The following guide will give you the tools to dispute inaccuracies, clean up outstanding derogatory credit, and then prepare you to rebuild your credit. Within a reasonable amount of time, you should be able to improve your credit situation to qualify for credit cards, installment loans, and even a mortgage.
You can call the bank and ask it to turn off bounce protection on your debit card transactions, but you may not be able to do so for automatic payments or checks. If thats the case, you may want to discontinue automatic payments until you get a better handle on your finances.
Another option, if you want to continue with automatic payments, is to sign up for true overdraft protection. This is less expensive than bounce protection and taps your savings or a line of credit if an automated expense exceeds your balance.
Automatic payments are a great way to make sure your bills are paid and that you dont incur late fees. Automatic payments also can protect your credit, since skipped payments on credit cards and loans can devastate your scores.
But you have to be able to keep a pad of cash in your checking account or have low-cost overdraft protection. If you cant, automatic payments can cause more problems than they solve.
Keeping your 401(k) money
Dear Liz: I had to resign from my job as a phlebotomist at a hospital. Did I lose the money that was in my 401(k) or do I still have it? How do I find out?
Answer: Any money you contributed to a 401(k) is yours.
Money contributed by your employer may be subjected to vesting rules that could limit how much you can keep. Company matches may vest over time, giving you access to a portion of whats contributed each year, or they may vest after a certain number of years, giving you access to all the money.
Say your match vests at 20% each year starting with the second year. You would get nothing if you quit after the first year. After the second year, you would get 20% of the match balance (the companys contribution thus far plus or minus any gains). After the third year, you would get 40% of the match balance, and so on until you are entitled to 100% of the match balance after the sixth year.
You should contact your companys human resources department to find out what your options are for your account. You may be able to leave it where it is to grow, which may be your best option until you find another job.
At that point, your next employer may allow you to roll the account into its retirement plan. If you cant keep the money where it is, open an IRA and have the 401(k) provider send the check directly there.
What you dont want to do is withdraw the money, since youll lose a big chunk to taxes and penalties. Even having the check sent to you to deposit into the IRA is a bad idea, since 20% will be withheld, and youll have to come up with that cash from another source to avoid taxes and penalties.
Questions may be sent to Liz Weston, 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the Contact form at asklizweston.com. Distributed by No More Red Inc.
Additionally, it can sometimes be a smart spending strategy to get a new credit card during the holiday shopping season, because rewards, sign-up bonuses and promotional financing offers can increase the value of spending you already planned to do. With just about a month left before the holiday shopping season gains momentum, here are a few steps you can take now to improve your credit for the short-term and keep your credit healthy in the coming months.1. Check Your Credit Scores
Whether your holiday spending plans involve opening up a new credit card or taking measures to protect your credit, the first thing youll want to do is see where your credit scores stand. You can get two free credit scores on Credit.com, and, in your credit report summary, youll see what areas of your credit are helping (or hurting) them. For instance, you may see you have a high number of credit inquiries -- a sign you may not want to apply for additional credit during the holidays. (Youre also entitled to copies of each of your three credit reports for free each year from AnnualCreditReport.com.)2. Ask for a Credit Limit Increase
To be clear, just because people tend to charge more during the holidays doesnt mean its a good reason to spend more than you can afford. Given the high interest rates on credit cards, a little overspending can take months to repay and cost you hundreds -- potentially thousands -- of dollars in interest.Find a Credit Card Thats Right for YouEasily compare 100's of cards and find the one for you; choose by rewards, APR, annual fee, credit score, and more!
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That being said, if youve budgeted for the increase in spending and plan to put it on credit cards, you need to be careful about how high you push your credit card balances. One of the biggest factors affecting your credit scores is your credit utilization (how high your balances are relative to your credit card limits). To keep your credit scores in good shape, many experts recommend using less than 10% of your available credit.
If holiday spending is likely to increase your credit card balances (even just for a short time), you may want to consider asking your credit card issuer for a credit limit increase. That will give you room to spend a little bit more without driving your credit utilization too high. Keep in mind, a limit increase request may result in a hard inquiry on your credit report, which can ding your credit score.3. Pay Down Your Debt
After youve checked your credit, you may see that high loan balances or a high credit utilization rate is already hurting your scores. If thats the case, you may want to focus on paying down those balances as much as you can leading up to the holidays --particularly if youre planning to apply for a new credit card and want to improve your scores before applying.4. Set a Budget
Part of preparing your credit for the holidays involves protecting your scores from the damage of future debt, but if you havent made a plan for your holiday spending, you may be in danger of overspending in the next couple months. That could lead to higher credit card balances, which could hurt your credit scores.
Now is a great time to plan how much you can spend during the holidays (and how much you need to save in the coming weeks to afford that). Remember to factor in expenses like travel, gifts, social gatherings, party hosting and any other costs that you incur only around the holidays.5. Stay the Course
Sometimes, the best thing you can do for your credit scores is have patience. If your credit scores are in good shape at the moment, keep paying your bills on time, keep your credit card balances low and dont apply for new credit (until its time to go for that 0% promotional financing offer youre planning to use). Maintain these habits through the holidays, and you may see your credit scores stay about the same or, even, improve as the months pass.More Money-Saving Reads:
- What's a Good Credit Score?
- What's a Bad Credit Score?
- How Credit Impacts Your Day-to-Day Life
We still can't get that crazy-catchy Thrift Shop beat of a couple of years ago out of our heads. Rapper Macklemore had everybody thinking about heading to the closest pre-worn clothes emporium to pop some tags--a kind of hipster field trip step-up from the pursuit of dumpster diving chic.
Macklemore famously sang that he had "twenty dollars in my pocket" before he headed off to the used clothes depot. And using cash for his shopping probably would have saved him from cybercriminals that recently targeted credit card data from the Americas Thrift Stores chain that operates at 18 locations in Alabama, Georgia, Mississippi, Louisiana and Tennessee.
Ken Sobaski, the company's chief executive officer, said that a malware-driven security breach had targeted software used by a third-party service provider and that the cyberattack was traced to criminals from Eastern Europe.
The CEO said the "US Secret Service tells us that only card numbers and expiration dates were stolen. They do not believe any customer names, phone numbers, addresses or email addresses were compromised. This breach may have affected sales transactions between September 1, 2015 and September 27, 2015."
The company posted a FAQ on the breach which said the malware had been removed and no longer posed a threat. It also said it had hired independent forensic investigation company Sikich--which it noted is certified by the Payment Card Industry Security Standards Council--to help it assess the situation.
And the lessons learned? Even a humble thrift store may be the target of cybercriminals and always use cash at the thrift store as it will both protect your credit cards and prevent you buying too many Rayon Hawaiian shirts. But you just might want to break out the card for that dogs playing poker painting.
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