I'm going to be away on vacation for several weeks this summer, and I've been reading stories about new scams to steal travelers' personal information. How can I protect against identity theft while I'm away? -- M.S., San Diego
Start by letting your credit card company know when you'll be traveling (especially if you're leaving the country). Financial institutions' fraud departments are becoming more vigilant about unusual activity on credit cards. But if you get a phone call or an e-mail about suspicious activity on your card, don't immediately give out your information and don't call the number on the message -- that's a common ploy by identity thieves to capture personal information. Instead, dial the customer-service number on the back of your credit card.
Suspend your mail delivery until you return. Your mail can be a treasure trove for criminals -- items containing your credit card numbers and personal information could lead to identity theft. And don't announce the dates of your vacation on Facebook. That's like issuing an open invitation to crooks.
Go through your wallet and take out unneeded credit cards and personal information before you leave. Make copies of important documents, such as your passport, driver's license and health insurance card so that you'll have access to the information if your wallet is stolen.
And be wary of generic ATMs. Banks have been reporting an increase in ATM "skimming," which happens when thieves install a card reader in an ATM to capture your account information and PIN. Stick with ATMs at bank branches to be safe.
Differing credit scores
I have a VantageScore credit score in the 800s, but my FICO credit score is only 722. Why are the scores different? -- A.C., Nashville
There are several credit scores, and each has a slightly different way of compiling its ratings. The most popular, the FICO score, has a range of 300 to 850. The VantageScore -- a newer rating created by the three credit bureaus that some lenders (mainly auto dealers) may use instead of the FICO score -- has a range of 501 to 990 and a letter grade. In both cases, the higher the score, the better.
But rather than fixate on the different scores, see how they stack up against other borrowers. That's what influences lenders' decisions about whether to extend credit to you and at what rate. For example, a VantageScore in the 800s is equal to a B, and a FICO score of 722 is very good, too (but you generally need a FICO score of 740 or higher to get the best mortgage rates).
The key factor in determining both scores is your payment history -- paying your bills on time -- followed by the amount of available credit that you've used (called your "credit utilization ratio"). Try to keep your credit card balances to less than 20% of your available credit -- even if you pay off your bill in full each month. Paying down your credit card balances is one of the fastest ways to improve your credit score. You can get a free credit report from each of the three bureaus every 12 months.
Create an emergency kit
After seeing all of the devastation in Japan following the earthquake and tsunami, I've been wondering how I should prepare for a disaster. Do you have any suggestions? -- T.S., Tampa
With hurricane season just around the corner, this is a perfect time to think about emergency preparedness. Although Gulf Coast residents are most at risk, other natural and manmade disasters can strike anytime, anywhere. Here are four steps to putting an emergency plan in place.
1. Create a grab-and-go file. Store some cash along with your insurance policies, tax records and key contact information in a portable file in case you need to leave at a moment's notice. Create a contact list and appoint an out-of-town relative to be the point person if you're unable to make calls yourself (phone service can be knocked out over a wide area during a disaster).
2. Build an emergency fund. Keep three to six months of living expenses in a liquid account so that you'll have money to pay extra expenses during an evacuation. Keep receipts for your lodging, food and other living expenses while you're away from home so that you can seek reimbursement from your insurer. And keep some cash on hand -- you could have a tough time finding a working ATM.
3. Create a home inventory. Expedite payment of insurance claims by taking photos or a video of your belongings now so that you can compare the "before" and "after" pictures. Keep one copy in your portable emergency box and another copy far away from home -- mail a photo disk to a relative in another city, for example, or store it online.
4. Review your insurance coverage. Go to www.accucoverage.com to calculate how much insurance you should have to cover the cost of rebuilding your home (the service costs $7.95). Market values have decreased for many homes, but rebuilding costs have not. And consider getting extra coverage for risks that aren't covered by a standard homeowners insurance policy, such as flooding. But don't wait until a hurricane is imminent: There's a 30-day waiting period before flood coverage takes effect. See www.floodsmart.gov for details.
Insuring recent grads
My daughter is about to graduate from college and doesn't have a job. What should I do about her health insurance? -- P.N., Houston
You can rest easy. Because of last year's health-reform law, adult children no longer lose their coverage when they graduate; instead, they can remain on their parents' health insurance policies until age 26. If you already have family coverage on other, younger children, then you may not need to pay extra to keep your new grad on the policy. But if you could otherwise scale back your policy to coverage for a couple or just yourself, compare the cost of keeping your child on your plan to the price of buying her own policy -- in most states, a healthy twentysomething can get coverage for less than $100 per month. Buying a separate policy may also be a good choice if your kid moves to a city with few in-network providers or hospitals that participate in your health plan. You can get price quotes at eHealthInsurance.com.
My thanks to Mary Beth Franklin for her help this month.