Monthly Archives: April 2017

Improve Your Credit Score

If you need to boost your credit score, it won’t happen overnight.

A credit score isn’t like a race car, where you can rev the engine and almost instantly feel the result.

Credit scores are more like your driving record: They take into account years of past behavior you can find on your credit report, not just your present actions.

1. Watch those credit card balances

One major factor in your credit score is how much revolving credit you have versus how much you’re actually using. The smaller that percentage is, the better it is for your credit rating.

The optimum: 30 percent or lower.

To boost your score, “pay down your balances, and keep those balances low,” says Pamela Banks, senior policy counsel for Consumers Union.

If you have multiple credit card balances, consolidating them with a personal loan could help your score.

What you might not know: Even if you pay balances in full every month, you still could have a higher utilization ratio than you’d expect. That’s because some issuers use the balance on your statement as the one reported to the bureau. Even if you’re paying balances in full every month, your credit score will still weigh your monthly balances.

One strategy: See if the credit card issuer will accept multiple payments throughout the month.

2. Eliminate credit card balances

“A good way to improve your credit score is to eliminate nuisance balances,” says John Ulzheimer, a nationally recognized credit expert formerly of FICO and Equifax. Those are the small balances you have on a number of credit cards.

The reason this strategy can boost your score: One of the items your score considers is just how many of your cards have balances, says Ulzheimer. He says that’s why charging $50 on one card and $30 on another instead of using the same card (preferably one with a good interest rate), can hurt your credit score.

The solution to improve your credit score is to gather up all those credit cards on which you have small balances and pay them off, Ulzheimer says. Then select one or two go-to cards that you can use for everything.

“That way, you’re not polluting your credit report with a lot of balances,” he says.

If you can’t afford to pay these small balances off at once, moving them to a balance transfer credit card might help.

3. Leave old debt on your report

Some people erroneously believe that old debt on their credit report is bad, says Ulzheimer.

The minute they get their home or car paid off, they’re on the phone trying to get it removed from their credit report, he says.

Negative items are bad for your credit score, and most of them will disappear from your report after seven years. However, “arguing to get old accounts off your credit report just because they’re paid is a bad idea,” he says.

Good debt — debt that you’ve handled well and paid as agreed — is good for your credit. The longer your history of good debt is, the better it is for your score.

One of the ways to improve your credit score: Leave old debt and good accounts on as long as possible, says Ulzheimer. This is also a good reason not to close old accounts where you’ve had a solid repayment record.

Trying to get rid of old good debt “is like making straight A’s in high school and trying to expunge the record 20 years later,” Ulzheimer says. “You never want that stuff to come off your history.”

4. Use your calendar

If you’re shopping for a home, car or student loan, it pays to do your rate shopping within a short time period.

Every time you apply for credit, it can cause a small dip in your credit score that lasts a year. That’s because if someone is making multiple applications for credit, it usually means he or she wants to use more credit.

However, with three kinds of loans — mortgage, auto and more recently, student loans — scoring formulas allow for the fact that you’ll make multiple applications but take out only one loan.

The FICO score, a credit score commonly used by lenders, ignores any such inquiries made in the 30 days prior to scoring. If it finds some that are older than 30 days, it will count those made within a typical shopping period as just one inquiry.

The length of that shopping period depends on the credit score used.

If lenders are using the newest forms of scoring software, then you have 45 days, says Ulzheimer. With older forms, you need to keep it to 14 days.

Older forms of the software won’t count multiple student loan inquiries as one, no matter how close together you make applications, he says.

“The takeaway is, don’t dillydally,” Ulzheimer says.

5. Pay bills on time

If you’re planning a major purchase (like a home or a car), you might be scrambling to assemble one big chunk of cash.

While you’re juggling bills, you don’t want to start paying bills late. Even if you’re sitting on a pile of savings, a drop in your score could scuttle that dream deal.

One of the biggest ingredients in a good credit score is simply month after month of plain-vanilla, on-time payments.

“Credit scores are determined by what’s in your credit report,” says Linda Sherry, director of national priorities for Consumer Action. If you’re bad about paying your bills — or paying them on time — it damages your credit and hurts your credit score, she says.

That can even extend to items that aren’t normally associated with credit reporting, such as library books, she says. That’s because even if the original “creditor,” such as the library, doesn’t report to the bureaus, they may eventually call in a collections agency for an unpaid bill. That agency could very well list the item on your credit report.

Putting cash into a savings account for a major purchase is smart. Just don’t slight the regular bills to do it.

6. Don’t hint at risk

Sometimes, one of the best ways to improve your credit score is to not do something that could sink it.

Two of the biggies are missing payments and suddenly paying less (or charging more) than you normally do, says Dave Jones, retired president of the Association of Independent Consumer Credit Counseling Agencies.

Other changes that could scare your card issuer (but not necessarily hurt your credit score): taking cash advances or even using your cards at businesses that could indicate current or future money stress, such as a pawnshop or a divorce attorney, he says.

“You just don’t want to do anything that would indicate risk,” says Jones.

7. Don’t obsess

You should be laser-focused on your credit score when you know you’ll soon need credit. In the interim, pay your bills and use credit responsibly. Your score will reflect these smart spending behaviors.

Are you getting ready to make a big purchase, such as a home or car? At least a few months in advance, have a look at your credit score, Consumer Action’s Sherry says.

While the score that you get through your bank or a service may not be the exact same one your lender uses, it will grade you on many of the same criteria and give you a good indication of how well you’re managing your credit, she says. It will provide you with specific ways to improve your credit score — in the form of several codes or factors that kept your score from being higher.

Know Best And Real Work at Home Jobs

Searching for jobs, particularly home-based work, used to be a matter of scanning the Sunday classifieds for offers to get rich quick by stuffing envelopes. Now, working from home is easier than before because exposure to at-home opportunities has multiplied.

A wide variety of job ads are just a click away, but so are the scams.

In 2007, when Rat Race Rebellion — a company that helps people find home-based work — began tracking at-home jobs, there were 30 scams for every legitimate opportunity. Now, with 4,500 to 5,000 work-at-home job ads screened weekly, the website finds 60 phonies for every one that’s for real, says Christine Durst, co-founder and principal of Staffcentrix LLC, the company that owns and manages RatRaceRebellion.com.

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Nevertheless, there’s no shortage of workers who dream of beating the odds and earning a living from home.

Durst, whose company Staffcentrix develops home-based and virtual career training programs, says those interested in work-at-home jobs primarily are:

  • Parents who say they want to spend more time with their children.
  • Trailing military spouses who, according to Durst, by virtue of their spouse’s career need to pick up and move every few years.
  • Retirees needing supplemental income.
  • People with disabilities.

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It’s not easy to be a good parent and simultaneously work well at home, says Durst, because most jobs require blocks of uninterrupted time to complete tasks, and children’s schedules are less than predictable. For those who do choose to walk the tightrope between paid work and parenting, consider deadline-oriented work. Durst says it’s generally better for those with younger children than schedule-oriented hourly work.

Steven Rothberg, president and founder of CollegeRecruiter.com, says “an increasing minority” of entry-level workers, are attracted to these jobs. He says he believes social introverts make good candidates. “They like working with people (but) they like interacting by email and by being on the phone. They dislike working in person with a lot of others,” he says, because of meetings and other “time-sucking problems” at an office.

Self-motivation, discipline, job skills and independence are key traits for at-home workers, says Stephanie Foster, a former medical transcriptionist who runs the website HomeWithTheKids.com.

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A growing number of employers appears to believe telecommuting is a good arrangement for them, as well. It cuts overhead costs, allows access to talented workers who may not be available locally, provides off-hours support and helps retain employees, says Sara Sutton Fell, CEO of FlexJobs.com, a website that aggregates hand-screened telecommuting/work-at-home jobs. “We’ve seen a real broadening of the audience of both employers and job seekers.”

Consider these 10 jobs — some rather traditional and others unexpected — for engaging at-home work and good (if competitive) prospects.

1. Virtual assistant

This is a job with much potential, in part because the title description covers many things. “You can fit your offerings to what you know how to do,” says Foster. One can own a virtual assistant business or work from home for a company that makes you available to other employers or clients. HomeWithTheKids.com, for example, currently features several such companies. Small businesses hire virtual assistants to help when they can’t justify a permanent employee. The International Virtual Assistants Association, which Durst co-founded in the 1990s, began with 28 members and has grown to more than 600. They charge from $37 for a six-month student membership to $137 per year for a regular member.

2. Medical transcriptionist

As Foster knows, being a medical transcriptionist is a demanding job, and nearly every company listed on her site seeks applicants with experience and/or training from certain schools. The work involves listening to and typing up dictation from doctors — some of whom have thick accents, slur words, and even “eat, drink, chew gum (and) talk to other people in the room” while dictating, she says. But hearing about medical matters can be interesting, and good transcriptionists are in very high demand. According to the Bureau of Labor Statistics’ 2015 data, the median hourly rate for transcriptionists is $17.17.

3. Translator

People with fluency in more than one language translate audio files or documents, not just word for word, but often with cultural differences in mind. “Companies can access home-based translators with hard-to-find language skills without being held back by geographic location,” says Fell.

Foster’s site lists jobs for home-based translators. The U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook 2012-13, which groups translators and interpreters, notes a projected employment increase of 29 percent by 2024, much faster than the average for all occupations.

4. Web developer/designer

Information technology is the sector, Durst says, where most of the home-based hiring is being done. Terri Orlowski, a virtual assistant and Web developer based in Pittsburgh, offers services such as custom website design, template modification and redesigns, code updates, hosting and usability reviews. She previously held administrative positions in a variety of industries and makes a higher per-hour rate now. Out of the many new monthly work-from-home job postings on Upwork.com, Web developers are in high demand, says former CEO Gary Swart.

5. Call center representative

When you phone to order something from a catalog or infomercial, a big office with rows of cubicles may come to mind. But the person on the other end of the line is likely to be sitting in a home office. “It’s a huge and growing industry,” Durst says of companies that hire independent contractors to take calls from home. She says the “home-shore movement” started in response to complaints about the many companies that looked offshore for workers.

While some websites such as Sykes Home actually hire representatives, most use subcontractors. Just be aware that the pay may be by the minute rather than by the hour, so you may not be paid for time you spend waiting by the phone. A list of companies that hire call center reps can be found at HomeWithTheKids.com.

6. Tech support specialist

Call centers also hire technical support specialists to work remotely. Kate Lister, co-author of “Undress for Success: The Naked Truth About Making Money at Home,” names it as one of her top three “best-bet work-at-home jobs.” And according to the Occupational Outlook Handbook, jobs for computer support specialists (on-site and remote combined) were expected to increase by 12 percent from 2014 to 2024 — faster than the average for all occupations — with 88,800 new jobs.

7. Travel agent

Scams abound in the travel industry — particularly organizations that charge for information on how to break into the field. But operating a home-based travel agency can be an excellent business, says Tom Ogg, founder of HomeBasedTravelAgent.com. “Real home-based travel agents have experienced robust growth over the last decade, and there are probably 40,000-plus of them and growing.” A growing (although small) number of people earn $100,000 or more a year, he says. “A solid business concept and plan focused on profitability will take you a long way to achieving your monetary goals.” There’s also the joy of helping others enjoy their leisure time.

8. Teacher

From postsecondary education to elementary schools, there are opportunities for students to learn virtually. Along with that comes opportunities to teach (and tutor) virtually. While distance learning is not new, advanced technology, collaborative multimedia software designed for schools and high-speed Internet connections have created more opportunities for teachers and students to work together from afar, says Fell.

Durst has also noticed more teacher jobs being posted, and she knows of one professor who works mainly online and makes six figures — although income “depends on how many hours you’re applying to it and the type of classes you’re teaching.” A resource center for online teaching jobs can be found at GetEducated.com.

9. Writer/editor

Yes, the print publishing industry has been suffering, but Durst is seeing frequent listings these days for writing, editing and proofreading, particularly for the internet. Even those without writing experience can join the blogosphere. Not only can blogging be lots of fun, Foster says, but also there’s money to be earned blogging for someone else’s site, getting paid to post on your own blog or through revenue-sharing arrangements.

10. Franchise owner

It’s a no-brainer: Owning a business can be the road to at-home work. For an initial investment, franchises may offer a ready-made business with brand awareness, a system and a territory, says Leslie Truex, founder of the website WorkAtHomeSuccess.com. Her advice: Consider businesses that target the over-50 crowd or the self-employed, involve health and wellness, relate to the “green” movement, or involve electronic or online devices.

Money Market Account

Hear the initials “MMA” and — particularly if you’re a sports fan — you’re more likely to think of Ronda Rousey beating some unlucky woman’s head in the Octagon than you are to think of higher interest rates on your savings.

But when shopping around for a bank account, you’re likely to see a less bruising type of MMA, or money market accounts, offered alongside conventional savings. So, what exactly is different about these MMAs?

Money market account

A money market account is a savings account that allows a limited number of checks to be drawn from the account each month. How much interest a money market account pays, and whether it’s the highest-paying deposit product offered, varies for each account from bank to bank.

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Where money market accounts came from

A few decades ago, there was a legal cap set by the government on the interest rates a bank could offer customers. Banks couldn’t try to outdo one another by offering higher rates, so instead they sold themselves with good customer service and free swag like toasters and slow cookers for new account holders.

Capped rates became unworkable in the early 1980s. Market interest rates were rising, but savings rate caps stayed relatively low in order to help banks, which had made many loans at lower interest rates in previous years, stay afloat by limiting how much they had to pay out in interest to customers.

In response, consumers seeking higher rates took their money out of the banks and put it into money market mutual funds that paid market rates of interest. These funds invested in short-term debt securities but were not federally insured like bank accounts.

Still, consumers’ savings flowed out of banks, leaving them with little money to lend out and eventually forcing Congress to pass the Garn-St. Germain Depository Institutions Act of 1982.

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That law let banks offer money market deposit accounts that paid a “money market” rate of interest to attract deposits, rather than a capped savings rate.

What money market accounts do

At their core, MMAs are basically just a type of savings account, with some minor variations. How much interest an MMA pays, and whether it’s the highest-paying deposit product offered, varies from bank to bank.

The best way to think of MMAs is as a hybrid of checking accounts and savings accounts, says Dan Geller, executive vice president of Market Rates Insight, a source of pricing data for financial institutions.

“It comes under the umbrella of savings, but it has limited checking capabilities, which makes it more attractive than just pure savings accounts,” Geller says.

Don’t get too excited about that checkbook (or, in some cases, debit card), though; banks typically limit your check writing to about 3 checks a month, Geller says.

Beyond that, the total number of transactions you can make is limited by the Federal Reserve, says Denyette DePierro, vice president and senior counsel for the American Bankers Association.

“A money market account is a savings account that allows you to make up to 6 transactions a month out of it,” DePierro says. “It’s different from a checking account because a checking account is unlimited.”

Those who exceed the transaction limit will begin receiving warning notices from their bank. And if you keep it up?

“At some point in time, if you continuously move money more than 6 times out of that account, the bank is required — it’s not their choice; they’re required by the Federal Reserve — to move you … into a checking account,” DePierro says.

And don’t worry about losing your balance if the bank fails. Like savings and checking accounts, money market accounts are federally insured.

As times have changed, you’d think MMAs would have become less relevant:

  • The transactional capabilities of MMAs look pretty pathetic compared with a typical rewards checking account, which can pay substantially more in interest each month with no limitations on the number of transactions you can make.
  • Some banks are beginning to pay more interest on savings account deposits than MMAs, making money market accounts seem ever more redundant.

But in recent years, MMAs have held record amounts of Americans’ cash, in the trillions of dollars, Geller says.

“It has to do with uncertainty about the economy among consumers,” he says. “That’s where they like to park their money until they figure out which way they want to go.