If you’re buying a home, you’ll probably hear the word “escrow” used in a few different contexts. Learn what escrow is, how it works and how it can benefit you as a home buyer, seller or homeowner.

What Is Escrow?

Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met (such as the fulfillment of a purchase agreement).

How Does Escrow Work?

It’s used in real estate transactions to protect both the buyer and the seller throughout the home buying process. Throughout the term of the mortgage, an escrow account will hold funds for taxes and homeowner’s insurance.

What Is An Escrow Account?

In real estate, escrow is typically used for two reasons:

• To protect the buyer’s good faith deposit so the money goes to the right party according to the conditions of the sale.
• To hold a homeowner’s funds for property taxes and homeowners insurance.

Escrow Accounts For Home Buying

When you’re buying a home, your purchase agreement will usually include a good faith deposit (also known as earnest money). This deposit shows that you’re serious about purchasing the home. If the contract falls through due to the fault of the buyer, the seller usually gets to keep the money. If the home purchase is successful, the deposit will be applied to the buyer’s down payment.

Escrow Accounts For Taxes And Insurance

After you purchase a home, your lender will establish an escrow account to pay for your taxes and insurance. After closing, your mortgage servicer takes a portion of your monthly mortgage payment and holds it in the escrow account until your tax and insurance payments are due.

The Benefits Of An Escrow Account

The biggest benefit of having an escrow account is that you’ll be protected during a real estate transaction – whether you’re the buyer or the seller. It can also protect you as a homeowner, ensuring you have the money to pay for property taxes and homeowners insurance when the bills arrive. You’ll find that there are a few other great benefits for home buyers, owners and lenders, too.

The Disadvantages Of An Escrow Account

When it comes to the disadvantages of an escrow account, it’s the homeowner who encounters most of the burden. Here are some examples:

• Higher monthly mortgage payments: An escrow account is funded through your monthly mortgage payment, making your monthly bill higher than it would be without escrow.
• Incorrect estimates: The amount needed for your escrow depends on your property taxes and homeowners insurance costs, which can change from year to year. 
• Changes to your monthly payment: Escrow is reassessed each year and, depending on if you were short or had excess money, your servicer will come up with a new estimate for the year. 

When it’s difficult to make all your payments on time, or interest rates on your current lines of credit are draining your checking account, consider debt consolidation. This smart financial move may help you get back on track with your monetary responsibilities, may boost your credit score and ease the mental stress of paying multiple bills every monthly.

What is Debt Consolidation?

Put simply, debt consolidation is when you get a loan to pay off various high-interest debts. You become responsible for one payment to the loaning institution, generally at a lower average interest rate than your previous commitments. Debt consolidation is often a good choice for people with high credit card balances and interest rates, student loan debt, unexpected home or car repair bills, medical expenses or other unsecured loans.

You have options when it comes to debt consolidation. AllCom Credit Union can help you discover the best method of consolidating your current debt to make paying bills more streamlined and affordable. Here are four options we often discuss with our members.

Home Equity Line of Credit (HELOC): If you are a homeowner, you can use up to 80% of the paid-off value of your home, or equity, to your advantage. A revolving line of credit uses your home as collateral. You can then withdraw funds as needed — once or multiple times — over a 10-year period to pay down debt.

Home Equity Loan: This option is for homeowners. A Home Equity Loan is similar to a HELOC in that it draws from the equity in your home. However, with a Home Equity Loan, you receive the loan funds in one lump sum payment. You can then use the money to pay off your debts.

Credit Card Balance Transfers: If you’re having trouble staying ahead of your credit card payments, consider transferring all of the balances to one new, lower-interest-rate card. This type of consolidation allows you to pay down your debt faster because less money is going to interest fees, card membership fees and late fees across several cards. AllCom Credit Union offers Visa credit cards with a great low rate, even on balance transfers.

Personal Loan: This option is great for paying down other types of debt, such as an unexpected car repair bill, medical expenses or a loan you need to repay to a friend. A personal loan is set up with a fixed interest rate, fixed monthly payments and a payment schedule so you know exactly how much you will pay each month and when your loan will be paid back in full.

Are you ready to improve your financial situation? AllCom would love to assist you with your next steps. Check out available options and contact us with your questions about debt consolidation today.

The Zelle / P2P fraud scam is widespread and has been making local and national news as the social engineering tactics used by fraudsters in this scam continue to evolve. A newer version of the scam has fraudsters, impersonating a Zelle user’s financial institution, conning the user into using Zelle to transfer funds to themselves using their mobile phone number under the guise that it will replace funds stolen from their account. However, the Zelle transfers go to the fraudsters.

AllCom continues to urge you to be wary of texts or calls appearing to come from the credit union. Never use Zelle, or any other P2P service, to transfer funds to yourself and to call the credit union using a reliable phone number to question any text message or phone call that seems to be received from the credit union.

Here’s a reminder of ways to protect yourself:

1. Pay it safe: Many P2P apps don’t let you cancel a transaction once you’ve sent it to another user. With that in mind, avoid sending or requesting money from anyone you don’t know and trust.
2. Take your time: Try not to rush when you’re using a P2P app to send money. If someone is pushing you to act quickly, it could be a red flag.
3. Treat payments like cash: Money moves quickly when you use P2P apps. Once you hit send, money doesn’t take long to reach its destination. It’s a good idea to double check you have the correct info to make sure your money goes where you intended.
4. Use your security settings: P2P apps have measures in place to help keep your account secure. Two-factor authentication requires you to provide multiple pieces of information to access your account. The first is typically your username and password. The second step might require you to enter a numeric code you’re given in an email or text. Or you might use fingerprint or facial recognition.
5. Be aware of phishing: One way fraudsters might try to access your account is by posing as your bank or a P2P company. They may try to contact you through emails, calls or texts. Avoid clicking links and sharing personal information. They may also claim you need to download another app or give them remote access to transfer money. Never give remote access to a third party.
6. Keep your personal information private: If you use social media, avoid sharing things like your address, phone number and other personal details. And ignore friend requests from people you don’t know.
7. Protect your passwords: Use different passwords for P2P apps and other sites. If you’re worried about remembering them all, there are tools available that might be able to help. And like the tip about your personal information, don’t share your passwords with others.

It has never been easier to transfer money quickly than with peer-to-peer (P2P) payment platforms. The increased convenience has made it easier to order services, shop online and support friends and family members with little to no lag time. Still, there is always someone looking to de-fraud your hard-earned money through fraud, a scam or a security attack. COVID-19 has created new opportunities for fraud and scam attempts, including those related to P2P payments. Taking time to understand potential threats and how to navigate them will give you an added layer of protection from fraud.

An increase in peer-to-peer payments

As P2P payments increase in popularity, it’s become important to know how they work. P2P payments are instant digital transfers that make it simple and secure to send money to friends, family, trusted businesses and professionals without a card, check or traditional multi-step wire transfer process. Similar to a debit card, they eliminate the need to have cash on hand by initiating a payment directly from an associated bank account. In real-time, money can be pulled from your bank account and sent to another P2P account. It’s a secure way to send money and digitize day-to-day transactions—unfortunately, if you’re unprepared, this added speed and convenience can open an opportunity for fraudsters. Some of the most used P2P options include:

• Zelle
• PayPal
• Venmo
• Cash app
• Square
• Apple Pay
• Google Pay

While these platforms are technologically secure, there are still many scams centered on using P2P services. Of particular concern are confidence schemes targeting P2P services. Confidence scams prey on a person’s emotions, wants and needs to gain sensitive personal information or convince the victim to send money to the scammer willingly. You should always be sure that you know and trust any person you are paying.

How do fraudsters commit P2P fraud? 

Criminals are using several methods to commit P2P fraud. Some use “friendly fraud” social engineering tactics, like messaging a user requesting that they deposit the fraudster’s check in their account and then send the funds back to the requester via a P2P app. The fraudster then promises to send the victim $500 as “payment” for the transaction. Of course, the fraudster never sends the payment and the original check bounces, leaving the member (and the credit union) on the hook for the funds. 

Another popular scam is where a fraudster advertises items for sale, like concert or sporting event tickets, and requests payment to be made via a P2P app. Once the funds are received, the fraudster disappears without ever delivering the requested item to the unwitting consumer. 

Unfortunately, with P2P fraud, fraudsters no longer need to obtain a user’s card number to steal funds. If they are able to hack into a member’s smartphone or mobile device, they can easily gain access to the user’s digital wallet app and transfer funds in their name. 

How can you protect yourself?

1. Pay it safe: Many P2P apps don’t let you cancel a transaction once you’ve sent it to another user. With that in mind, avoid sending or requesting money from anyone you don’t know and trust.
2. Take your time: Try not to rush when you’re using a P2P app to send money. If someone is pushing you to act quickly, it could be a red flag.
3. Treat payments like cash: Money moves quickly when you use P2P apps. Once you hit send, money doesn’t take long to reach its destination. It’s a good idea to double check you have the correct info to make sure your money goes where you intended.
4. Use your security settings: P2P apps have measures in place to help keep your account secure. Two-factor authentication requires you to provide multiple pieces of information to access your account. The first is typically your username and password. The second step might require you to enter a numeric code you’re given in an email or text. Or you might use fingerprint or facial recognition.
5. Be aware of phishing: One way fraudsters might try to access your account is by posing as your bank or a P2P company. They may try to contact you through emails, calls or texts. Avoid clicking links and sharing personal information. They may also claim you need to download another app or give them remote access to transfer money. Never give remote access to a third party.
6. Keep your personal information private: If you use social media, avoid sharing things like your address, phone number and other personal details. And ignore friend requests from people you don’t know.
7. Protect your passwords: Use different passwords for P2P apps and other sites. If you’re worried about remembering them all, there are tools available that might be able to help. And like the tip about your personal information, don’t share your passwords with others.

I started working at Central Massachusetts Telephone Workers’ Credit Union on June 7, 1977, which was located within the New England Telephone Building at 15 Chestnut Street in Worcester. Our members then were all employees of New England Telephone.  I was one of three part time employees and the Credit Union only offered savings accounts, small personal loans and auto loans.

We posted everything by hand and didn’t own a computer.  It’s hard for me to believe that more than 44 years have passed and it’s amazing to see what AllCom Credit Union has become.

One thing remains the same and that is my commitment to you, our members and our owners.  Every day my one driving thought was “the member comes first”.

Over the years we have been supported by a wonderful volunteer Board of Directors who have given their time freely and generously to set the policy direction of the Credit Union, always keeping our members and staff at the forefront of their decisions.

We have had wonderful staff that have worked incredibly hard and along with our Board of Directors and our committed members we have built an extremely strong and viable financial institution.  We are just as relevant today as we were 100 years ago, as we continue to serve a purpose in our members’ lives and in our community.

Laura Ybarra, our Executive Vice President will take my place on January 1, 2022.  Her intelligence, dedication, work ethic and commitment will continue to contribute to the overall success of AllCom. She embodies the true spirit of what a Credit Union is and I know she will successfully lead AllCom into the future.

We are approaching our 100th anniversary in 2022 and although these economic times are uncertain, AllCom is positioned to weather the storm and continue to thrive. I will miss helping generations of families meet their financial goals and making friendships that have lasted decades.

My last day in the office will be December 10th but I will be continuing to work remotely through the end of the year.

Thank you for turning what I thought would be just a part time job into a rewarding and fulfilling, 44 year career.

AllCom Credit Union is pleased to announce the 2023 Student Essay Contest for seventh and eighth grade students which is organized by the Cooperative Credit Union Association.

Students in seventh and eighth grade are asked to write an essay in 250 words or less on the following topic:

“With the worst of it behind us, the world continues to adjust to a new normal in the aftermath of the Covid-19 pandemic.  There have been many adjustments in the ways we work, the way we learn and the way we socialize as a result.  Please discuss the changes in your own life that have become part of YOUR new normal…things you do differently now from the way you did them before Covid.“  

Eight winning essays from across the state will be chosen. The first prize winner will receive $500. The seven finalists will each receive $250. In addition to the eight winning essays, there will be several honorable mention winners who will each receive $50. There will be an awards ceremony to honor the contest winners scheduled for May 19, 2023.

Application deadline: January 19, 2023

Essay Form
Contest Rules

If you have any questions, please call Erin Harvey, Branch Manager at 508.754.9980.

Anytime you move or get a new phone number, it comes with a seemingly endless list of organizations that you need to inform. Whenever you change addresses, phone numbers, name, etc., it is essential to make sure you also update your information with your financial institution in particular. You may think as long as your debit card and Online Banking  works, having an updated phone number or street address isn’t important, but that couldn’t be further from the truth!

Fraud Protection: Visiting websites and making online purchases with your debit and/or credit card open an opportunity for fraudsters to exploit on. Give us the tools to protect you! 

Current Address for Confidential Information: A change of address with USPS does not mean Bank Statements and other confidential information will be forwarded. USPS does not forward bank mail. AllCom needs to be notified. Keeping your contact information and your online banking profile updated are the best ways to do this.

Important Reminders and Updates: Not updating your contact info means missing out on important reminders, and other time-sensitive prompts. Updated contact info is vital for those who don’t receive a paper statement of account.

Please contact us here or call 888-754-9980 to update your contact information.

Cybersecurity has never been more important than it is now. As we spend more time online, we’re often creating and sharing more of our personal data. And if this data falls into the wrong hands, private and financial information could be at risk. So, for businesses and individuals alike, protecting sensitive data is critical.

Be Cautious of Links
Links in emails are a common tool used by hackers to trick individuals into giving up their secure information. Typically, hackers will use emails with banking statements, flight reservations, password recovery emails and more.

If a user clicks on one of these links, they are taken to a fake site that looks eerily similar to its real counterpart. The site will ask them to login or input private information. Once a hacker has their hands on this information they have access to the user’s account.

Vary Your Passwords
Although it’s easier to remember a single password for all your different accounts, it’s not the most secure. The best practice is to vary your password for every different site and account you use. This way, if a company you use gets breached, those stolen credentials won’t work on other sites.

Use a Password Manager
A password manager is a software or program that keeps all your passwords in one place. You have one “master key” password to unlock access to these passwords. With a password manager, you won’t have to worry about remembering each of your passwords. It will also keep you from having to write passwords down (which you should never do!)

Set Up Multi-Factor Authentication
Without multi-factor authentication (MFA) set up, a user can access their account with only a username and password. But, MFA adds another layer of protection. It requires more than one method of authentication to verify a user’s identity for login.

Don’t Save Payment Information
A lot of websites allow you to save your credit card information to make future buying faster and easier. Don’t do it. Breaches happen all the time. There’s nothing to steal if your credit card isn’t saved on the site.

Keep Your Systems Up to Date
Your software, operating system, and browser should always be up to date. If your business uses a firewall, your firewall software and firmware should also be up to date. The older a system is, the more time hackers have had to try and find vulnerabilities. By updating your systems, you will prevent malware or hackers from exploiting those security weaknesses.

Avoid Unknown Sites
In this age of social media, it’s easy to share a link online. But, exercise caution when visiting new sites. With an attack like this, a user doesn’t even have to click on anything for their computer to get infected. Just visiting a site is enough to pass on malicious code.

Be Careful on Social Media
Social media is a great way to keep in touch with friends and family.  But, be aware of what you are sharing online. Criminals and hackers can learn a lot of information about you by observing your public profile. And just like you wouldn’t share all your personal information with a stranger, you shouldn’t share it all online either.

Install Anti-Virus Software
Viruses, spyware, malware, phishing attacks, and more. There are so many ways in which your data can be compromised. Installing anti-virus software on your device will help combat these attacks. Make sure the software is active and up to date, and it should prevent digital security threats before they even happen.

Avoid Unnecessary Downloads
Downloads are a prime tactic hackers use to gain access to your network. To protect your computer and your data, limit your downloads. Any unnecessary software or browser extensions should be avoided. And in an organization, employees should need authorization before downloading anything from the internet.

If you deem a download safe, always choose a custom install and watch carefully. If any add-ons or extensions pop up during automatic installations, decline them.

Although many things online are secure, it’s better to be safe than sorry. Be aware of any links you are clicking, software you are downloading, and sites you are visiting. Keeping a little healthy paranoia towards email, social media, and the internet can help you catch things that would otherwise slip by.

Learning about your credit score and what you can do to improve it will help you unlock your full credit potential and achieve your financial goals.

How your Credit Score is Calculated
Lenders and creditors with whom you have a loan, credit card or other credit account, report information about your credit activity to the credit bureaus. This includes details like the balance of your account, amount paid, amount due and the payment status.

Scoring agencies incorporate five factors into the scoring model including payment history, credit utilization, average age of accounts, types of credit in use and new credit.

The Top Factors that Impact Your Credit Score

1. Payment History

Your payment history is typically the most important factor in calculating your credit score because it shows lenders whether you’ve been reliable in making on-time payments. This is an indicator that you’re likely to pay back your debts in the future. Just one or two late payments could significantly hurt your credit score.

2. Credit Card Utilization

Credit utilization ratio, or debt-to-limit ratio, measures the amount of your overall credit card limit that you are using. You should aim to keep your credit utilization ratio below 30%, but the lower the better. A high credit utilization ratio can lower your credit score and can make potential lenders worry that you may not be able to handle more debt. Your credit card utilization ratio is calculated by dividing your total outstanding balances on all of your cards by your total credit limit.

3. Age of Credit & Established Credit History

Establishing a long credit history usually improves your credit score if you have a history of on-time payments on your open accounts. Factors also include how long all of your credit accounts have been open (the age of your oldest account, the age of your newest account and an average age of all your accounts), how long specific credit accounts have been open and how long it has been since you used each account.

4. Credit Mix and Number of Accounts in Use

The number and type of credit accounts that you have in use (credit cards, auto and student loans, mortgages and other lines of credit) all factor into your credit score. Having more open credit accounts can lead to a better credit score. In addition to the number of open accounts, having a diverse mix of credit across two main categories, revolving credit and installment loans, could also improve your credit score.

5. Hard Credit Inquiries and New Credit

Each time someone pulls your credit report, a lender, landlord or insurer, an inquiry is noted on your credit report. There are two types of credit inquiry, hard and soft inquiries and only hard inquiries are visible to others on your credit report and impact your credit score.

• Hard inquiries, typically only made with your permission, occur when a financial institution accesses your credit report when you apply for credit.
• Soft inquiries, sometime made without your permission, occur when someone accesses your credit report—but not because you are applying for new credit.

Lenders who see that you have many recent inquiries may worry that you are applying at several places because you’re unable to qualify for credit or may be desperate for money.

The Bottom Line
From getting a low-interest personal loan to consolidating your credit card debt to buying your first home, strong credit health can be empowering and help you achieve the financial goals you’ve set. Achieving good credit health begins with knowing your credit score and where you land on the credit score spectrum, understanding what’s in your credit report and learning what actions you can take to maintain or strengthen your credit health. Check your credit score regularly and review your credit report annually to take better control of your finances and reach your full credit potential. Visit www.allcomcu.org to apply for a loan or credit card today.

If you’re not good at maintaining a household budget, you’re not alone. Many families operate without a spending plan, and even those who think they are budgeting may not actually be doing so. The budgeting process involves more than simply recording receipts and taking stock of spending habits. The following are some crucial steps for making a family budget:

Bring Both Partners Together
Have a discussion with all decision-makers in the house to hash out shared and individual financial goals. Both partners need to understand and accept that compromise may be necessary to create a budget that works for the entire household.

Create Goals
Whether your budget succeeds or fails could depend largely on whether it aligns with your personal and family priorities. Decide together what is important to your household. That could be one parent staying home to raise children, an early retirement or extensive travel. If it’s realistic, create your budget so it will funnel money toward that goal.

Track Income and Expenses
Before you can write a budget, you need to understand your current financial situation. Begin by tracking or reviewing 60 days’ worth of transactions through your bank and credit card accounts. This will be crucial to identifying what money gets lost in your household’s “black hole”.

Evaluate Your Current Situation
As you track expenses, place them into categories that make sense, such as housing, entertainment, dining out and debt payments. Once you know how much you spend in each category, determine which expenses are fixed and which change throughout the year. It’s also helpful to identify which categories are discretionary, meaning they cover expenses that are nice but nonessential for your family.

Trim Costs
If spending in one category is too high or if there is no money left over for savings or debt repayment, it’s time to trim expenses. Dining out tends to be a drain on many budgets. Menu planning, shopping sales at the supermarket and buying items in bulk can all reduce the cost of groceries and make it more economical to eat at home. Cable, subscription services and impulse purchases made online are also low-hanging fruit when it comes to reducing household spending.

Build Savings
Savings should be a top priority for any money left over after monthly expenses are paid. While it may be tempting to focus on paying down debt first, an emergency fund is equally important. Keeping enough money in savings to cover three to six months of expenses is a common rule of thumb.

After an emergency fund, retirement is the next savings priority. Workplace 401(k) accounts and IRAs offer tax incentives, making them a good spot to deposit money for retirement. Many employers will match employee 401(k) contributions up to a certain percentage, and workers should contribute at least enough to their retirement plan to receive the entire match. AllCom offers its members retirement options as well. Click here to learn more about Traditional and Roth IRAs.

Get Out of Debt
Part of the budgeting process is balancing the need to pay off debt with the need to save for the future. While having an emergency fund is important, it may be best to shift your focus to debt repayment after that. If a debt charges higher interest than savings would yield, it may be better to pay down debt than boost savings beyond what is necessary.

Some debt, however, comes with tax advantages – Up to $2,500 worth of student loan interest can be deducted from federal income taxes, and mortgage interest can be included on itemized deductions.

Check in Frequently
Once completed, a budget should serve as a road map for how a family plans to spend its money going forward. To be effective, it should be consulted frequently to ensure actual household spending is in line with what is written. As family circumstances or priorities change, the budget can be adjusted.