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Submission: On September 02 via manual from US — Scanned from DE
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<main id="education" style="display: none;">
<section class="accordion-tabs">
<article class="tab-header-and-content">
<a href="javascript:void(0);" class="basics tab-link is-active"><span class="glyphicons glyphicons-life-preserver"></span> Credit Basics</a>
<div class="tab-content is-open" style="display: block;">
<ul class="subnav">
<li><a href="javascript:void(0);" rel="information" class="active">Credit Report Information 101</a></li>
<li><a href="javascript:void(0);" rel="understanding">The Credit Score Recipe</a></li>
<li><a href="javascript:void(0);" rel="myths">Credit Myths and Misconceptions</a></li>
<li><a href="javascript:void(0);" rel="getcredit">Learn How to Get Credit</a></li>
<li><a href="javascript:void(0);" rel="tips">Tips for Raising Your Credit Score</a></li>
<li><a href="javascript:void(0);" rel="expiration">Credit Report Expiration Guide</a></li>
<li><a href="javascript:void(0);" rel="inquiries">All About Credit Inquiries</a></li>
</ul>
<article class="information showMe">
<h2>Credit Report Information 101</h2>
<p>The credit reporting bureaus — TransUnion, Equifax and Experian — are the three major companies that maintain credit reports. The reporting companies issue credit reports to creditors, insurers and others as permitted under law for the
purposes of evaluating your financial responsibility.</p>
<p>Here is an example of how the system works:</p>
<ol>
<li>Apply for a Credit Card<br>When you apply for a new credit card, the creditor requests a copy of your financial history, or credit report, from one or more of the credit reporting companies.</li>
<li>The Creditor's Assessment<br>The creditor may use your credit report, a score, and other information you provide (such as income or debt information) to determine whether to approve your application and what rates to offer.</li>
<li>The Creditor's Decision<br>If you are issued a card, the creditor reports that account to the credit reporting companies, and then updates it, including your balance and payment activity, about every 30 days.</li>
<li>Your Credit Profile Updated<br>The credit reporting companies update your credit report as they receive new information from creditors and lenders. Your credit profile changes based on your financial activity. The next time you
apply for a credit card or loan, the process repeats.</li>
</ol>
<h3>Your credit report</h3>
<p>Your report is divided into six main sections. When you open a new account, miss a payment or move, these sections are updated with new information. These sections are:</p>
<ol>
<li>Identifying Information<br>(name, address, birth date and Social Security number)</li>
<li>Employment</li>
<li>Consumer Statement</li>
<li>Account Information</li>
<li>Public Records</li>
<li>Inquiries</li>
</ol>
<h3>Managing Your Credit Report</h3>
<h4>Negative Records</h4>
<p>Late payments create a negative record. Generally, negative records will stay on your report for up to 7 years (up to 10 years for certain bankruptcy information). Positive records can remain on your credit report longer.</p>
<h4>Your Credit Report is updated in most cases every 30 days</h4>
<p>Your credit report is updated with new information reported by your creditors. Most creditors report new information approximately every 30 days, to reflect your account balances and payments you make.</p>
<h4>Check every 6-12 months</h4>
<p>Not all creditors report to all three companies; the companies obtain their data independently, so your credit reports from TransUnion, Equifax and Experian could substantially differ. That's why it's important to check your three
credit reports every 6-12 months to ensure that the information is accurate and up-to-date.</p>
<h4>Correcting inaccuracies</h4>
<p>Under the Fair Credit Reporting Act, consumers are protected if there is inaccurate information on their credit reports. If you find inaccurate information on your credit reports, you can contact the associated creditor or lender
directly. You can also dispute the inaccuracy with the credit reporting companies.</p>
<h4>Know the system</h4>
<p>Managing your credit and maintaining a good credit history can lead to better rates on major purchases. We recommend that you check your credit reports every 6-12 months, or at least 3 months before a major purchase, in order to
identify potential inaccuracies and any signs of identity theft.</p>
<p>Routine check-ups, along with paying your bills on time, keeping your credit card balances below 35% of their limits, and correcting any inaccuracies will help ensure your credit reports are viewed in the most favorable light.</p>
</article>
<article class="understanding">
<h2>Credit Score Recipe</h2>
<h3>What goes into my credit score?</h3>
<p>Have you ever wondered how your credit score is calculated, how something as complex as an individual's credit history is represented by a simple three-digit number?</p>
<p>It's a great question and something worth further explanation.</p>
<p>The credit scoring system became prevalent during the 1980's as a way for lenders to quickly evaluate a potential borrower's creditworthiness. Now credit scoring is used by lenders, landlords, and utility companies to evaluate your
credit behavior.</p>
<p>Here's an easy way to think about credit scores: they're like pies. Similar to a recipe for a pie, the recipe for a credit score calls for the blending together of numerous ingredients to form a resulting product. Tastier pies have
better ingredients. So do more palatable scores. </p>
<h3>So what are those ingredients, anyway?</h3>
<p>Using VantageScore<sup>®</sup> 3.0 as an example, let's look at 5 of the main ingredients that factor into your credit score:</p>
<p><b>Payment History.</b> Let's face it, if someone has a consistent history of making payments on time, they should probably be perceived as less of a risk than someone with the same exact credit profile who only has an intermittent
history of on-time payments.</p>
<p><b>Outstanding Debt.</b> This is the amount owed. Reducing Outstanding Debt is always in the best interest of your credit health.</p>
<p><b>Utilization.</b> Utilization measures the amount of available credit one is using. VantageScore<sup>®</sup> Credit Score recommends keeping balances below 30% of credit limit.</p>
<p><b>Credit Type & History.</b> History again? Yep, all else equal, someone with a longer and diversified credit history is typically seen as a less risky borrower. This fact reinforces the importance of establishing a solid
foundation of good credit as early as possible. </p>
<p><b>Recent Inquiries.</b> Each time someone authorizes a lender or business to make an official inquiry of his/her credit in connection with seeking credit, the score typically drops a little bit. It is important to apply for credit in
moderation. </p>
<h3>What does this all mean?</h3>
<p>Good credit scores and delicious apple pies have this in common: quality ingredients. So whether you're borrowing or baking, what matters is what you put into it.</p>
<p>When you are preparing for a major purchase make sure you check your credit scores and credit reports from all three credit reporting agencies: TransUnion, Equifax and Experian. Looking at your scores and reports a few months before
your loan application will help you get a complete picture of your credit health.</p>
<small>Source: What Influences Your Score (VantageScore Solutions, LLC); <a href="http://your.vantagescore.com/score-influences" target="_blank">http://your.vantagescore.com/score-influences</a></small>
</article>
<article class="myths">
<h2>Credit Myths and Misconceptions</h2>
<p>Credit myths and misconceptions are plentiful. Don't let incorrect information influence your credit behavior. Some of the most common credit myths are:</p>
<p><b>Your score drops if you check your own credit.</b><br>This widespread credit misconception fools a lot of people, but viewing your own report and score is counted as a "soft inquiry" and doesn't change the score one way or another.
"Hard inquiries" by a lender or creditor, such as those resulting from your applying for credit, may slightly lower your credit score. If you're shopping for a loan and concerned about harm to your score, know that multiple loan
inquiries within a period of a few weeks are usually treated as a single inquiry to minimize impact.</p>
<p><b>It helps to close old accounts.</b><br>This credit myth advocates closing old and inactive accounts to hike up your score. However, this might inadvertently have the opposite affect and lower your credit score because now the credit
history appears shorter. If you don't trust yourself to put a card away in a safe place and not use it, then consider canceling newer accounts.</p>
<p><b>Paying off a negative record means it's taken off your credit report.</b><br>Generally, negative records, such as collection accounts and late payments, will remain on your credit reports for up to seven years from the date of first
delinquency. Paying off the account sooner doesn't mean it's deleted from your credit report; instead it's listed as "paid." Of course, it's smart to pay your debts, both to reduce the total amount of debt you owe and to show your
willingness to repay your obligations, but expect the negative record to have some effect until it is purged from your report.</p>
<p><b>Co-signing doesn't mean you're responsible for the account.</b><br>Regardless of this credit myth, if you open an account jointly or co-sign a loan, you will be held legally responsible for the account. Activity on the joint account
is displayed on the credit reports of both account holders. If you co-sign for a friend's auto loan and that person doesn't make the payments, your credit profile will be hurt and vice versa. The only way to end the dual liability is to
have one party refinance the loan, or persuade the creditor to formally take you off the account.</p>
<p><b>Paying off a debt boosts your score by 50 points.</b><br>Contrary to this credit myth, credit reporting agencies companies determine your credit score via a complex algorithm that uses hundreds of factors and values to calculate it.
It's almost impossible to calculate the difference in points changing one factor might make. It's wise to pay your bills on time, work to lower your debts and ask that any inaccuracies be corrected. A proven record of sound financial
behavior and time will have the most significant impact on your score.</p>
</article>
<article class="getcredit">
<h2>Learn How to Get Credit</h2>
<h3>Wondering how to get credit?</h3>
<p>If you've never had a credit card, an auto loan, or even a cell phone in your name, then you probably have very little credit history. Having little or no credit history can make it difficult to get a loan. In your case, the lender has
little information for predicting how likely it is that you will repay your debt.</p>
<p>Fortunately, establishing credit is something you can work on over time. There are some steps that may help when you're trying to establish a credit history.</p>
<h3>Establishing a new credit file takes time and patience</h3>
<p>This isn't something that you can do overnight, and despite what you might think, there are no shortcuts to establishing good credit. Take your time and be patient. Avoid making applications with places that are likely to turn you down
the first time. Each time you make a credit application, it results in a hard inquiry. If potential creditors see numerous hard inquiries on your file, it could have a negative impact on results of future applications.</p>
<p>The important thing to remember when you are establishing your credit is to be patient and take your time. Make sure that when you do receive credit, whether it's a loan, credit card or even utility bills, you pay them on time.</p>
<small>This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making legal or financial decisions.</small>
</article>
<article class="tips">
<h2>Tips for Raising Your Credit Score</h2>
<p>Self-improvement is a wonderful thing. Becoming a better public speaker can earn you confidence and a promotion. Going to the gym regularly can help you lose those extra pounds. And improving your credit score can save you hundreds or
even thousands of dollars on life's big purchases. Improving your credit is not hard to do. It just takes time and a little knowledge about the credit scoring system.</p>
<p>While each person's individual credit profile is different and can be improved in different ways, there are five basic things that everyone can do to give their credit score a boost:</p>
<ul>
<li><b>Be punctual</b> — Pay all your bills on time each month. Late payments, collections, and bankruptcies have a negative effect on your credit scores.</li>
<li><b>Check your credit report regularly and take the necessary steps to remove inaccuracies</b> — Don't let your credit health suffer due to inaccurate information. If you find an inaccuracy on your credit report, contact the creditor
associated with the account, or the credit reporting agencies to have it corrected.</li>
<li><b>Manage your debts</b> — Keep your credit card account balances below 35% of your available credit limits. For instance, if you have a credit card with a $1,000 limit, you should try to keep the balance owed below $350.</li>
<li><b>Give yourself time</b> — Time is one of the most significant factors that can improve your credit score. Establish a long history of paying your bills on time and using credit responsibly. You may also want to keep the oldest
account on your credit report open in order to lengthen your period of active credit use.</li>
<li><b>Avoid excessive hard inquiries</b> — A large number of hard inquiries may be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties, or overextending yourself by taking on more debt than
you can easily repay. Apply for new credit in moderation.</li>
</ul>
</article>
<article class="expiration">
<h2>Credit Report Expiration Guide</h2>
<p>Late payments, tax liens, bankruptcies…Are you anxiously waiting for old records to be removed from your credit report? Take the initiative to check the expiration dates on records in your report. For example, if you discover an
obsolete bankruptcy from 2001 on your credit report, having it changed can boost your credit score. Check out the following expiration guide to kick your credit management into gear:</p>
<p><b>Bankruptcy</b><br>Chapter 7, 11, and 13 bankruptcies remain on your credit report for 7-10 years after the filing date. When you file for bankruptcy, all the accounts included should be marked as "Included in BK" and will each stay
on your report for a period of 7-10 years.</p>
<p><b>Charge-off accounts</b><br>If your delinquent account is charged-off, the record will stay on your credit report for 7 years.</p>
<p><b>Closed accounts</b><br>If the account has delinquencies, those marks will stay on your credit report for 7 years from the date they were reported. Positive closed accounts (with no delinquencies or late payments) can remain on your
credit report for longer than 7 years.</p>
<p><b>Collection accounts</b><br>Accounts sent to collections will remain on your credit report for 7 years from the date of the last 180-day late payment on the original account. The record will be marked as "paid collection" on your
report when you pay the full balance. If you settle with the collections agency for a reduced amount, be aware your record will state the account as "paid for less than the total due."</p>
<p><b>Inquiries</b><br>When a creditor or lender checks your credit it causes a "hard inquiry" to be listed on your credit report. These hard inquiries stay on your report for up to two years, and they can cause a slight drop in your
credit score if there are too many of them. When your credit is checked by an employer or when you check your own credit online, you may see a harmless "soft inquiry" on your credit report. Soft inquiries do not cause a drop in your
credit score and do not appear when a business checks your credit.</p>
<p><b>Judgments</b><br>Most judgments, including small claims, civil and child support, will remain on your credit report for 7 years from the filing date.</p>
<p><b>Late payments</b><br>If you are late with a payment, the 30 -180 day delinquency can stay on your credit report for 7 years.</p>
<p><b>Tax Liens</b><br>City, county, state and federal tax liens are especially harmful and can remain on your credit report indefinitely if unpaid. Once the lien is paid the record will remain on your credit report for 7 years from the
payment date.</p>
</article>
<article class="inquiries">
<h2>All About Credit Inquiries</h2>
<p>We all have them. Many of us aren't sure where they came from, or how long they are staying. No, we're not talking about the in-laws! We're talking about inquiries on our credit reports. Inquiries are one of the most confusing and
least understood aspects of the credit reporting system. Here's the skinny on inquiries and how you can manage them:</p>
<p><b>What are inquiries?</b><br>An inquiry is a record of someone checking your credit information. Inquiries come in two distinct categories: "hard inquiries" that occur when a business views your credit report for the purpose of an
application for credit and "soft inquiries" that occur when your credit is checked for other reasons or when you check your credit. If you apply for a new credit card, a hard inquiry record will appear on your credit report and may
cause a temporary drop in your credit score. When you check your own credit report, or when it is checked for a pre-approved marketing purpose or for account management, it is considered a soft inquiry and will not harm your credit
score.</p>
<p><b>Will checking my own credit harm my score?</b><br>Checking your own credit data will not harm your credit score. You can check your credit and review your data without worrying about causing any damage to your score.</p>
<p><b>Why are inquiries recorded?</b><br>Hard inquiries are recorded so that potential creditors and lenders can view how often you have applied for new credit. Potential creditors may think you are trying to spend beyond your means if
there are too many hard inquiries on your credit report. You can still shop around for a loan; multiple inquiries for the same purpose in a short amount of time are commonly grouped into one less harmful inquiry session. Inquiries are
also helpful for consumers because they can notify you of a potential identity thief applying for accounts in your name.</p>
<p><b>How long do they last?</b><br>Most hard inquiries remain on your credit report for two years from the original placement. All inquiries must stay on your credit report for at least a year. You are allowed to dispute inquiries on
your credit report, but it can be difficult to prove that the inquiry is indeed inaccurate. If you are unsure of where an inquiry came from, try contacting the financial institution listed before sending off a letter of dispute.</p>
</article>
</div>
</article>
<article class="tab-header-and-content">
<a href="javascript:void(0);" class="managing tab-link"><span class="glyphicons glyphicons-life-preserver"></span> Managing Your Money</a>
<div class="tab-content">
<ul class="subnav">
<li><a href="javascript:void(0);" rel="mistakes" class="active">Money Mistakes: How to Rectify Past Financial Sins</a></li>
<li><a href="javascript:void(0);" rel="goals">Setting and Achieving Personal Goals</a></li>
<li><a href="javascript:void(0);" rel="unpaid">Unpaid Medical Bills and Your Credit Report</a></li>
<li><a href="javascript:void(0);" rel="interest">The Importance of Understanding Interest</a></li>
<li><a href="javascript:void(0);" rel="budgetingtips">Budgeting Tips to Get Your Finances on Track</a></li>
<li><a href="javascript:void(0);" rel="rebuild">How to Rebuild Your Savings</a></li>
</ul>
<article class="mistakes showMe">
<h2>Money Mistakes: How to Rectify Past Financial Sins</h2>
<p>Everyone makes mistakes, especially when it comes to money. Find out how you can set yourself on a better financial path by atoning for some of your worst money missteps.</p>
<p>Nobody's perfect — especially when it comes to managing money. While you may try to keep track of your funds, budget wisely and spend well now, you may have made some serious money mistakes when you were younger. Since having money
doesn't exactly come with an owner's manual, you may have had lackadaisical spending ways or gone wild with credit before you smartened up and started taking money seriously. Still, those past sins can come back to haunt you in the form
of creditors or less-than-impressive credit scores. Your best bet is to face money issues head-on and atone for those missteps so you can move forward with better habits.</p>
<p><b>Open up</b><br>When dealing with past financial mistakes, it's easy to turn a blind eye and hope that they simply go away. But when you owe money or default on loans, not only are those creditors still looking to get paid, it can
affect your long-term ability to secure credit and enjoy future financial freedom. Instead, gather up all of your statements and go through them with a fine-tooth comb to give yourself a general picture of which mistakes you've made but
can be easily rectified with dedicated work.</p>
<p><b>Make a plan</b><br>Once you know where you stand money-wise, it's time to create a plan to pay back creditors, and remove any inaccurate information on your credit report. This may require some leg work on your part, so plan on
working with creditors on settlement deals, checking your credit report and contacting your creditors or credit reporting agencies to remove inaccuracies that you may have found. Consider your plan like you would a work project: focus,
then put your energy into accomplishing it.</p>
<p><b>Start small</b><br>No one is saying that you need to put all of your savings toward paying off an old debt to get rid of it. In fact, starting with smaller debts — an old credit card or small tax bill, for instance - helps you get
rid of some of your smaller mistakes, and can also help provide a sense of accomplishment. Start with the most manageable issues. That way, you'll have more of a leg to stand on when negotiating with larger creditors.</p>
<p><b>Keep it rolling</b><br>Once you've made headway on some of your smaller money mistakes, it's time to get serious. Keep up the good work by taking a look at your current budget and cutting back spending to free up money for payment
of other debts, or making settlement agreements with other creditors. When you have cash in hand, creditors may be more willing to settle, but you'll need to be prepared to act immediately. While it might mean a few months of leaner
living, having a clear conscience and rectifying the mistakes of the past can help you move forward with your future financial goals.</p>
</article>
<article class="goals">
<h2>Setting and Achieving Personal Goals</h2>
<p>Trying to improve your finances? Not sure where to start? Whether your goals involve credit enhancing, refinancing, or saving, you can make this year a personal best for your credit. Read on for our top credit best practices:</p>
<p>Set Goals:</p>
<ol>
<li>Check your credit report every three months: The first step to robust credit health is to know which bad financial habits, such as late payments, are reflected in your credit report. Regular check-ups will also help you guard
against identity theft.</li>
<li>Improve and raise your credit score above 650: A credit score above 650 may help qualify you for credit. The higher your score, the better the interest rates available to you.</li>
<li>Reduce your debt balances to below 35% of your available credit limit: Reducing your balances while maintaining active credit use makes you more appealing to prospective lenders and can help improve your credit score.</li>
<li>Create a monthly spending plan and stick to it: This simple commitment can help you start a savings plan and keep you from accruing unmanageable debt.</li>
</ol>
<p>Update Your Records:</p>
<ol start="5">
<li>Dispute inaccuracies on your credit report: Don't let your credit standing suffer because of inaccurate information.</li>
<li>Most negative records expire from your credit report after 7-10 years. These accounts have a significant negative effect on your credit rating, so make sure they are removed from your report at the right time.</li>
<li>Consider refinancing: See if refinancing your home or car could save you money. Investigate your options with a lender.</li>
</ol>
<p>Plan Ahead:</p>
<ol start="8">
<li>Start putting money into a savings account each month: No matter how much available credit you have, it can't beat cash in the bank. Setting aside a fixed amount each month will guarantee funds in the case of emergency while helping
you develop financial discipline.</li>
<li>Contribute to your 401(k): See if your company offers matching funds and try to add the maximum amount allowable for your budget.</li>
</ol>
<small>This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making legal or financial decisions.</small>
</article>
<article class="unpaid">
<h2>Unpaid Medical Bills and Your Credit Report</h2>
<p>Unpaid medical bills can cause surprising and serious damage to your credit report.</p>
<p>It's often a plain and simple case of miscommunication. Your insurance company and your medical provider are in negotiations over paying a recent hospital bill. You think it has been paid, or at least should have been, because you have
insurance. The bill is delinquent and then overdue and then sent to collections. All of the sudden you are stuck with a collections record on your credit report for 7 years. Not your fault? Think again.</p>
<p>Medical collections are becoming increasingly common. If you are injured and your insurance company doesn't pay, you can become legally responsible for the bill. That collections account can stay on your credit report for up to seven
years if you don't prove that it was a factual error. How can you be sure your credit doesn't end up with a scar? Follow these tips for keeping your credit out of harm's way:</p>
<h3>Prevention</h3>
<p><b>Emergency reserve</b> — It's important to have enough money saved to cover your living expenses for a few months in case you lose your job or unexpectedly land in the hospital. Medical bills can sometimes add up to unbelievable
amounts, so you may want to also keep a credit card with a high limit reserved for emergency use.</p>
<p><b>Be flexible</b> — Flexible Spending Accounts or "Cafeteria Plans" offered through your employer provide an easy pre-tax way to pay for medical expenses. Ask your employer about what plan may be included in your benefits. With this
system, you decide how much of your salary to set aside when you sign up for the year. For example, if you choose to pull out $100 a month for the plan, you have $1,200 you can use for medical bill reimbursements that year.</p>
<p><b>Power of attorney</b> — If things get really sticky, having a trusted spouse or family member with legal power of attorney can help. When you are sick in the hospital, you may not be able to wrestle with the insurance companies and
billing offices on your own. Talk to a financial planner or lawyer to have these papers drawn up. Be sure that this person understands the responsibilities and has a copy of your medical insurance policy.</p>
<h3>Prescription</h3>
<p><b>Get the facts</b> — If you receive a bill you thought was covered, go through your insurance policy with a fine tooth comb to see what you are really responsible for paying. These documents can also outline the best procedures for
cutting through the red tape in the billing office. You'll also want to contact the insurance company and the medical office for more information as soon as you suspect something is wrong with your bill.</p>
<p><b>Settle your bills</b> — Even if your insurance company is at fault, you will probably be better off paying the medical bill yourself before it's sent to collections rather than continuing to deny the charge. Paying the bill doesn't
mean you have to stop negotiating with your insurance company over the amount, it just means that you won't also have to negotiate over a collection account on your credit report.</p>
<p><b>Righting the wrongs</b> — If the account was sent to collections, avoid "settling" the bill and try to pay off the amount in full. A fully-paid collections account is better for your credit than an unpaid or settled account. If your
medical bill was sent to collections in error, you still have options. You can dispute the record on your credit report if you can prove that the bill was sent to collections unlawfully (for example — if you were never billed directly
for the amount before it was sent to collections).</p>
</article>
<article class="interest">
<h2>The Importance of Understanding Interest</h2>
<p>It's one thing to know what interest is. It's another to truly <i>understand</i> how interest works. Understanding interest is so important because it can have a considerable impact on your entire financial picture.</p>
<p>The most important thing to know about interest is that not all types are created equal. The way you calculate interest can drastically alter the results. Taking that into account, let's discuss the two main types of interest:</p>
<ol>
<li><b>Simple or Nominal Interest</b></li>
</ol>
<p>When you learned about interest in school, simple interest was probably the kind you were first taught. The amount of simple interest is calculated as a percentage of the principal amount. Put another way, with simple interest, the
principal amount upon which the interest is calculated, is constant.</p>
<p>This is easy to understand when your think about a savings account. Say you deposit $10,000 with an annual interest rate of 5%. Now let's say you let that $10,000 sit there for 5 years. What would the new amount be? If you said
$12,500, then you would be correct. Our deposit (the principal) earned $500 (5% of 10,000) each year for five years. That leaves us with $12,500.</p>
<ol start="2">
<li><b>Compound Interest</b></li>
</ol>
<p>Remember how with simple interest the amount upon which interest is calculated stayed the same (every year it was based on $10,000)? Well, with compound interest, that amount continues to accumulate on itself. Compound interest is
calculated based on the principal amount <i>and</i> any past interest earned.<sup>1</sup> The earned interest is simply added to the original principal amount at a predetermined rate (annually, monthly, etc.). </p>
<p>Compound interest might be better understood by example. Let's look back at our savings account scenario once again. This time, however, let's say at the end of each year your earned interest is added back to the original principal
amount. After year 1, just like with simple interest, you would have earned $500 in interest. This time, though, the difference is that $500 is now added to the $10,000. So the following year's principal becomes $10,500 and that year's
interest is calculated based on that new figure. This process repeats itself every year for 5 years. At the end of 5 years, with interest compounding at a yearly rate, we would actually end up with $12,763, leaving us with $263 more
than simple interest.</p>
<p>$263 is hardly an impressive extra profit, but hold that thought. Let's say you let that $10,000 sit for 10 years instead of 5. In that case, the simple interest would leave you with $15,000. On the other hand, compound interest would
leave you with $16,288. That's an extra profit of $1,288! As you can see, allowing compound interest to build and grow over a longer period of time can make a big difference.</p>
<p>Just ask Warren Buffett how powerful compound interest can be: </p>
<blockquote> "My wealth has come from a combination of living in America, some lucky genes, and compound interest." — Warren Buffett<sup>2</sup>
</blockquote>
<p></p>
<p>Most of us are not Warren Buffet. The beauty of compound interest, though, is that anyone can take advantage of its financial power. Whether you have a mortgage, are repaying student loans, or even depositing money in a bank account,
interest has the power to add to your debt or help build your savings. Knowing what interest is won't help you truly take advantage. Rather, it's understanding how it can best work for you. </p>
<small>
<sup>1</sup> <a href="https://www.investor.gov/glossary/glossary_terms/compound-interest" target="_blank">https://www.investor.gov/glossary/glossary_terms/compound-interest</a><br>
<sup>2</sup>
<a href="http://archive.fortune.com/2010/06/15/news/newsmakers/Warren_Buffett_Pledge_Letter.fortune/index.htm" target="_blank">http://archive.fortune.com/2010/06/15/news/newsmakers/Warren_Buffett_Pledge_Letter.fortune/index.htm</a>
</small>
</article>
<article class="budgetingtips">
<h2>Budgeting Tips to Get Your Finances on Track</h2>
<p>Do you cringe when you hear the word <i>budgeting</i>? If so, you aren't alone. Creating a budget requires planning and a lot of work to record all financial transactions made in a household. It's even more work to keep spending within
the limits of your monthly income.</p>
<p>Some people find it difficult to remember to record each and every item purchased, while others are surprised when they see how much money they spend on small things like daily coffee. If you don't use some form of a budget, however,
you run the risk of continually spending more money than you bring home or spending more money than you realize on things you don't need. You could also be at risk for missing payments on credit accounts, which may have a damaging
effect on your credit history and score. No matter which financial life-stage your family is in, it's never too late to create a household budget.</p>
<p>Recording how much of your monthly income goes to pay various bills and expenses will help you see where you may be spending more money than expected. Cutting unnecessary expenses frees up cash to increase emergency and long-term
savings or pay down debt faster. Planning monthly spending so it doesn't exceed your monthly income can prevent you from turning to credit cards or loans to cover your regular monthly bills. Sticking to a budget can also help families,
who would otherwise scramble to find the cash, to make their monthly mortgage or loan payments on time.</p>
<h3>Set up a basic budget</h3>
<p>Record your net monthly family income which is your total income from all sources less taxes, and other deductions from your gross wages. Then, list each bill, loan and credit account payment, as well as variable expenses that change
from month to month, such as grocery spending, entertainment and restaurant costs. Remember to include a monthly contribution to savings in your expenses. If your expenses are greater than your monthly income, you'll need to find ways
to increase your income, decrease your expenses, or both.</p>
<h3>Avoid budgeting pitfalls</h3>
<p>Families can find it difficult to stick to budgets that don't include rewards for careful money management. When you set up your budget, include a monthly amount to fund inexpensive activities or outings, such as monthly movie and
dinner nights, concerts or sporting events, or longer-term goals, such as annual family vacations.</p>
<p>Another common budget problem is forgetting to record daily spending. Small expenditures can add up over the month and are difficult to track down weeks after they've occurred. Avoid this problem by setting aside a monthly cash amount
or allowance to family members to spend as they like.</p>
<small>This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making legal or financial decisions.</small>
</article>
<article class="rebuild">
<h2>How to Rebuild Your Savings</h2>
<p>Sometimes no matter how much planning you do, your savings strategy goes awry. You can, however, rebuild your savings after a financial downturn. The key to rebuilding a drained savings account or a depleted retirement account is to
start again, as soon as you can, and not wait for some "extra" money to come rolling in from a mysterious source. You have the ability to rebuild your safety net and give yourself peace of mind.</p>
<h3>Revise your budget</h3>
<p>Although you may have just survived a financial downturn due to unemployment or an unexpectedly large expense, now isn't the time to spend freely.</p>
<ul>
<li>Revise your budget to account for a changed income or to include a payment plan for a large medical or home repair expense.</li>
<li>Cut back on frivolous spending. Reconsider your 300 cable channels, the latest gadget, going out to dinner five times a week or a new handbag every month. Distinguish between need and want and you may discover some extra money in
your budget.</li>
</ul>
<p>Your parents were right. Sometimes you have to make do with what you already have, including your current income. You can try to rebuild your savings when you pay yourself first. Here's how:</p>
<ul>
<li>Invest in your company's tax-deferred 401(k) plan. This will help you build a retirement fund over time. It will also lower your taxable income which may result in a lower tax rate for you. If your company matches your contribution,
this will boost your retirement savings even further.</li>
<li>Consider an IRA account. If you don't have access to a company-sponsored 401(k) plan, consider a Roth or traditional individual retirement account (IRA). Just finding an extra $30 a week in your budget could make this a reality.
</li>
<li>Set up automatic deposits to a savings account. You may already have your mortgage or other bills set up to be paid automatically through your checking account, but what about your savings account? Pay your savings account monthly
just like any other bill you receive.</li>
</ul>
<h3>Spend extra money wisely</h3>
<p>Extra money can sometimes find its way to you in the form of a pay raise, an income tax refund, a small inheritance, a work bonus or income from a side job. Consider using this extra money to pay yourself, not treat yourself.</p>
<ul>
<li>Increase your 401(k) contribution if you receive a pay raise.</li>
<li>Stash refunds or bonuses into a savings account or your IRA.</li>
</ul>
<h3>Track your credit score</h3>
<p>You've worked hard to pay down debt and rebuild your savings. Don't let the unknown sneak up on you. Keep an eye on your credit score as part of a routine to manage your financial well-being.</p>
<small>This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making legal or financial decisions.</small>
</article>
</div>
</article>
<article class="tab-header-and-content">
<a href="javascript:void(0);" class="events tab-link"><span class="glyphicons glyphicons-life-preserver"></span> Life Events</a>
<div class="tab-content">
<ul class="subnav">
<li><a href="javascript:void(0);" rel="college" class="active">Wait…Student Debt Can Help Me?</a></li>
<li><a href="javascript:void(0);" rel="studentcredit">Credit Cards and College Students — A Good Match?</a></li>
<li><a href="javascript:void(0);" rel="car">Buying Your First Car: What You Need to Know</a></li>
<li><a href="javascript:void(0);" rel="charity">Give to Charity: A Win-Win at Tax Time</a></li>
<li><a href="javascript:void(0);" rel="reviews">Plan Financial Management Reviews at Each Life Stage</a></li>
</ul>
<article class="college showMe">
<h2>Wait…Student Debt Can Help Me?</h2>
<p>Over the past few decades, the cost of attending college in the United States has skyrocketed. Not surprisingly, the use of student loans to help pay for this higher cost has also increased quite dramatically. This has left a large
portion of the population, especially the Millennial generation, with a substantial amount of debt just as they are entering the workforce. This phenomenon may end up weighing on the U.S. economy for decades to come. However, on an
individual level, might there be a silver lining for all of those student borrowers? The answer: potentially.</p>
<p>The fact is no one wants student debt, but if you have to take out a loan, it provides an opportunity to start recording a solid payment history. According to VantageScore™, student loans can positively impact your credit score because
generic models, like the VantageScore<sup>®</sup> 3.0 credit score, "reward a history of on-time payments as it demonstrates the ability to manage credit."<sup>3</sup></p>
<p>Here's an example. Let's say that Joe Student finished college with $30,000 in student debt. Let's also say Joe is paying this back over a ten-year period at a 5% interest rate. Roughly speaking, Joe will likely be making monthly
payments of around $300. As long as Joe makes his payments on time, he is on his way to enhancing one of the most vital factors when it comes to a healthy credit score, a strong payment history.</p>
<p>Why is Joe's payment history potentially so important for his credit health? Because creditors look for borrowers who have shown a history of making consistent and timely payments. Should Joe choose to apply for a mortgage a few years
down the road, Joe's history of paying back his student loans in a responsible manner may be useful when negotiating for more appealing terms. </p>
<p>Now, let's use that same scenario but say that Joe decided to ignore his scheduled repayment plan or never reached out to his student loan creditor to negotiate a more reasonable, income-based plan. Depending on how long Joe's neglect
lasts, his silver-lining opportunity could turn into a negative situation for his credit health. Just as Joe could have built a strong history of consistent and timely payments, he has done the opposite in this scenario. He's built a
history of inconsistent and unreliably-timed repayment.</p>
<p>In the end, carrying a load of student debt may weigh on your finances. However, student borrowers should also realize that borrowing presents an opportunity to establish a strong payment history. In the long run, student debt may pave
the way for more manageable credit terms down the road.</p>
<small>This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making legal or financial decisions.<br>
<sup>3</sup>A Lesson Plan to Understanding Credit Scores. New Haven, CT: VantageScore, 2012. Print.</small>
</article>
<article class="studentcredit">
<h2>Credit Cards and College Students — A Good Match?</h2>
<p>You've seen the ads and been tempted by the giveaways — but how much do you really know about credit cards? Wading through offers to find a credit card that suits your student lifestyle can be tricky. If you know a little about how
credit works and your options, you can start building your credit on the right foot. Here's a crash course in credit cards:</p>
<p><b>Statistics</b> — The Credit Card Act of 2009 slowed credit card use by college students by banning card approvals for anyone under 21 years old, unless they have an adult co-signer or can prove they have sufficient income to pay the
bills. Yet according to a survey by student loan provider Sallie Mae, students still manage to accrue credit card debt. The average balance among college students in 2013 was $499. By grade level, sophomores carry the lowest average
balance while freshmen and seniors carry the highest. Now that you know the credit stats, let's move on to some of the details.</p>
<p><b>Economics</b> — Think you're ready for a credit card? Opening a credit account has its benefits: you'll have access to emergency funds, you can start building your credit and your purchases may be protected under some credit cards
if damaged or stolen. It also has its dangers: you can easily rack up serious debt, interest rates can run high and you might damage your credit if not careful. Opening a credit account is only a good idea if you are sure you can use it
responsibly.</p>
<p><b>Accounting</b> — How can you find the card that is right for you? There are four major factors to take into consideration when looking at credit card offers:</p>
<ul>
<li><b>Card Type</b> — Credit cards come in all sorts of shapes and sizes. If you don't qualify for an ordinary credit card, investigate secured credit cards that use a savings account as collateral.</li>
<li><b>Annual Percentage Rate (APR)</b> — As a student your interest rates will probably range between 10-18% percent. This is higher than the rates an established borrower would receive but better than the rate for people with poor
credit histories. Read the APR offer closely to see what the terms are for the introductory rate. The lower the rate, the less your credit spending will cost.</li>
<li><b>Annual Fees</b> — Most standard credit cards don't come with annual fees. ? Some premium or reward cards, such as airline mileage cards, charge annual fees. Look at the small print disclosure to see if your card has an annual
fee. Also look for late fees, transaction fees and over-limit fees.</li>
<li><b>Grace Period</b> — The grace period on a credit card is the amount of time between when you make a purchase and when interest is applied to the purchase. For many cards, the interest-free grace period is around 25 days.</li>
</ul>
<p><b>History</b> — Once you start using your new card, it's a good idea to check your credit history to see if the account is being recorded correctly. Your credit reports from TransUnion, Equifax and Experian should have accurate
information about the account's name, open date, balance, monthly payment and credit limit. After a few months you'll want to check again to make sure your payment history is being reported properly. Late payments can damage your credit
score for up to 7 years, and can lead to problems receiving new credit in the future.</p>
<p><b>Philosophy</b> — The lethal student combination of limited income and a lot of opportunities for spending makes it easy for young credit card users to end up in deep debt. Using your new credit card to pay a regular monthly expense
(like gasoline or cable) is a good way to start. You'll know what to expect from your bill and can pay it in full each month. Having a conservative credit philosophy will help you graduate with your debt under control.</p>
</article>
<article class="car">
<h2>Buying Your First Car: What You Need to Know</h2>
<p>Buying your first car is considerably more expensive than the sticker price reveals. Prepare yourself for the unavoidable expenditures that come along for the ride.</p>
<p>Buying your first car? Congratulations! Before you plan your first road trip, though, there are several important financial factors to consider as you prepare to purchase this big ticket item.</p>
<h3>Not just the sticker price </h3>
<p>Buyer, beware. The sticker price posted on the window at any auto dealership, or even the listed price of a private sale, is actually considerably less than what you will need to pay to get your car on the road. Taxes and fees can vary
depending upon the state in which you live, but there are some common threads that add up to unavoidable expenditures.</p>
<p>You should be prepared to pay sales tax on the vehicle before you ever pull out of the dealership's parking lot. Your sales consultant will calculate this tax based upon the current rate in your state and will include it in your bottom
line. The dealership will then submit the tax payment to the state government directly.</p>
<h3>Taxes, taxes, taxes </h3>
<p>Many states also assess an excise or personal property tax based on the book value of your vehicle. This tax is assessed and collected annually and is generally not included as part of the fee package charged by your dealership. Be
prepared to receive this bill at a later date.</p>
<h3>Registration, license plate and inspection fees</h3>
<p>Speaking of your state government, it will also want to make sure your car has been safety inspected, is registered and easily identifiable — all at additional cost to you. Many dealerships, especially new car dealerships, will manage
the trip to the Registry (or Department) of Motor Vehicles for you. You'll see your registration and license plate fees appear in the breakdown of charges on your invoice. Find out in advance if your dealership handles this end of the
deal. Most states allow you a certain number of days within which the vehicle must be registered before penalties apply, so you'll need to plan ahead if you'll be completing this task yourself.</p>
<p>Even if your new ride has just rolled off the assembly line, you may be required to have the vehicle inspected by a licensed garage. Most states require an annual inspection. The garage will inspect all the lights and other safety
features, plus run an emissions test before stickering your car. Your inspection sticker is good for a year and also must be completed within a set period of time after purchase. For specifics in your state, check with your dealership.
</p>
<h3>The basics</h3>
<p>If you are buying your first car because you're just getting a driver's license for the first time, this is an expense to consider, as well. Your written and road tests usually carry a charge separate from paying for the driver's
license itself. As you finalize your budgeting, factor in the cost of general maintenance and scheduled servicing, such as oil changes and tire rotations. And of course, gas is a regular expense! Be certain you've selected a car that
not only meets your budget, but also is efficient enough to meet your needs.</p>
</article>
<article class="charity">
<h2>Give to Charity: A Win-Win at Tax Time</h2>
<p>There are many reasons to give to charity. The first, of course, is to lend your support to a cause in which you believe. But many people don't realize that donating to charity is a win-win situation at tax time.</p>
<h3>It could be deductible!</h3>
<p>Many people take the standard deduction on their 1040s. The current standard deduction parameters allow $12,600 for couples filing jointly or $6,300 for individuals. If your tax deductible spending is higher than allowed under the
standard deduction, it's a good idea to fill out Schedule A and itemize further deductions. This is where those donations to charity may put cash back in your pocket.</p>
<h3>Qualified charitable organizations</h3>
<p>Before you give, you may want to find out if your charity of choice is a qualified charitable organization. This means that the charity has registered with the government and has been designated a 501(c)(3) organization. If so, you can
deduct your donations. Some smaller charities, such as individual churches may not be required to file for 501(c)(3) status but donations to them may also be tax deductible.</p>
<p>Donations to individuals, political campaigns and foreign charities don't generally fall under the umbrella of qualified organizations. If you are unsure about a group's status, search the IRS website to find out if they're qualified.
</p>
<h3>Keep your receipts</h3>
<p>In order to claim charitable deductions on your tax return, you'll need to have receipts from the charity on hand, noting the date and dollar amount of each donation. Canceled checks or credit card statements verify your claims as
well. In the event that you have donated goods to the charity, such as gently used clothing, books or household goods, you'll have to generate a fair market value for the items donated and have your figure validated by the charity. If
the total value of your non-cash contributions is greater than $500, be prepared to file a Form 8283 along with your 1040 and Schedule A.</p>
<p>While you don't have to mail in your receipts with your tax return, be careful to maintain them with your records. In the event of an audit, these receipts will be critical in proving that your deductions are valid.</p>
<h3>How it's done</h3>
<p>Schedule A of the IRS Form 1040 is fairly user-friendly. Lines 16 through 19 apply to those who give to charity. You will enter your cash contributions, non-cash contributions, any carryover you may have from a prior year (a less
common situation) and the sum of your charitable deductions. This amount will be tallied on the Schedule A, along with other deductions you are entitled to, and deducted from your gross income before your tax is calculated.</p>
<p>Lending your support to a cause you believe in and saving at tax time…talk about a win-win situation!</p>
</article>
<article class="reviews">
<h2>Plan Financial Management Reviews at Each Life Stage</h2>
<p>Do you wonder if you're doing the right things with your finances? Perhaps you don't know where to focus your attention. As we move through adulthood, we pass through several financial life stages and make budget, debt and investing
choices. Understanding where you are and which financial management activities commonly occur at your life stage can help you meet your goals.</p>
<p><b>College</b><br>Young adults attending college often need time to adjust to being in charge of their own finances. Between applying for student loans and credit cards, and struggling with budgeting on a student income, college
students may find it difficult to balance cash flow. Establish good credit habits, such as paying credit card bills on time, staying out of overdraft on bank accounts, and keeping your credit balances below their limits. It can take
years to improve a negative credit history, so start strong and do your best to keep your credit healthy!</p>
<p><b>First Job</b><br>Graduating from college and entering the workforce brings new financial management challenges, such as making regular student loan payments. Once you are employed, you may want to apply for a car loan or increase
your credit card limit. Now is also the time to start a savings program. As you earn promotions or raises, start contributing to short and long-term savings, especially an emergency fund. Continue to make all payments on time and review
your credit file annually to verify the information is correct. In the near future, you may need a mortgage loan, and good credit could help qualify you for a lower interest rate.</p>
<p><b>Establishing a Home and Family</b><br>Marriage, children, and home ownership make this a busy life stage. Budgeting for household bills, loan payments, emergency savings, education savings, and retirement planning often requires
careful financial management. Take time now to fine-tune financial plans. Inquire about life insurance to protect your family members from financial pressure should anything happen to you. As you apply for joint credit products,
remember that you and your partner are equally responsible for repaying jointly borrowed money. Negative credit will affect both of your credit files.</p>
<p><b>Wealth-Building</b><br>If you have managed your credit responsibly to this point, your credit file and score may work in your favor. Continue to check your credit annually. A good credit score may help you get reduced interest rates
on a mortgage refinance or limit increases. While your equity and savings grow, your debt and outstanding credit balances should be declining.</p>
<p><b>Retirement</b><br>For many people, an ideal retirement includes spending time with loved ones, pursuing travel and other leisure activities. Even if your borrowing activity slows in retirement, continue to check your credit report
annually. Identifying any out-of-the-ordinary activity, such as inquiries from unknown companies or people, can alert you to potential issues such as attempted identity theft.</p>
</article>
</div>
</article>
<article class="tab-header-and-content">
<a href="javascript:void(0);" class="identity tab-link"><span class="glyphicons glyphicons-life-preserver"></span> Identity & Safety</a>
<div class="tab-content">
<ul class="subnav">
<li><a href="javascript:void(0);" rel="checklist" class="active">Fraud Victim Checklist</a></li>
<li><a href="javascript:void(0);" rel="spot">Spotting Identity Theft Signs</a></li>
<li><a href="javascript:void(0);" rel="freeze">The Difference Between a Fraud Alert and a Credit Freeze (also known as a Security Freeze)</a></li>
<li><a href="javascript:void(0);" rel="prevent">Five Powerful Ways to Protect Against Identity Theft</a></li>
<li><a href="javascript:void(0);" rel="travel">Keep Your Credit Safe While Traveling</a></li>
</ul>
<article class="checklist showMe">
<h2>Fraud Victim Checklist</h2>
<p>In 2015, 13.1 million Americans were identity fraud victims?. That's a new victim every two seconds. Education is critical to fast recovery. Once you realize that you are a victim of fraud, you'll want to act quickly to minimize
potential damage. We recommend you start by contacting necessary government, banking and credit agencies to ensure they're aware of the crime and to put a stop to any ongoing theft.</p>
<p>Review the following tips and procedures to help resolve any issues with your creditors, remove inaccurate information from your credit report and prevent further fraud.</p>
<h3>Protect your credit report immediately</h3>
<ul>
<li><a href="https://fraud.transunion.com" target="_blank">Add a Fraud Alert</a> to your credit report to warn potential credit grantors that you may be a victim of identity theft — online, right now.</li>
<li><a href="https://freeze.transunion.com" target="_blank">Consider placing a Security Freeze</a> on your TransUnion Credit Report.</li>
<li>Placing a security freeze on your credit report will stop lenders and others from accessing your TransUnion Credit Report entirely, which will prevent them from extending credit. You can do this online, right now.</li>
</ul>
<h3>Obtain and review a copy of your credit report</h3>
<ul>
<li>Review your TransUnion Credit Report and check for any unauthorized activity. Should suspicious activity show up on your report, contact the creditors and question the account and/or inquiry. Also, take full advantage of your credit
monitoring solution, as well as any features that allow you to lock your report long-term.</li>
<li>If you have questions, contact us and/or the other major credit reporting companies, Equifax and Experian.</li>
</ul>
<h3>Report fraud to the authorities</h3>
<ul>
<li>Contact government agencies, such as the Federal Trade Commission (FTC), to report fraudulent activity. You should also contact your local law enforcement agency to file a report.
<a href="https://www.ftc.gov/news-events/press-releases/2002/02/federal-trade-commission-announces-id-theft-affidavit" target="_blank">Download the FTC's Universal Fraud Affidavit</a>.</li>
<li>Contact your credit grantors and financial institutions.</li>
<li>Connect with companies with whom you have financial relationships and inform them that your accounts may be compromised. Banks and credit card companies may issue new cards and PINs to protect your assets, and will work to identify
and rectify any unauthorized charges.</li>
<li>Notify your bank to stop checks, if needed. You can also report stolen checks.</li>
<li>Contact any companies on your credit report that you do not recognize. Verify the information they have in their records for the reported item.</li>
<li>Provide the companies with a copy of your police report, notarized FTC Affidavit and other relevant documentation.</li>
<li>Keep a log of all related phone conversations, including the names of people with whom you speak.</li>
</ul>
<h3>Follow-up is key</h3>
<ul>
<li>Stay in touch with the companies and agencies you have contacted to ensure that their investigations resulted in your favor. TransUnion's FVAD will assist, but remember that as a victim, you are ultimately responsible for working
with credit grantors to remediate fraudulent accounts.</li>
<li>Periodically review your credit report. Check for any new fraudulent activity. Consider using features such as <a href="http://www.transunion.com/" target="_blank">TransUnion Credit Lock</a>, for ongoing protection.</li>
</ul>
<p>Visit <a href="http://www.transunion.com" target="_blank">www.transunion.com</a> for more information.</p>
<small>Javelin Strategy & Research</small>
</article>
<article class="spot">
<h2>Spotting Identity Theft Signs</h2>
<p>Knowing identity theft signs can help you protect yourself from this crime. While identity theft is always difficult, if it's caught early, you can minimize its damage to your reputation and financial health. Unfortunately, some people
don't realize that their credit, medical or even criminal records contain inaccuracies caused by the activity of identity thieves. Credit identity thieves use your personal information to apply for credit in your name, leaving you to
deal with angry creditors and collectors.</p>
<h3>Here Are Some Common Indicators of Identity Theft:</h3>
<ul>
<li>Unfamiliar activity on your credit reports: Regularly monitor your credit reports to look for new and unfamiliar accounts. If you see that unauthorized or unfamiliar activity has occurred, contact the credit bureau that issued the
report right away.</li>
<li>Unexpected charges on your credit or bank account statements: Don't toss your bank and credit card statements without reviewing them. Review each charge and call your bank or credit card company to question any purchase that you
don't recall making.</li>
<li>Letters or phone calls from unfamiliar creditors or bill collectors: If you start getting phone calls and letters from unknown creditors or bill collectors, take action. An identity thief has likely used your identity to open
accounts and make purchases, leaving you with the bills. Children and the elderly can also be targets of identity thieves that operate in this way, so look out for similar communications to your children or to relatives in your care.
</li>
<li>Inability to access online accounts: If you suddenly can't access bank or credit card account websites, contact your financial institutions immediately by phone. Someone may have stolen your passwords in an attempt to take over your
accounts.</li>
</ul>
<p>If you notice these identity theft signs, contact your local law enforcement agency and file a report. You should also notify credit bureaus, credit card companies and banks to inform them about your situation, reverse any charges and
remove inaccurate information. As a precaution, you may also want to place a fraud alert or security freeze on your credit reports, which provides you with additional layers of protection against an identity thief.</p>
</article>
<article class="freeze">
<h2>The Difference Between a Fraud Alert and a Credit Freeze (also known as a Security Freeze)</h2>
<h3>Fraud Alert</h3>
<p>A Fraud Alert is a cautionary flag, which is placed on your credit file to notify lenders and others that they should take special precautions to verify your identity before extending credit. When you place a Fraud Alert, you can
provide a mobile or other phone number for lenders to contact you to verify that the party applying for credit is actually you, not a fraudster.</p>
<p>When you place a Fraud Alert on your credit report with any one of the three major credit reporting companies, that company will notify the other two and fraud alerts will also be placed on those files as well. An Initial Fraud alert
lasts for 90 days and may be renewed. Fraud Alerts are available at no charge to consumers who believe they may be victims of identity theft.</p>
<h3>Security Freeze (also known as Credit Freeze)</h3>
<p>A Security Freeze is a more dramatic step in protecting your credit. Placing a Security Freeze will prevent lenders and others from accessing your credit report entirely, which will prevent them from extending credit. With a Security
Freeze in place, you will need to take special steps when you wish to apply for any type of credit. </p>
<p>Because of more stringent security features, you will need to place a Security Freeze separately with each of the three major credit reporting companies if you want the freeze on all of your credit files. A Security Freeze remains on
your credit file until you remove it or choose to lift it temporarily when applying for credit or credit-dependent services.</p>
</article>
<article class="prevent">
<h2>Five Powerful Ways to Protect Against Identity Theft</h2>
<p>Identity theft has become a prominent-enough problem that most people know they need to protect against it. The question is: how? Unfortunately there is no foolproof plan that can completely guarantee the safety of your identity.
However, there are steps individuals can take. Here are five great precautions to help guard against identity thieves:</p>
<ol>
<li><b>Protect your Social Security Number (SSN) like a Mama Bear.</b><br> Your SSN is "Need to Know" information. This means that you only give it out when ABSOLUTELY necessary. In addition, use your common sense. If the party asking
for your SSN seems untrustworthy or if it doesn't seem like they should need to know this information, then don't give it out.</li>
<li><b>When it comes to online passwords, randomness is the key.</b><br> In a perfect world, we could all just use our mother's maiden name or high school mascot as a universal password for everything. Unfortunately, we live in an
imperfect world. In today's society, thieves can easily find out this type of personal information. According to the Federal Trade Commission, a good rule of thumb is to keep it to an as-random-as-possible mix of letters, number and
symbols. That way, it will be more difficult to crack.</li>
<li><b>Keep an eye on your credit card accounts.</b><br> No, you don't need to memorize every purchase or know exactly what your balance is at all times. However, you should be able to look at your credit card statement and account for
every purchase. If something seems incorrect, immediately contact the issuer. Better to be on the safe side.</li>
<li><b>Stay on top of your credit.</b><br> Make sure your credit reports show accurate information. Signing up for a credit monitoring service is a great way to receive alerts regarding any credit report changes. Handle it similarly to
how you analyze your credit card statement: if you notice any inaccurate or unfamiliar information in your credit report, you should contact the creditor or file a dispute with all three major credit bureaus (TransUnion, Equifax,
Experian).</li>
<li><b>Don't carry every important document in your wallet/purse.</b><br> Although your wallet/purse may seem like a convenient and secure place to keep your Social Security card, birth certificate, or passport, doing so is a good way
to misplace or even lose these valuable items. This information may be as good as gold to identity thieves. Identity theft can take years to overcome. Developing good habits in protecting your personal information will go a long way
toward lowering the risk you'll have to undergo a lot of unnecessary stress and hassle. You can help achieve peace of mind by putting the above five steps into practice, starting today.</li>
</ol>
<p>Sources:</p> OnGuard Online (U.S. Federal Trade Commission); <span><a href="http://www.onguardonline.gov" target="_blank">http://www.onguardonline.gov</a></span>
<p></p>
</article>
<article class="travel">
<h2>Keep Your Credit Safe While Traveling</h2>
<p>Whether you're planning a trip to Las Vegas or Venice, including a few financial arrangements in your preparations will help keep your credit reports safe — and your mind free of worries — while you are away:</p>
<ol>
<li>Guard against mix-ups. Call your credit card issuers to notify them before you leave on a vacation, especially if you are traveling outside the U.S. If your banks and card issuers know that you are traveling, they are less likely to
mistakenly block your access to the account when charges from unusual locations appear.</li>
<li>Make photocopies of important documents. Having copies of your credit cards, driver's licenses and passports will make the replacement process much faster if you lose something important while traveling. Add a list of emergency
contacts to this folder including the phone numbers of your doctor, banks and family members. Leave a set of these documents at home with a friend and store one in a separate piece of luggage.</li>
<li>Avoid late payments. Plan ahead so you won't miss any bill payments while you are away. Online bill payment systems make it easy to schedule a payment in advance. A little preparation can help you avoid expensive late charges and
unnecessary damage to your credit.</li>
<li>Keep an eye on your identity. Guard against fraud by asking the Post Office to put a vacation hold on your mail and be careful where you use your credit card. Check the activity on your financial statements and your credit report(s)
closely when you return, to make sure they are accurate.</li>
</ol>
</article>
</div>
</article>
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Credit Basics
* Credit Report Information 101
* The Credit Score Recipe
* Credit Myths and Misconceptions
* Learn How to Get Credit
* Tips for Raising Your Credit Score
* Credit Report Expiration Guide
* All About Credit Inquiries
CREDIT REPORT INFORMATION 101
The credit reporting bureaus — TransUnion, Equifax and Experian — are the three
major companies that maintain credit reports. The reporting companies issue
credit reports to creditors, insurers and others as permitted under law for the
purposes of evaluating your financial responsibility.
Here is an example of how the system works:
1. Apply for a Credit Card
When you apply for a new credit card, the creditor requests a copy of your
financial history, or credit report, from one or more of the credit
reporting companies.
2. The Creditor's Assessment
The creditor may use your credit report, a score, and other information you
provide (such as income or debt information) to determine whether to approve
your application and what rates to offer.
3. The Creditor's Decision
If you are issued a card, the creditor reports that account to the credit
reporting companies, and then updates it, including your balance and payment
activity, about every 30 days.
4. Your Credit Profile Updated
The credit reporting companies update your credit report as they receive new
information from creditors and lenders. Your credit profile changes based on
your financial activity. The next time you apply for a credit card or loan,
the process repeats.
YOUR CREDIT REPORT
Your report is divided into six main sections. When you open a new account, miss
a payment or move, these sections are updated with new information. These
sections are:
1. Identifying Information
(name, address, birth date and Social Security number)
2. Employment
3. Consumer Statement
4. Account Information
5. Public Records
6. Inquiries
MANAGING YOUR CREDIT REPORT
NEGATIVE RECORDS
Late payments create a negative record. Generally, negative records will stay on
your report for up to 7 years (up to 10 years for certain bankruptcy
information). Positive records can remain on your credit report longer.
YOUR CREDIT REPORT IS UPDATED IN MOST CASES EVERY 30 DAYS
Your credit report is updated with new information reported by your creditors.
Most creditors report new information approximately every 30 days, to reflect
your account balances and payments you make.
CHECK EVERY 6-12 MONTHS
Not all creditors report to all three companies; the companies obtain their data
independently, so your credit reports from TransUnion, Equifax and Experian
could substantially differ. That's why it's important to check your three credit
reports every 6-12 months to ensure that the information is accurate and
up-to-date.
CORRECTING INACCURACIES
Under the Fair Credit Reporting Act, consumers are protected if there is
inaccurate information on their credit reports. If you find inaccurate
information on your credit reports, you can contact the associated creditor or
lender directly. You can also dispute the inaccuracy with the credit reporting
companies.
KNOW THE SYSTEM
Managing your credit and maintaining a good credit history can lead to better
rates on major purchases. We recommend that you check your credit reports every
6-12 months, or at least 3 months before a major purchase, in order to identify
potential inaccuracies and any signs of identity theft.
Routine check-ups, along with paying your bills on time, keeping your credit
card balances below 35% of their limits, and correcting any inaccuracies will
help ensure your credit reports are viewed in the most favorable light.
CREDIT SCORE RECIPE
WHAT GOES INTO MY CREDIT SCORE?
Have you ever wondered how your credit score is calculated, how something as
complex as an individual's credit history is represented by a simple three-digit
number?
It's a great question and something worth further explanation.
The credit scoring system became prevalent during the 1980's as a way for
lenders to quickly evaluate a potential borrower's creditworthiness. Now credit
scoring is used by lenders, landlords, and utility companies to evaluate your
credit behavior.
Here's an easy way to think about credit scores: they're like pies. Similar to a
recipe for a pie, the recipe for a credit score calls for the blending together
of numerous ingredients to form a resulting product. Tastier pies have better
ingredients. So do more palatable scores.
SO WHAT ARE THOSE INGREDIENTS, ANYWAY?
Using VantageScore® 3.0 as an example, let's look at 5 of the main ingredients
that factor into your credit score:
Payment History. Let's face it, if someone has a consistent history of making
payments on time, they should probably be perceived as less of a risk than
someone with the same exact credit profile who only has an intermittent history
of on-time payments.
Outstanding Debt. This is the amount owed. Reducing Outstanding Debt is always
in the best interest of your credit health.
Utilization. Utilization measures the amount of available credit one is using.
VantageScore® Credit Score recommends keeping balances below 30% of credit
limit.
Credit Type & History. History again? Yep, all else equal, someone with a longer
and diversified credit history is typically seen as a less risky borrower. This
fact reinforces the importance of establishing a solid foundation of good credit
as early as possible.
Recent Inquiries. Each time someone authorizes a lender or business to make an
official inquiry of his/her credit in connection with seeking credit, the score
typically drops a little bit. It is important to apply for credit in moderation.
WHAT DOES THIS ALL MEAN?
Good credit scores and delicious apple pies have this in common: quality
ingredients. So whether you're borrowing or baking, what matters is what you put
into it.
When you are preparing for a major purchase make sure you check your credit
scores and credit reports from all three credit reporting agencies: TransUnion,
Equifax and Experian. Looking at your scores and reports a few months before
your loan application will help you get a complete picture of your credit
health.
Source: What Influences Your Score (VantageScore Solutions, LLC);
http://your.vantagescore.com/score-influences
CREDIT MYTHS AND MISCONCEPTIONS
Credit myths and misconceptions are plentiful. Don't let incorrect information
influence your credit behavior. Some of the most common credit myths are:
Your score drops if you check your own credit.
This widespread credit misconception fools a lot of people, but viewing your own
report and score is counted as a "soft inquiry" and doesn't change the score one
way or another. "Hard inquiries" by a lender or creditor, such as those
resulting from your applying for credit, may slightly lower your credit score.
If you're shopping for a loan and concerned about harm to your score, know that
multiple loan inquiries within a period of a few weeks are usually treated as a
single inquiry to minimize impact.
It helps to close old accounts.
This credit myth advocates closing old and inactive accounts to hike up your
score. However, this might inadvertently have the opposite affect and lower your
credit score because now the credit history appears shorter. If you don't trust
yourself to put a card away in a safe place and not use it, then consider
canceling newer accounts.
Paying off a negative record means it's taken off your credit report.
Generally, negative records, such as collection accounts and late payments, will
remain on your credit reports for up to seven years from the date of first
delinquency. Paying off the account sooner doesn't mean it's deleted from your
credit report; instead it's listed as "paid." Of course, it's smart to pay your
debts, both to reduce the total amount of debt you owe and to show your
willingness to repay your obligations, but expect the negative record to have
some effect until it is purged from your report.
Co-signing doesn't mean you're responsible for the account.
Regardless of this credit myth, if you open an account jointly or co-sign a
loan, you will be held legally responsible for the account. Activity on the
joint account is displayed on the credit reports of both account holders. If you
co-sign for a friend's auto loan and that person doesn't make the payments, your
credit profile will be hurt and vice versa. The only way to end the dual
liability is to have one party refinance the loan, or persuade the creditor to
formally take you off the account.
Paying off a debt boosts your score by 50 points.
Contrary to this credit myth, credit reporting agencies companies determine your
credit score via a complex algorithm that uses hundreds of factors and values to
calculate it. It's almost impossible to calculate the difference in points
changing one factor might make. It's wise to pay your bills on time, work to
lower your debts and ask that any inaccuracies be corrected. A proven record of
sound financial behavior and time will have the most significant impact on your
score.
LEARN HOW TO GET CREDIT
WONDERING HOW TO GET CREDIT?
If you've never had a credit card, an auto loan, or even a cell phone in your
name, then you probably have very little credit history. Having little or no
credit history can make it difficult to get a loan. In your case, the lender has
little information for predicting how likely it is that you will repay your
debt.
Fortunately, establishing credit is something you can work on over time. There
are some steps that may help when you're trying to establish a credit history.
ESTABLISHING A NEW CREDIT FILE TAKES TIME AND PATIENCE
This isn't something that you can do overnight, and despite what you might
think, there are no shortcuts to establishing good credit. Take your time and be
patient. Avoid making applications with places that are likely to turn you down
the first time. Each time you make a credit application, it results in a hard
inquiry. If potential creditors see numerous hard inquiries on your file, it
could have a negative impact on results of future applications.
The important thing to remember when you are establishing your credit is to be
patient and take your time. Make sure that when you do receive credit, whether
it's a loan, credit card or even utility bills, you pay them on time.
This information is for educational purposes only and does not constitute legal
or financial advice. You should always seek the advice of a legal or financial
professional before making legal or financial decisions.
TIPS FOR RAISING YOUR CREDIT SCORE
Self-improvement is a wonderful thing. Becoming a better public speaker can earn
you confidence and a promotion. Going to the gym regularly can help you lose
those extra pounds. And improving your credit score can save you hundreds or
even thousands of dollars on life's big purchases. Improving your credit is not
hard to do. It just takes time and a little knowledge about the credit scoring
system.
While each person's individual credit profile is different and can be improved
in different ways, there are five basic things that everyone can do to give
their credit score a boost:
* Be punctual — Pay all your bills on time each month. Late payments,
collections, and bankruptcies have a negative effect on your credit scores.
* Check your credit report regularly and take the necessary steps to remove
inaccuracies — Don't let your credit health suffer due to inaccurate
information. If you find an inaccuracy on your credit report, contact the
creditor associated with the account, or the credit reporting agencies to
have it corrected.
* Manage your debts — Keep your credit card account balances below 35% of your
available credit limits. For instance, if you have a credit card with a
$1,000 limit, you should try to keep the balance owed below $350.
* Give yourself time — Time is one of the most significant factors that can
improve your credit score. Establish a long history of paying your bills on
time and using credit responsibly. You may also want to keep the oldest
account on your credit report open in order to lengthen your period of active
credit use.
* Avoid excessive hard inquiries — A large number of hard inquiries may be
interpreted as a sign that you are opening numerous credit accounts due to
financial difficulties, or overextending yourself by taking on more debt than
you can easily repay. Apply for new credit in moderation.
CREDIT REPORT EXPIRATION GUIDE
Late payments, tax liens, bankruptcies…Are you anxiously waiting for old records
to be removed from your credit report? Take the initiative to check the
expiration dates on records in your report. For example, if you discover an
obsolete bankruptcy from 2001 on your credit report, having it changed can boost
your credit score. Check out the following expiration guide to kick your credit
management into gear:
Bankruptcy
Chapter 7, 11, and 13 bankruptcies remain on your credit report for 7-10 years
after the filing date. When you file for bankruptcy, all the accounts included
should be marked as "Included in BK" and will each stay on your report for a
period of 7-10 years.
Charge-off accounts
If your delinquent account is charged-off, the record will stay on your credit
report for 7 years.
Closed accounts
If the account has delinquencies, those marks will stay on your credit report
for 7 years from the date they were reported. Positive closed accounts (with no
delinquencies or late payments) can remain on your credit report for longer than
7 years.
Collection accounts
Accounts sent to collections will remain on your credit report for 7 years from
the date of the last 180-day late payment on the original account. The record
will be marked as "paid collection" on your report when you pay the full
balance. If you settle with the collections agency for a reduced amount, be
aware your record will state the account as "paid for less than the total due."
Inquiries
When a creditor or lender checks your credit it causes a "hard inquiry" to be
listed on your credit report. These hard inquiries stay on your report for up to
two years, and they can cause a slight drop in your credit score if there are
too many of them. When your credit is checked by an employer or when you check
your own credit online, you may see a harmless "soft inquiry" on your credit
report. Soft inquiries do not cause a drop in your credit score and do not
appear when a business checks your credit.
Judgments
Most judgments, including small claims, civil and child support, will remain on
your credit report for 7 years from the filing date.
Late payments
If you are late with a payment, the 30 -180 day delinquency can stay on your
credit report for 7 years.
Tax Liens
City, county, state and federal tax liens are especially harmful and can remain
on your credit report indefinitely if unpaid. Once the lien is paid the record
will remain on your credit report for 7 years from the payment date.
ALL ABOUT CREDIT INQUIRIES
We all have them. Many of us aren't sure where they came from, or how long they
are staying. No, we're not talking about the in-laws! We're talking about
inquiries on our credit reports. Inquiries are one of the most confusing and
least understood aspects of the credit reporting system. Here's the skinny on
inquiries and how you can manage them:
What are inquiries?
An inquiry is a record of someone checking your credit information. Inquiries
come in two distinct categories: "hard inquiries" that occur when a business
views your credit report for the purpose of an application for credit and "soft
inquiries" that occur when your credit is checked for other reasons or when you
check your credit. If you apply for a new credit card, a hard inquiry record
will appear on your credit report and may cause a temporary drop in your credit
score. When you check your own credit report, or when it is checked for a
pre-approved marketing purpose or for account management, it is considered a
soft inquiry and will not harm your credit score.
Will checking my own credit harm my score?
Checking your own credit data will not harm your credit score. You can check
your credit and review your data without worrying about causing any damage to
your score.
Why are inquiries recorded?
Hard inquiries are recorded so that potential creditors and lenders can view how
often you have applied for new credit. Potential creditors may think you are
trying to spend beyond your means if there are too many hard inquiries on your
credit report. You can still shop around for a loan; multiple inquiries for the
same purpose in a short amount of time are commonly grouped into one less
harmful inquiry session. Inquiries are also helpful for consumers because they
can notify you of a potential identity thief applying for accounts in your name.
How long do they last?
Most hard inquiries remain on your credit report for two years from the original
placement. All inquiries must stay on your credit report for at least a year.
You are allowed to dispute inquiries on your credit report, but it can be
difficult to prove that the inquiry is indeed inaccurate. If you are unsure of
where an inquiry came from, try contacting the financial institution listed
before sending off a letter of dispute.
Managing Your Money
* Money Mistakes: How to Rectify Past Financial Sins
* Setting and Achieving Personal Goals
* Unpaid Medical Bills and Your Credit Report
* The Importance of Understanding Interest
* Budgeting Tips to Get Your Finances on Track
* How to Rebuild Your Savings
MONEY MISTAKES: HOW TO RECTIFY PAST FINANCIAL SINS
Everyone makes mistakes, especially when it comes to money. Find out how you can
set yourself on a better financial path by atoning for some of your worst money
missteps.
Nobody's perfect — especially when it comes to managing money. While you may try
to keep track of your funds, budget wisely and spend well now, you may have made
some serious money mistakes when you were younger. Since having money doesn't
exactly come with an owner's manual, you may have had lackadaisical spending
ways or gone wild with credit before you smartened up and started taking money
seriously. Still, those past sins can come back to haunt you in the form of
creditors or less-than-impressive credit scores. Your best bet is to face money
issues head-on and atone for those missteps so you can move forward with better
habits.
Open up
When dealing with past financial mistakes, it's easy to turn a blind eye and
hope that they simply go away. But when you owe money or default on loans, not
only are those creditors still looking to get paid, it can affect your long-term
ability to secure credit and enjoy future financial freedom. Instead, gather up
all of your statements and go through them with a fine-tooth comb to give
yourself a general picture of which mistakes you've made but can be easily
rectified with dedicated work.
Make a plan
Once you know where you stand money-wise, it's time to create a plan to pay back
creditors, and remove any inaccurate information on your credit report. This may
require some leg work on your part, so plan on working with creditors on
settlement deals, checking your credit report and contacting your creditors or
credit reporting agencies to remove inaccuracies that you may have found.
Consider your plan like you would a work project: focus, then put your energy
into accomplishing it.
Start small
No one is saying that you need to put all of your savings toward paying off an
old debt to get rid of it. In fact, starting with smaller debts — an old credit
card or small tax bill, for instance - helps you get rid of some of your smaller
mistakes, and can also help provide a sense of accomplishment. Start with the
most manageable issues. That way, you'll have more of a leg to stand on when
negotiating with larger creditors.
Keep it rolling
Once you've made headway on some of your smaller money mistakes, it's time to
get serious. Keep up the good work by taking a look at your current budget and
cutting back spending to free up money for payment of other debts, or making
settlement agreements with other creditors. When you have cash in hand,
creditors may be more willing to settle, but you'll need to be prepared to act
immediately. While it might mean a few months of leaner living, having a clear
conscience and rectifying the mistakes of the past can help you move forward
with your future financial goals.
SETTING AND ACHIEVING PERSONAL GOALS
Trying to improve your finances? Not sure where to start? Whether your goals
involve credit enhancing, refinancing, or saving, you can make this year a
personal best for your credit. Read on for our top credit best practices:
Set Goals:
1. Check your credit report every three months: The first step to robust credit
health is to know which bad financial habits, such as late payments, are
reflected in your credit report. Regular check-ups will also help you guard
against identity theft.
2. Improve and raise your credit score above 650: A credit score above 650 may
help qualify you for credit. The higher your score, the better the interest
rates available to you.
3. Reduce your debt balances to below 35% of your available credit limit:
Reducing your balances while maintaining active credit use makes you more
appealing to prospective lenders and can help improve your credit score.
4. Create a monthly spending plan and stick to it: This simple commitment can
help you start a savings plan and keep you from accruing unmanageable debt.
Update Your Records:
5. Dispute inaccuracies on your credit report: Don't let your credit standing
suffer because of inaccurate information.
6. Most negative records expire from your credit report after 7-10 years. These
accounts have a significant negative effect on your credit rating, so make
sure they are removed from your report at the right time.
7. Consider refinancing: See if refinancing your home or car could save you
money. Investigate your options with a lender.
Plan Ahead:
8. Start putting money into a savings account each month: No matter how much
available credit you have, it can't beat cash in the bank. Setting aside a
fixed amount each month will guarantee funds in the case of emergency while
helping you develop financial discipline.
9. Contribute to your 401(k): See if your company offers matching funds and try
to add the maximum amount allowable for your budget.
This information is for educational purposes only and does not constitute legal
or financial advice. You should always seek the advice of a legal or financial
professional before making legal or financial decisions.
UNPAID MEDICAL BILLS AND YOUR CREDIT REPORT
Unpaid medical bills can cause surprising and serious damage to your credit
report.
It's often a plain and simple case of miscommunication. Your insurance company
and your medical provider are in negotiations over paying a recent hospital
bill. You think it has been paid, or at least should have been, because you have
insurance. The bill is delinquent and then overdue and then sent to collections.
All of the sudden you are stuck with a collections record on your credit report
for 7 years. Not your fault? Think again.
Medical collections are becoming increasingly common. If you are injured and
your insurance company doesn't pay, you can become legally responsible for the
bill. That collections account can stay on your credit report for up to seven
years if you don't prove that it was a factual error. How can you be sure your
credit doesn't end up with a scar? Follow these tips for keeping your credit out
of harm's way:
PREVENTION
Emergency reserve — It's important to have enough money saved to cover your
living expenses for a few months in case you lose your job or unexpectedly land
in the hospital. Medical bills can sometimes add up to unbelievable amounts, so
you may want to also keep a credit card with a high limit reserved for emergency
use.
Be flexible — Flexible Spending Accounts or "Cafeteria Plans" offered through
your employer provide an easy pre-tax way to pay for medical expenses. Ask your
employer about what plan may be included in your benefits. With this system, you
decide how much of your salary to set aside when you sign up for the year. For
example, if you choose to pull out $100 a month for the plan, you have $1,200
you can use for medical bill reimbursements that year.
Power of attorney — If things get really sticky, having a trusted spouse or
family member with legal power of attorney can help. When you are sick in the
hospital, you may not be able to wrestle with the insurance companies and
billing offices on your own. Talk to a financial planner or lawyer to have these
papers drawn up. Be sure that this person understands the responsibilities and
has a copy of your medical insurance policy.
PRESCRIPTION
Get the facts — If you receive a bill you thought was covered, go through your
insurance policy with a fine tooth comb to see what you are really responsible
for paying. These documents can also outline the best procedures for cutting
through the red tape in the billing office. You'll also want to contact the
insurance company and the medical office for more information as soon as you
suspect something is wrong with your bill.
Settle your bills — Even if your insurance company is at fault, you will
probably be better off paying the medical bill yourself before it's sent to
collections rather than continuing to deny the charge. Paying the bill doesn't
mean you have to stop negotiating with your insurance company over the amount,
it just means that you won't also have to negotiate over a collection account on
your credit report.
Righting the wrongs — If the account was sent to collections, avoid "settling"
the bill and try to pay off the amount in full. A fully-paid collections account
is better for your credit than an unpaid or settled account. If your medical
bill was sent to collections in error, you still have options. You can dispute
the record on your credit report if you can prove that the bill was sent to
collections unlawfully (for example — if you were never billed directly for the
amount before it was sent to collections).
THE IMPORTANCE OF UNDERSTANDING INTEREST
It's one thing to know what interest is. It's another to truly understand how
interest works. Understanding interest is so important because it can have a
considerable impact on your entire financial picture.
The most important thing to know about interest is that not all types are
created equal. The way you calculate interest can drastically alter the results.
Taking that into account, let's discuss the two main types of interest:
1. Simple or Nominal Interest
When you learned about interest in school, simple interest was probably the kind
you were first taught. The amount of simple interest is calculated as a
percentage of the principal amount. Put another way, with simple interest, the
principal amount upon which the interest is calculated, is constant.
This is easy to understand when your think about a savings account. Say you
deposit $10,000 with an annual interest rate of 5%. Now let's say you let that
$10,000 sit there for 5 years. What would the new amount be? If you said
$12,500, then you would be correct. Our deposit (the principal) earned $500 (5%
of 10,000) each year for five years. That leaves us with $12,500.
2. Compound Interest
Remember how with simple interest the amount upon which interest is calculated
stayed the same (every year it was based on $10,000)? Well, with compound
interest, that amount continues to accumulate on itself. Compound interest is
calculated based on the principal amount and any past interest earned.1 The
earned interest is simply added to the original principal amount at a
predetermined rate (annually, monthly, etc.).
Compound interest might be better understood by example. Let's look back at our
savings account scenario once again. This time, however, let's say at the end of
each year your earned interest is added back to the original principal amount.
After year 1, just like with simple interest, you would have earned $500 in
interest. This time, though, the difference is that $500 is now added to the
$10,000. So the following year's principal becomes $10,500 and that year's
interest is calculated based on that new figure. This process repeats itself
every year for 5 years. At the end of 5 years, with interest compounding at a
yearly rate, we would actually end up with $12,763, leaving us with $263 more
than simple interest.
$263 is hardly an impressive extra profit, but hold that thought. Let's say you
let that $10,000 sit for 10 years instead of 5. In that case, the simple
interest would leave you with $15,000. On the other hand, compound interest
would leave you with $16,288. That's an extra profit of $1,288! As you can see,
allowing compound interest to build and grow over a longer period of time can
make a big difference.
Just ask Warren Buffett how powerful compound interest can be:
> "My wealth has come from a combination of living in America, some lucky genes,
> and compound interest." — Warren Buffett2
Most of us are not Warren Buffet. The beauty of compound interest, though, is
that anyone can take advantage of its financial power. Whether you have a
mortgage, are repaying student loans, or even depositing money in a bank
account, interest has the power to add to your debt or help build your savings.
Knowing what interest is won't help you truly take advantage. Rather, it's
understanding how it can best work for you.
1 https://www.investor.gov/glossary/glossary_terms/compound-interest
2
http://archive.fortune.com/2010/06/15/news/newsmakers/Warren_Buffett_Pledge_Letter.fortune/index.htm
BUDGETING TIPS TO GET YOUR FINANCES ON TRACK
Do you cringe when you hear the word budgeting? If so, you aren't alone.
Creating a budget requires planning and a lot of work to record all financial
transactions made in a household. It's even more work to keep spending within
the limits of your monthly income.
Some people find it difficult to remember to record each and every item
purchased, while others are surprised when they see how much money they spend on
small things like daily coffee. If you don't use some form of a budget, however,
you run the risk of continually spending more money than you bring home or
spending more money than you realize on things you don't need. You could also be
at risk for missing payments on credit accounts, which may have a damaging
effect on your credit history and score. No matter which financial life-stage
your family is in, it's never too late to create a household budget.
Recording how much of your monthly income goes to pay various bills and expenses
will help you see where you may be spending more money than expected. Cutting
unnecessary expenses frees up cash to increase emergency and long-term savings
or pay down debt faster. Planning monthly spending so it doesn't exceed your
monthly income can prevent you from turning to credit cards or loans to cover
your regular monthly bills. Sticking to a budget can also help families, who
would otherwise scramble to find the cash, to make their monthly mortgage or
loan payments on time.
SET UP A BASIC BUDGET
Record your net monthly family income which is your total income from all
sources less taxes, and other deductions from your gross wages. Then, list each
bill, loan and credit account payment, as well as variable expenses that change
from month to month, such as grocery spending, entertainment and restaurant
costs. Remember to include a monthly contribution to savings in your expenses.
If your expenses are greater than your monthly income, you'll need to find ways
to increase your income, decrease your expenses, or both.
AVOID BUDGETING PITFALLS
Families can find it difficult to stick to budgets that don't include rewards
for careful money management. When you set up your budget, include a monthly
amount to fund inexpensive activities or outings, such as monthly movie and
dinner nights, concerts or sporting events, or longer-term goals, such as annual
family vacations.
Another common budget problem is forgetting to record daily spending. Small
expenditures can add up over the month and are difficult to track down weeks
after they've occurred. Avoid this problem by setting aside a monthly cash
amount or allowance to family members to spend as they like.
This information is for educational purposes only and does not constitute legal
or financial advice. You should always seek the advice of a legal or financial
professional before making legal or financial decisions.
HOW TO REBUILD YOUR SAVINGS
Sometimes no matter how much planning you do, your savings strategy goes awry.
You can, however, rebuild your savings after a financial downturn. The key to
rebuilding a drained savings account or a depleted retirement account is to
start again, as soon as you can, and not wait for some "extra" money to come
rolling in from a mysterious source. You have the ability to rebuild your safety
net and give yourself peace of mind.
REVISE YOUR BUDGET
Although you may have just survived a financial downturn due to unemployment or
an unexpectedly large expense, now isn't the time to spend freely.
* Revise your budget to account for a changed income or to include a payment
plan for a large medical or home repair expense.
* Cut back on frivolous spending. Reconsider your 300 cable channels, the
latest gadget, going out to dinner five times a week or a new handbag every
month. Distinguish between need and want and you may discover some extra
money in your budget.
Your parents were right. Sometimes you have to make do with what you already
have, including your current income. You can try to rebuild your savings when
you pay yourself first. Here's how:
* Invest in your company's tax-deferred 401(k) plan. This will help you build a
retirement fund over time. It will also lower your taxable income which may
result in a lower tax rate for you. If your company matches your
contribution, this will boost your retirement savings even further.
* Consider an IRA account. If you don't have access to a company-sponsored
401(k) plan, consider a Roth or traditional individual retirement account
(IRA). Just finding an extra $30 a week in your budget could make this a
reality.
* Set up automatic deposits to a savings account. You may already have your
mortgage or other bills set up to be paid automatically through your checking
account, but what about your savings account? Pay your savings account
monthly just like any other bill you receive.
SPEND EXTRA MONEY WISELY
Extra money can sometimes find its way to you in the form of a pay raise, an
income tax refund, a small inheritance, a work bonus or income from a side job.
Consider using this extra money to pay yourself, not treat yourself.
* Increase your 401(k) contribution if you receive a pay raise.
* Stash refunds or bonuses into a savings account or your IRA.
TRACK YOUR CREDIT SCORE
You've worked hard to pay down debt and rebuild your savings. Don't let the
unknown sneak up on you. Keep an eye on your credit score as part of a routine
to manage your financial well-being.
This information is for educational purposes only and does not constitute legal
or financial advice. You should always seek the advice of a legal or financial
professional before making legal or financial decisions.
Life Events
* Wait…Student Debt Can Help Me?
* Credit Cards and College Students — A Good Match?
* Buying Your First Car: What You Need to Know
* Give to Charity: A Win-Win at Tax Time
* Plan Financial Management Reviews at Each Life Stage
WAIT…STUDENT DEBT CAN HELP ME?
Over the past few decades, the cost of attending college in the United States
has skyrocketed. Not surprisingly, the use of student loans to help pay for this
higher cost has also increased quite dramatically. This has left a large portion
of the population, especially the Millennial generation, with a substantial
amount of debt just as they are entering the workforce. This phenomenon may end
up weighing on the U.S. economy for decades to come. However, on an individual
level, might there be a silver lining for all of those student borrowers? The
answer: potentially.
The fact is no one wants student debt, but if you have to take out a loan, it
provides an opportunity to start recording a solid payment history. According to
VantageScore™, student loans can positively impact your credit score because
generic models, like the VantageScore® 3.0 credit score, "reward a history of
on-time payments as it demonstrates the ability to manage credit."3
Here's an example. Let's say that Joe Student finished college with $30,000 in
student debt. Let's also say Joe is paying this back over a ten-year period at a
5% interest rate. Roughly speaking, Joe will likely be making monthly payments
of around $300. As long as Joe makes his payments on time, he is on his way to
enhancing one of the most vital factors when it comes to a healthy credit score,
a strong payment history.
Why is Joe's payment history potentially so important for his credit health?
Because creditors look for borrowers who have shown a history of making
consistent and timely payments. Should Joe choose to apply for a mortgage a few
years down the road, Joe's history of paying back his student loans in a
responsible manner may be useful when negotiating for more appealing terms.
Now, let's use that same scenario but say that Joe decided to ignore his
scheduled repayment plan or never reached out to his student loan creditor to
negotiate a more reasonable, income-based plan. Depending on how long Joe's
neglect lasts, his silver-lining opportunity could turn into a negative
situation for his credit health. Just as Joe could have built a strong history
of consistent and timely payments, he has done the opposite in this scenario.
He's built a history of inconsistent and unreliably-timed repayment.
In the end, carrying a load of student debt may weigh on your finances. However,
student borrowers should also realize that borrowing presents an opportunity to
establish a strong payment history. In the long run, student debt may pave the
way for more manageable credit terms down the road.
This information is for educational purposes only and does not constitute legal
or financial advice. You should always seek the advice of a legal or financial
professional before making legal or financial decisions.
3A Lesson Plan to Understanding Credit Scores. New Haven, CT: VantageScore,
2012. Print.
CREDIT CARDS AND COLLEGE STUDENTS — A GOOD MATCH?
You've seen the ads and been tempted by the giveaways — but how much do you
really know about credit cards? Wading through offers to find a credit card that
suits your student lifestyle can be tricky. If you know a little about how
credit works and your options, you can start building your credit on the right
foot. Here's a crash course in credit cards:
Statistics — The Credit Card Act of 2009 slowed credit card use by college
students by banning card approvals for anyone under 21 years old, unless they
have an adult co-signer or can prove they have sufficient income to pay the
bills. Yet according to a survey by student loan provider Sallie Mae, students
still manage to accrue credit card debt. The average balance among college
students in 2013 was $499. By grade level, sophomores carry the lowest average
balance while freshmen and seniors carry the highest. Now that you know the
credit stats, let's move on to some of the details.
Economics — Think you're ready for a credit card? Opening a credit account has
its benefits: you'll have access to emergency funds, you can start building your
credit and your purchases may be protected under some credit cards if damaged or
stolen. It also has its dangers: you can easily rack up serious debt, interest
rates can run high and you might damage your credit if not careful. Opening a
credit account is only a good idea if you are sure you can use it responsibly.
Accounting — How can you find the card that is right for you? There are four
major factors to take into consideration when looking at credit card offers:
* Card Type — Credit cards come in all sorts of shapes and sizes. If you don't
qualify for an ordinary credit card, investigate secured credit cards that
use a savings account as collateral.
* Annual Percentage Rate (APR) — As a student your interest rates will probably
range between 10-18% percent. This is higher than the rates an established
borrower would receive but better than the rate for people with poor credit
histories. Read the APR offer closely to see what the terms are for the
introductory rate. The lower the rate, the less your credit spending will
cost.
* Annual Fees — Most standard credit cards don't come with annual fees. ? Some
premium or reward cards, such as airline mileage cards, charge annual fees.
Look at the small print disclosure to see if your card has an annual fee.
Also look for late fees, transaction fees and over-limit fees.
* Grace Period — The grace period on a credit card is the amount of time
between when you make a purchase and when interest is applied to the
purchase. For many cards, the interest-free grace period is around 25 days.
History — Once you start using your new card, it's a good idea to check your
credit history to see if the account is being recorded correctly. Your credit
reports from TransUnion, Equifax and Experian should have accurate information
about the account's name, open date, balance, monthly payment and credit limit.
After a few months you'll want to check again to make sure your payment history
is being reported properly. Late payments can damage your credit score for up to
7 years, and can lead to problems receiving new credit in the future.
Philosophy — The lethal student combination of limited income and a lot of
opportunities for spending makes it easy for young credit card users to end up
in deep debt. Using your new credit card to pay a regular monthly expense (like
gasoline or cable) is a good way to start. You'll know what to expect from your
bill and can pay it in full each month. Having a conservative credit philosophy
will help you graduate with your debt under control.
BUYING YOUR FIRST CAR: WHAT YOU NEED TO KNOW
Buying your first car is considerably more expensive than the sticker price
reveals. Prepare yourself for the unavoidable expenditures that come along for
the ride.
Buying your first car? Congratulations! Before you plan your first road trip,
though, there are several important financial factors to consider as you prepare
to purchase this big ticket item.
NOT JUST THE STICKER PRICE
Buyer, beware. The sticker price posted on the window at any auto dealership, or
even the listed price of a private sale, is actually considerably less than what
you will need to pay to get your car on the road. Taxes and fees can vary
depending upon the state in which you live, but there are some common threads
that add up to unavoidable expenditures.
You should be prepared to pay sales tax on the vehicle before you ever pull out
of the dealership's parking lot. Your sales consultant will calculate this tax
based upon the current rate in your state and will include it in your bottom
line. The dealership will then submit the tax payment to the state government
directly.
TAXES, TAXES, TAXES
Many states also assess an excise or personal property tax based on the book
value of your vehicle. This tax is assessed and collected annually and is
generally not included as part of the fee package charged by your dealership. Be
prepared to receive this bill at a later date.
REGISTRATION, LICENSE PLATE AND INSPECTION FEES
Speaking of your state government, it will also want to make sure your car has
been safety inspected, is registered and easily identifiable — all at additional
cost to you. Many dealerships, especially new car dealerships, will manage the
trip to the Registry (or Department) of Motor Vehicles for you. You'll see your
registration and license plate fees appear in the breakdown of charges on your
invoice. Find out in advance if your dealership handles this end of the deal.
Most states allow you a certain number of days within which the vehicle must be
registered before penalties apply, so you'll need to plan ahead if you'll be
completing this task yourself.
Even if your new ride has just rolled off the assembly line, you may be required
to have the vehicle inspected by a licensed garage. Most states require an
annual inspection. The garage will inspect all the lights and other safety
features, plus run an emissions test before stickering your car. Your inspection
sticker is good for a year and also must be completed within a set period of
time after purchase. For specifics in your state, check with your dealership.
THE BASICS
If you are buying your first car because you're just getting a driver's license
for the first time, this is an expense to consider, as well. Your written and
road tests usually carry a charge separate from paying for the driver's license
itself. As you finalize your budgeting, factor in the cost of general
maintenance and scheduled servicing, such as oil changes and tire rotations. And
of course, gas is a regular expense! Be certain you've selected a car that not
only meets your budget, but also is efficient enough to meet your needs.
GIVE TO CHARITY: A WIN-WIN AT TAX TIME
There are many reasons to give to charity. The first, of course, is to lend your
support to a cause in which you believe. But many people don't realize that
donating to charity is a win-win situation at tax time.
IT COULD BE DEDUCTIBLE!
Many people take the standard deduction on their 1040s. The current standard
deduction parameters allow $12,600 for couples filing jointly or $6,300 for
individuals. If your tax deductible spending is higher than allowed under the
standard deduction, it's a good idea to fill out Schedule A and itemize further
deductions. This is where those donations to charity may put cash back in your
pocket.
QUALIFIED CHARITABLE ORGANIZATIONS
Before you give, you may want to find out if your charity of choice is a
qualified charitable organization. This means that the charity has registered
with the government and has been designated a 501(c)(3) organization. If so, you
can deduct your donations. Some smaller charities, such as individual churches
may not be required to file for 501(c)(3) status but donations to them may also
be tax deductible.
Donations to individuals, political campaigns and foreign charities don't
generally fall under the umbrella of qualified organizations. If you are unsure
about a group's status, search the IRS website to find out if they're qualified.
KEEP YOUR RECEIPTS
In order to claim charitable deductions on your tax return, you'll need to have
receipts from the charity on hand, noting the date and dollar amount of each
donation. Canceled checks or credit card statements verify your claims as well.
In the event that you have donated goods to the charity, such as gently used
clothing, books or household goods, you'll have to generate a fair market value
for the items donated and have your figure validated by the charity. If the
total value of your non-cash contributions is greater than $500, be prepared to
file a Form 8283 along with your 1040 and Schedule A.
While you don't have to mail in your receipts with your tax return, be careful
to maintain them with your records. In the event of an audit, these receipts
will be critical in proving that your deductions are valid.
HOW IT'S DONE
Schedule A of the IRS Form 1040 is fairly user-friendly. Lines 16 through 19
apply to those who give to charity. You will enter your cash contributions,
non-cash contributions, any carryover you may have from a prior year (a less
common situation) and the sum of your charitable deductions. This amount will be
tallied on the Schedule A, along with other deductions you are entitled to, and
deducted from your gross income before your tax is calculated.
Lending your support to a cause you believe in and saving at tax time…talk about
a win-win situation!
PLAN FINANCIAL MANAGEMENT REVIEWS AT EACH LIFE STAGE
Do you wonder if you're doing the right things with your finances? Perhaps you
don't know where to focus your attention. As we move through adulthood, we pass
through several financial life stages and make budget, debt and investing
choices. Understanding where you are and which financial management activities
commonly occur at your life stage can help you meet your goals.
College
Young adults attending college often need time to adjust to being in charge of
their own finances. Between applying for student loans and credit cards, and
struggling with budgeting on a student income, college students may find it
difficult to balance cash flow. Establish good credit habits, such as paying
credit card bills on time, staying out of overdraft on bank accounts, and
keeping your credit balances below their limits. It can take years to improve a
negative credit history, so start strong and do your best to keep your credit
healthy!
First Job
Graduating from college and entering the workforce brings new financial
management challenges, such as making regular student loan payments. Once you
are employed, you may want to apply for a car loan or increase your credit card
limit. Now is also the time to start a savings program. As you earn promotions
or raises, start contributing to short and long-term savings, especially an
emergency fund. Continue to make all payments on time and review your credit
file annually to verify the information is correct. In the near future, you may
need a mortgage loan, and good credit could help qualify you for a lower
interest rate.
Establishing a Home and Family
Marriage, children, and home ownership make this a busy life stage. Budgeting
for household bills, loan payments, emergency savings, education savings, and
retirement planning often requires careful financial management. Take time now
to fine-tune financial plans. Inquire about life insurance to protect your
family members from financial pressure should anything happen to you. As you
apply for joint credit products, remember that you and your partner are equally
responsible for repaying jointly borrowed money. Negative credit will affect
both of your credit files.
Wealth-Building
If you have managed your credit responsibly to this point, your credit file and
score may work in your favor. Continue to check your credit annually. A good
credit score may help you get reduced interest rates on a mortgage refinance or
limit increases. While your equity and savings grow, your debt and outstanding
credit balances should be declining.
Retirement
For many people, an ideal retirement includes spending time with loved ones,
pursuing travel and other leisure activities. Even if your borrowing activity
slows in retirement, continue to check your credit report annually. Identifying
any out-of-the-ordinary activity, such as inquiries from unknown companies or
people, can alert you to potential issues such as attempted identity theft.
Identity & Safety
* Fraud Victim Checklist
* Spotting Identity Theft Signs
* The Difference Between a Fraud Alert and a Credit Freeze (also known as a
Security Freeze)
* Five Powerful Ways to Protect Against Identity Theft
* Keep Your Credit Safe While Traveling
FRAUD VICTIM CHECKLIST
In 2015, 13.1 million Americans were identity fraud victims?. That's a new
victim every two seconds. Education is critical to fast recovery. Once you
realize that you are a victim of fraud, you'll want to act quickly to minimize
potential damage. We recommend you start by contacting necessary government,
banking and credit agencies to ensure they're aware of the crime and to put a
stop to any ongoing theft.
Review the following tips and procedures to help resolve any issues with your
creditors, remove inaccurate information from your credit report and prevent
further fraud.
PROTECT YOUR CREDIT REPORT IMMEDIATELY
* Add a Fraud Alert to your credit report to warn potential credit grantors
that you may be a victim of identity theft — online, right now.
* Consider placing a Security Freeze on your TransUnion Credit Report.
* Placing a security freeze on your credit report will stop lenders and others
from accessing your TransUnion Credit Report entirely, which will prevent
them from extending credit. You can do this online, right now.
OBTAIN AND REVIEW A COPY OF YOUR CREDIT REPORT
* Review your TransUnion Credit Report and check for any unauthorized activity.
Should suspicious activity show up on your report, contact the creditors and
question the account and/or inquiry. Also, take full advantage of your credit
monitoring solution, as well as any features that allow you to lock your
report long-term.
* If you have questions, contact us and/or the other major credit reporting
companies, Equifax and Experian.
REPORT FRAUD TO THE AUTHORITIES
* Contact government agencies, such as the Federal Trade Commission (FTC), to
report fraudulent activity. You should also contact your local law
enforcement agency to file a report. Download the FTC's Universal Fraud
Affidavit.
* Contact your credit grantors and financial institutions.
* Connect with companies with whom you have financial relationships and inform
them that your accounts may be compromised. Banks and credit card companies
may issue new cards and PINs to protect your assets, and will work to
identify and rectify any unauthorized charges.
* Notify your bank to stop checks, if needed. You can also report stolen
checks.
* Contact any companies on your credit report that you do not recognize. Verify
the information they have in their records for the reported item.
* Provide the companies with a copy of your police report, notarized FTC
Affidavit and other relevant documentation.
* Keep a log of all related phone conversations, including the names of people
with whom you speak.
FOLLOW-UP IS KEY
* Stay in touch with the companies and agencies you have contacted to ensure
that their investigations resulted in your favor. TransUnion's FVAD will
assist, but remember that as a victim, you are ultimately responsible for
working with credit grantors to remediate fraudulent accounts.
* Periodically review your credit report. Check for any new fraudulent
activity. Consider using features such as TransUnion Credit Lock, for ongoing
protection.
Visit www.transunion.com for more information.
Javelin Strategy & Research
SPOTTING IDENTITY THEFT SIGNS
Knowing identity theft signs can help you protect yourself from this crime.
While identity theft is always difficult, if it's caught early, you can minimize
its damage to your reputation and financial health. Unfortunately, some people
don't realize that their credit, medical or even criminal records contain
inaccuracies caused by the activity of identity thieves. Credit identity thieves
use your personal information to apply for credit in your name, leaving you to
deal with angry creditors and collectors.
HERE ARE SOME COMMON INDICATORS OF IDENTITY THEFT:
* Unfamiliar activity on your credit reports: Regularly monitor your credit
reports to look for new and unfamiliar accounts. If you see that unauthorized
or unfamiliar activity has occurred, contact the credit bureau that issued
the report right away.
* Unexpected charges on your credit or bank account statements: Don't toss your
bank and credit card statements without reviewing them. Review each charge
and call your bank or credit card company to question any purchase that you
don't recall making.
* Letters or phone calls from unfamiliar creditors or bill collectors: If you
start getting phone calls and letters from unknown creditors or bill
collectors, take action. An identity thief has likely used your identity to
open accounts and make purchases, leaving you with the bills. Children and
the elderly can also be targets of identity thieves that operate in this way,
so look out for similar communications to your children or to relatives in
your care.
* Inability to access online accounts: If you suddenly can't access bank or
credit card account websites, contact your financial institutions immediately
by phone. Someone may have stolen your passwords in an attempt to take over
your accounts.
If you notice these identity theft signs, contact your local law enforcement
agency and file a report. You should also notify credit bureaus, credit card
companies and banks to inform them about your situation, reverse any charges and
remove inaccurate information. As a precaution, you may also want to place a
fraud alert or security freeze on your credit reports, which provides you with
additional layers of protection against an identity thief.
THE DIFFERENCE BETWEEN A FRAUD ALERT AND A CREDIT FREEZE (ALSO KNOWN AS A
SECURITY FREEZE)
FRAUD ALERT
A Fraud Alert is a cautionary flag, which is placed on your credit file to
notify lenders and others that they should take special precautions to verify
your identity before extending credit. When you place a Fraud Alert, you can
provide a mobile or other phone number for lenders to contact you to verify that
the party applying for credit is actually you, not a fraudster.
When you place a Fraud Alert on your credit report with any one of the three
major credit reporting companies, that company will notify the other two and
fraud alerts will also be placed on those files as well. An Initial Fraud alert
lasts for 90 days and may be renewed. Fraud Alerts are available at no charge to
consumers who believe they may be victims of identity theft.
SECURITY FREEZE (ALSO KNOWN AS CREDIT FREEZE)
A Security Freeze is a more dramatic step in protecting your credit. Placing a
Security Freeze will prevent lenders and others from accessing your credit
report entirely, which will prevent them from extending credit. With a Security
Freeze in place, you will need to take special steps when you wish to apply for
any type of credit.
Because of more stringent security features, you will need to place a Security
Freeze separately with each of the three major credit reporting companies if you
want the freeze on all of your credit files. A Security Freeze remains on your
credit file until you remove it or choose to lift it temporarily when applying
for credit or credit-dependent services.
FIVE POWERFUL WAYS TO PROTECT AGAINST IDENTITY THEFT
Identity theft has become a prominent-enough problem that most people know they
need to protect against it. The question is: how? Unfortunately there is no
foolproof plan that can completely guarantee the safety of your identity.
However, there are steps individuals can take. Here are five great precautions
to help guard against identity thieves:
1. Protect your Social Security Number (SSN) like a Mama Bear.
Your SSN is "Need to Know" information. This means that you only give it out
when ABSOLUTELY necessary. In addition, use your common sense. If the party
asking for your SSN seems untrustworthy or if it doesn't seem like they
should need to know this information, then don't give it out.
2. When it comes to online passwords, randomness is the key.
In a perfect world, we could all just use our mother's maiden name or high
school mascot as a universal password for everything. Unfortunately, we live
in an imperfect world. In today's society, thieves can easily find out this
type of personal information. According to the Federal Trade Commission, a
good rule of thumb is to keep it to an as-random-as-possible mix of letters,
number and symbols. That way, it will be more difficult to crack.
3. Keep an eye on your credit card accounts.
No, you don't need to memorize every purchase or know exactly what your
balance is at all times. However, you should be able to look at your credit
card statement and account for every purchase. If something seems incorrect,
immediately contact the issuer. Better to be on the safe side.
4. Stay on top of your credit.
Make sure your credit reports show accurate information. Signing up for a
credit monitoring service is a great way to receive alerts regarding any
credit report changes. Handle it similarly to how you analyze your credit
card statement: if you notice any inaccurate or unfamiliar information in
your credit report, you should contact the creditor or file a dispute with
all three major credit bureaus (TransUnion, Equifax, Experian).
5. Don't carry every important document in your wallet/purse.
Although your wallet/purse may seem like a convenient and secure place to
keep your Social Security card, birth certificate, or passport, doing so is
a good way to misplace or even lose these valuable items. This information
may be as good as gold to identity thieves. Identity theft can take years to
overcome. Developing good habits in protecting your personal information
will go a long way toward lowering the risk you'll have to undergo a lot of
unnecessary stress and hassle. You can help achieve peace of mind by putting
the above five steps into practice, starting today.
Sources:
OnGuard Online (U.S. Federal Trade Commission); http://www.onguardonline.gov
KEEP YOUR CREDIT SAFE WHILE TRAVELING
Whether you're planning a trip to Las Vegas or Venice, including a few financial
arrangements in your preparations will help keep your credit reports safe — and
your mind free of worries — while you are away:
1. Guard against mix-ups. Call your credit card issuers to notify them before
you leave on a vacation, especially if you are traveling outside the U.S. If
your banks and card issuers know that you are traveling, they are less
likely to mistakenly block your access to the account when charges from
unusual locations appear.
2. Make photocopies of important documents. Having copies of your credit cards,
driver's licenses and passports will make the replacement process much
faster if you lose something important while traveling. Add a list of
emergency contacts to this folder including the phone numbers of your
doctor, banks and family members. Leave a set of these documents at home
with a friend and store one in a separate piece of luggage.
3. Avoid late payments. Plan ahead so you won't miss any bill payments while
you are away. Online bill payment systems make it easy to schedule a payment
in advance. A little preparation can help you avoid expensive late charges
and unnecessary damage to your credit.
4. Keep an eye on your identity. Guard against fraud by asking the Post Office
to put a vacation hold on your mail and be careful where you use your credit
card. Check the activity on your financial statements and your credit
report(s) closely when you return, to make sure they are accurate.
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