can put money into your checking account through these methods:

• Writing checks for a deposit

• Using ATMs

• Electronic debit/credit cards connected to the account

• Working with a bank teller

• Direct deposits

• Transfer from another account

• Mobile deposits

Similarly, you can withdraw money through these methods:

• Using an ATM

• Writing a check for cash

• Filling out a withdrawal slip

• Linking your account to a peer-to-peer payment service

• Transferring to another account

• Setting up autopay

You will receive a Bank Statement (usually monthly) for your checking account that is a list of all transactions for a bank account. It includes deposits, charges, withdrawals, as well as the beginning and ending balance for the period. Checks or transfers that haven't been processed yet may not be included in the bank statement and will only be found on the next month’s statement. This is why it is important to reconcile your bank statement, which means look back and double-check all of your purchases and make sure they were ones you authorized and that the ending balance matches up with your transactions.

However, there are fees associated with a checking account. If you get Overdraft Protection for when you overspend, the transaction will not be denied. However, there will be a fee of around $2-$5 per transaction and it is auto-deducted as well as required to pay off later. Without Overdraft Protection, the purchasing store may send a check back to your bank and then charge you $25+ for the inconvenience. On top of that, the bank will charge you a different fee of $25+ as an administrative fee for not managing your account. Your debit card charges will be denied with the title NSF: non-sufficient funds appears.

To start a checking account, you need to pick a bank or a credit union to open it in. You need two forms of government-issued photo identification (ex: passport and driver’s license), your social security number or individual taxpayer identification number, and full contact information (ex: name, address, phone number, etc.) to open an account.

Banks are for-profit organizations that usually have more branches/ATMs, a larger variety of services, more global access, and a Federal Deposit Insurance Corporation (FDIC) $250,000 protected bank account. In contrast, Credit Unions are nonprofit and are member-owned (cooperative). The services offered here are usually more personalized but may need a special requirement to enroll. Additionally, the insurance provided by the National Credit Union Accounts (NCUA) may vary.

For example, here are a couple of popular options for checking accounts for you to compare and contrast:

​Name of Bank or Credit Union	#1 BECU	#2 Chase	#3 Bank of America	#4 Axos Bank
Is this a national bank, regional bank or credit union?	​Credit Union	​National Bank	National Bank	National Bank
Is there a fee for a checking account? Other promotions?	$0	$12	$4.95	$0
Is there a minimum balance? (How much)	$500.01 is the minimum to get interest	$12 monthly fee if you are below $1500	$12 monthly fee if you are below $1500 Minimum opening deposit is $100	No minimum
What are the overdraft fees? (How much do they charge for the convenience	​$0	$34	$0	$0

What are Stacks?

As the stock market develops, new technologies such as blockchain, robotics, artificial intelligence (AI), machine learning (ML), and data analytics are becoming more popular. Using these methods, algorithms can track trends with the stock data which leads to the creation of a stack that baskets together groups of stocks based on the themes in the data. They focus on the companies’ fundamentals and their growth potential, among several other parameters, to generate a single basket of stocks and ETFs.

Stacks are collections of stocks & ETFs (exchange-traded funds) that you can invest in. These are often developed by hedge funds, global asset management companies, experienced wealth management firms and portfolio managers. Many apps allow you to explore pre-created stacks as well as create your own based on your investing goals. Essentially, they are based on a theme or an idea such as specific industries or even just one technology.

The advantage of stacks is that it reduces the risk that comes with diversification because of the focus on investing in themes. Often-times, these stacks are put together by professionals and with a lot of thought, meaning that they hold a higher degree of safety in comparison to decisions made by yourself. Basically, you won't have to do the hard work of research yourself and easily diversify your portfolio.

One of the thumb rules in any investment principle is reviewing and rebalancing your holdings to create the best portfolio that takes advantage of the market's position in the moment With Stacks, the baskets are actively and consistently rebalanced to ensure alignment with goals through technology, which relieves work that the investor has to do.

To sum it up, stacks are a great investing opportunity to look into if you want to quickly diversify your portfolio without lots of risk.