If you have stellar credit, it opens a lot of doors in your financial life. It can help you qualify for credit cards and loans and snag the lowest interest rate on them. Landlords may consider your credit before offering you an apartment. Your credit health may affect your home and auto insurance premiums, too.

Your credit score is a three-digit number that gauges how well you’re managing your credit. FICO and VantageScore are the two primary companies that create credit scores, with lenders more commonly checking FICO scores before approving an application. Standard score models from both companies operate on a scale of 300 to 850; a score of 740 to 799 is typically considered very good, and a score of 800 or higher is deemed excellent.

There are plenty of sources to check your score. Credit-reporting company Experian, for example, provides a FICO score after you enroll. You could also use a credit-monitoring service like myFico, which sends you updates when there are changes. Take the steps below to give your credit score a lift — and to unlock the best terms on loans, insurance and more.

1. Pay your bills on time

Your payment history is the most influential factor in your credit rating, accounting for 35% of a FICO score. So it’s crucial to pay all of your bills by their due date.

If your credit card or loan payment is late by 30 days or more, the lender may report it to the credit-reporting companies, and that can significantly damage your score. (And if you pay just one day late, you may rack up late fees from the biller.)

Payments that are more than six months overdue may be placed in third-party collections, which is even more harmful to your score. Most negative information, including late payments and collection accounts, stays on your credit report for seven years.

Signing up for automatic payments of your bills helps ensure they are paid on time. You may also be able to set up phone or e-mail alerts to notify you when a due date is approaching.

2. Reduce your credit card balances

On credit cards, your utilization ratio — the percentage of available credit that you’re using — is another important element; how much you owe makes up 30% of your FICO score, and a key part of that is utilization, which is calculated both on individual credit cards as well as in the aggregate across all your card accounts.

You can determine your credit utilization ratio with an online calculator, such as the one from Bankrate.

Low utilization indicates that you can responsibly use credit and helps improve your credit score. A FICO study found that "high achievers" with a perfect credit score of 850 have an average revolving credit utilization rate of 4.1%. If you can’t keep your utilization below 5%, aim to limit it to 20% to 25%, says credit expert Gerri Detweiler. Paying off your credit card balance twice a month can help.

One way to decrease your utilization ratio is to get a higher credit limit, as long as you don’t increase the amount you charge on your card. For example, if you typically spend $1,000 a month on a card and your credit limit is $2,000, your credit utilization is 50%.

If your limit rises to $5,000 and your monthly spending remains at $1,000, the rate drops to 20%. Especially if your income has gone up and you’ve consistently made bill payments on time, you may be able to successfully raise your credit limit by requesting it through your credit card account online, says Detweiler.

3. Keep card accounts open (when it makes sense)

Even if you no longer use a credit card, leaving it open can help you maintain a high credit score. One reason is that if you close a card account, your overall credit utilization may rise because you’ll lose some of your available credit.

Eventually, shutting down a card could also lower the average age of the accounts on your credit report. The length of your credit history makes up 15% of your FICO score, and scoring models examine how long your oldest and newest accounts have been open in addition to the average age of all your accounts. Generally, a higher average account age is better.

For those with a perfect FICO score, the average age of their oldest account is 30 years, according to the FICO study on high achievers. After you close an account in good standing, it typically remains on your credit report for an additional 10 years. Once it’s removed, your average account age may decline.

Instead of closing a card, Detweiler recommends asking your card issuer to switch your account to a different card that better suits your needs, while preserving the entire account history on your credit report. Alternatively, you could leave your old card open and use it to make recurring payments for one or two bills so that it stays active.

But keep in mind that in some situations, closing a credit card is the best move for your overall financial health. If you’re tempted to overspend by having the card around, for example, or if you’re paying an annual fee for benefits that you don’t use enough to make the fee worthwhile, terminating the account may be the right choice.

4. Apply for new credit cards cautiously

New credit makes up 10% of your FICO score. When a creditor checks your credit file in response to your application for a new credit card or loan, a "hard" inquiry appears on your credit report.

If you apply for multiple credit cards in a short period, the resulting cluster of inquiries on your credit report can drag down your score because this behavior indicates to lenders that you may have trouble paying your bills.

That doesn’t mean you should avoid applying for new credit cards altogether; the impact of a single hard inquiry on your score is minimal. And opening a new card can improve your credit profile in the long run, as long as you make on-time payments and carry a low debt load, especially if you don’t already have any other revolving credit accounts, says Ted Rossman, principal analyst at Bankrate.

Note that if you’re shopping around for the best deal on a mortgage, car loan or student loan, newer models of the FICO score count multiple inquiries from lenders within 45 days as only a single hard inquiry, minimizing the hit to your score.

Older versions of the FICO score (which some lenders still use to evaluate applicants) have a shorter, two-week window for rate shopping.

5. Review your credit reports for mistakes often

Errors or fraudulent accounts that appear on your credit reports can hurt your score. You can request a free credit report weekly from each of the three major credit reporting companies — Equifax, Experian and TransUnion — at annualcreditreport.com.

Look for mistakes such as an incorrect balance or credit line listed on an account or a record of late payments even though you have not missed a bill. Also check for unfamiliar accounts that you never opened, a sign that an identity thief may have taken out credit in your name.

If you find a problem, file a dispute with each credit-reporting company that’s listing it, and contact the lender or other entity that supplied the erroneous information.

A financial professional can help you create a personalized plan to manage debt, strengthen your credit profile and work toward your financial goals.

Use the tool below, powered by Bankrate, to connect with a financial professional who can help you create a plan for your specific financial needs:

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Picture this: You and your spouse find the perfect home. You're eager to make an offer, but before you do, you visit a mortgage banker for a pre-approval. They run the numbers, and you sit back and relax, knowing you, the meticulous bill payer and responsible card user, are in a good spot.

But then, his eyebrows furrow. He shows you an item on your credit report, a charged-off Macy's credit card. The only problem is that you've never had a card with them. Your spouse is surprised, too.

You file an appeal with the credit bureaus using the Consumer Financial Protection Bureau (CFPB), You wait. Nothing happens. This is a reality many face now.

Unmasking the culprits: Identifying the drivers of declining resolutions

Here's the issue: Mistakes on credit reports are increasing. And this is coming at a time when credit bureaus are not resolving disputes at the rate they were in the past. This can leave people with incorrect information on their report, which can hurt them financially when they need to borrow money. There isn't a simple fix as there are multiple moving parts.

First, the number of complaints filed by the CFPB (PDF) rose to a record 5.9 million in 2025. The CFPB receives complaints from customers having trouble correcting incorrect information on their credit reports. In turn, the agency will file disputes for legitimate complaints.

What's causing the increase in complaints? A joint investigation conducted by Consumer Reports and WorkMoney found that almost half the people who volunteered to check their credit reports discovered errors.

Next, you have credit repair agencies flooding each of the three bureaus with sometimes erroneous disputes. What happens is these agencies promise a temporary score bump through credit washing. This is when, if the bureau can't respond to a complaint within 30 to 45 days, it must remove the item from the credit history, even if it's accurate.

Then, there's what's going on inside the CFPB. Recently, under the new leadership of Russell Vought, the bureau has changed how customers file complaints when they find erroneous information on their credit reports. They changed the policies due to what they call a high number of illegitimate claims.

How have the policies changed? By requiring the following, per the National Consumer Law Center:

• If you want to dispute an item, you must provide personal information, such as your birth date and demographic information
• Go through two-factor authentication (when you receive a text or email code to log in), and you're limited to how many complaints you can make per phone number
• Restricting some IP addresses from allowing the user to submit a complaint, making it harder for those without home internet access to do so

Then, there's the effectiveness in helping customers resolve their complaints. A ProPublica investigation found a significant drop in the number of customer complaints resolved by two of the major credit bureaus.

It prompted four senators, led by Elizabeth Warren, D-Mass, ranking member of the Senate Banking, Housing and Urban Affairs Committee, Tammy Duckworth, D-Ill., Andy Kim, D-N.J., and Lisa Blunt Rochester, D-DE, to write letters to each bureau. In them, Warren says, "That credit bureaus are not helping customers."

The mistake that could cost you thousands

Your credit history is your financial barometer with lenders. However, if you have inaccurate information with one and it isn't resolved, it places you at a huge disadvantage when you need to borrow money, especially if those errors contribute to a lower credit score.

Here's a look at how much a $25,000 car loan (assuming no money down) costs you at different interest rates:

As you can see, there's a huge difference in total loan costs. If someone steals your information and uses it to run a few balances up, you could easily fall into the subprime category. This could cost you an extra $5,644 for this car loan.

How do you prevent this from happening to you?

Thankfully, it's easier than ever to monitor your credit health. There are tools, such as myFICO, that can alert you to any changes in your credit report, such as a new inquiry or a new account opened.

Some credit cards also offer credit-monitoring tools. Capital One has CreditWise, which alerts you to any score updates, as well as changes in your credit profile. You can also access a free credit report from each bureau weekly through AnnualCreditReport.com.

If you notice any errors in your report, do the following:

• Freeze your credit while you go through the dispute process (generally speaking, it's a good idea to keep your credit frozen all the time, except when you're applying for something that needs a credit check, such as a loan or credit card)
• Contact the bureau(s) reporting the inaccurate information and follow their dispute process
• This includes writing a letter to support your case (the FTC has an excellent sample letter as a guide)
• Send the letter via certified mail with a return receipt requested
• The credit bureau(s) have 30 days to respond
• If they deny your request, you can file an appeal
• Contact the lender that reported the error to file a dispute – if they determine it was in error, they'll have the item removed for you

Keeping on top of your credit health is now more integral than ever. With errors in credit reports increasing and fewer consumer protections available, the onus is on you to stay abreast of any changes and act promptly. Doing so can save you thousands of dollars in future loan costs and protect you from incurring debt that isn't yours.

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Everybody (rightfully) looks forward to booking a vacation, especially in the dreary days of winter. But the ever-present issue with travel is that, well, it costs a lot of money. Between picking out flights, shelling out for hotels and selecting special destination experiences, the vacation tab starts out high and only continues to climb.

That's where the new "buy now, pay later" options have been coming in handy for many travelers. But does it make sense to use buy now, pay later as a way to afford your vacation?

While there are certainly upsides, there is a lot you need to consider before you press "yes" on "BNPL."

What is buy now, pay later?

Buy now, pay later programs are exactly what they sound like: They give you the option of buying something – whether it’s a clothing item, a piece of furniture, or yes, even a flight — without handing over the full price at this exact moment. Instead, you opt into a payment plan, which may require you to pay in four biweekly installments, pay monthly over a set period of time, or pay the full price at a specific selected date in the future, among other options.

Popular services like Klarna, Afterpay, Flex Pay and Affirm are dedicated to this method and pop up on most websites as a payment choice, and even PayPal has started offering buy now, pay later options come checkout time.

The pros of using buy now, pay later to finance your vacation

The obvious benefit of using BNPL is that you can essentially purchase what you want, even if you don't have the funds for it right now. This can be particularly enticing for travel.

Airfare can rise dramatically, hotels run out of rooms and experiences are booked up as your departure date approaches. Plus, there may be a sale or a special vacation package being offered you need to take advantage of now. You may also be on a saving schedule where you'll have the budget ready to spend on the trip – at the time of the trip itself, not months before it starts.

Another benefit? Unlike credit cards, most (but not all) BNPL services are zero-interest, provided you make on-time payments, of course. Otherwise, most of them will start charging interest on your missed payments.

The cons of using buy now, pay later

Although it's easy to see why BNPL makes sense at first glance, the reality is it's usually not a smart financial decision, especially when it comes to vacations. After all, while we wish vacations were a necessity, the reality is that they're not.

If you can’t pay for it now, it's simply not a wise move to book a trip: You're essentially just kicking the can down the road, accumulating more and more debt that you can't say for sure you'll pay off on time.

In fact, Brady Wright, a Certified Financial Planner with Golden Road Advisors, strongly warns against using BNPL for any purpose, citing the hidden potential fees associated with this kind of service and describing it as "the latest iteration of the same psychological trick credit card companies have been using for decades: 'Get what you want now, worry about it later.'"

"Retailers partner with BNPL companies because they can show you a price tag that's 75% smaller upfront while dangling phrases like 'interest-free' in front of you — and that gets consumers to spend significantly more," he explained.

It's not just about you buying more than you were planning on, either, he warned. It's also about making a profit off any potential lapses on your part.

"BNPL companies are banking on the fact that a percentage of users will miss payments, at which point they can charge substantial fees or interest rates. Miss a payment, and you're hit with compounding interest that can quickly spiral," Wright said.

So, should you use buy now, pay later for your vacation?

While there are situations where it may make financial sense to set up a Klarna plan for a trip (where you know for sure you're going to pay it off the following week and want to take advantage of a travel deal, for example), those occurrences are rare.

In general, if you need to depend on a BNPL plan to book a vacation, it's probably not a good idea to go now. While it may seem like a temporary godsend, these plans add up quickly and can plunge you into a vicious cycle, especially if you miss a payment and the service decides to charge you interest on your remaining balance. We all deserve a vacation, but no amount of relaxing on a trip makes up for the eventual stress that future financial issues will bring you.

"Whether it's credit cards or BNPL, you need to recognize that both forms of debt allow others to profit at the expense of your ability to build wealth and achieve your long-term financial goals," Wright emphasized.

And keep an eye out if your child mentions using BNPL to go on vacation with you or if they're planning a trip on their own: BNPL purchases are the reason behind 28% of total unsecured consumer debt for borrowers aged 18 to 24, according to the Consumer Finance Bureau. Make sure to warn them of the dangers these kind of services pose to their overall financial well-being, and explain what you both need to do in order to have a successful trip:

Work on slowly setting aside money for your travels. Use this Bankrate tool to find the quickest ways to achieve this:

Next, draw up a budget and timeline if needed so you're able to afford it when it comes time to book. Your trip will be happier and more relaxing if it's already paid off by the time you arrive at your destination.

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Until recently, lenders that sell mortgages to Fannie Mae and Freddie Mac, the government-sponsored enterprises that guarantee about half of U.S. mortgage debt, could review credit scores only from FICO to help determine whether an applicant qualifies for a loan. But now those lenders also have the option of using VantageScore, a competing score owned by the three major credit-reporting companies (Equifax, Experian and TransUnion).

FICO and VantageScore evaluate many of the same criteria to create scores, including an applicant’s record of on-time loan and credit card payments, but their formulas differ.

The version of VantageScore that mortgage lenders may now review, known as VantageScore 4.0, also factors in such alternative data as an applicant’s history of rent payments.

FICO’s newer models, including FICO 10T, integrate more of this nontraditional data, too. (Currently, however, many landlords don’t provide rental-payment info to the credit-reporting companies). Mortgage lenders that extend loans backed by Freddie and Fannie are using older FICO models now, but they will later be able to adopt FICO 10T.

Credit scores that include alternative data could present a more complete picture of an applicant’s credit history and expand the pool of those who get loan approvals, says Keith Gumbinger, vice president of mortgage information website HSH.com.

Curious about today's mortgage interest rates? Explore and compare some of today's top offers with the tool below, powered by Bankrate:

Regardless of which credit score a mortgage lender uses, you can boost your odds of being approved for a loan and capturing a desirable interest rate by following the basic rules to raise your score.

Make all your bill payments on time, and keep the balances on your credit cards low as a percentage of their limits. That’s especially important if you’re getting ready to apply for a mortgage; aim for a credit-utilization ratio in the single digits.

Get your free credit reports from annualcreditreport.com and correct any errors you find that could hurt your score.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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A credit freeze can be a pivotal step to protect yourself from identity theft.

When you have a freeze on your credit reports, lenders can’t view them in response to an application for new credit — and that helps prevent criminals from opening credit card or loan accounts in your name.

But as long as a freeze is in place, you can’t access new lines of credit either.

(Note that you can still pull up your own credit reports when they’re frozen, and lenders can check your reports to manage accounts you already have with them. Additionally, certain other entities, such as employers who want to analyze a job candidate’s credit history or landlords who need to screen a potential tenant’s credit, may be able to access credit reports while a freeze is in place.)

If you’re preparing to shop for a loan or credit card, you can temporarily lift your credit freeze. Just as with placing a freeze, lifting it is free.

How to lift your credit freeze

If you need to lift your credit freeze, ask the lender or institution which credit report it checks. You may get away with removing the freeze at only one of the major credit-reporting companies rather than all three (Equifax, Experian and TransUnion).

If you expect to apply with multiple lenders, however — say, because you’re shopping for the lowest rate on a mortgage or auto loan — you may have to lift the freeze with two or more of the companies.

If you have online accounts with the credit-reporting companies, you can use them to thaw your freeze; log in to your Experian account, Equifax and TransUnion.

Alternatively, you can call Experian at 888-397-3742, Equifax at 888-298-0045 and TransUnion at 800-916-8800. You may need to verify your identity by answering security questions.

In response to online and phone requests, the credit-reporting companies must lift a freeze within one hour (usually, it happens right away).

If you want a written record of your request to lift a freeze, you can send the request by snail mail — but it will take more time than the other methods. (You’ll find mailing addresses for each of the credit-reporting companies here.)

You may have to include identifying documents, such as a copy of your driver’s license, Social Security card or a bill that lists your address, says Rod Griffin, senior director of public education and advocacy at Experian.

A credit-reporting company must lift the freeze within three business days of receiving your request.

When you temporarily lift a credit freeze, you can specify how long your credit report will be available to new lenders for review before the freeze automatically goes back into place. You could set the lift for a single day if you know the date the lender will perform a credit check.

Otherwise, you may want to arrange for the lift to last a week or two to make sure lenders have adequate time to review your report.

During the window that you don’t have a freeze enacted, you’re more vulnerable to identity theft in the form of criminals opening new credit accounts in your name. So you should be extra vigilant in monitoring your credit reports for signs of fraud.

You can get free weekly online reports from all three credit-reporting companies through AnnualCreditReport.com.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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In our journey through life, making mistakes is often an invaluable learning experience. We stumble, we fall, and through these missteps, we gain wisdom and resilience. However, when it comes to credit and personal finance, the stakes are significantly higher, and the consequences of mistakes can be more severe and long-lasting.  

Experian research shows three in five adults attribute financial mistakes to their limited understanding of credit and personal finance, with these mistakes costing $1,000 or more for 60% of this group. This trend is particularly apparent among younger groups with over two-thirds of Gen Zers and Millennials claiming their inadequate knowledge of credit and personal finance has come at a price. In fact, 29% of Gen Zers and 38% of Millennials report these financial mistakes have cost $5,000 or more.  

Unlike everyday mishaps, errors in managing your credit can impact your financial stability, limit your opportunities and even affect your future goals. Avoiding financial pitfalls is crucial because, while we can learn from our mistakes, there’s no need to experiment with our financial health, or funds, when there are tools and educational resources available to help prevent costly errors.  

Here are five common credit mistakes people make and practical advice on how to steer clear of them: 

They don’t check their credit report

It’s a common misconception that checking your own credit report can negatively impact your credit score. This is not true. You can and should check your credit report regularly. Doing so is one of the best ways to see where you stand from a credit perspective, detect potentially fraudulent activity and identify ways to strengthen your credit history. You can also get a free weekly credit report from each of the three credit reporting agencies at AnnualCreditReport.com.  

They miss payments

Nothing will sink your credit scores quicker or more significantly than missing payments. In fact, a single missed payment will stay on your credit report for seven years and will impact your credit scores the entire time it’s there.

Setting up autopay can be a helpful tool to ensure bills are paid on time. If you think you may miss a payment, contact your lender before it happens. They may be willing to work with you or set up payment accommodations to help prevent the negative impact on your credit score.  

They carry a balance on their credit card

Many people think they need to carry a balance from month to month to build credit, but this is not true. Credit can be a financial tool; it’s debt that can be a financial problem. While it’s important to show regular activity on your credit cards in order for them to be factored into your credit scores, this does not mean you need to carry a balance. All carrying a balance will do is cost you money in the form of interest you’ll have to pay on the balance.

It’s best to pay off the balances on credit cards in full right away if you can. This is because your utilization rate, or your balance-to-limit ratio, is one of the most important factors in determining your credit score. People with the highest credit scores tend to have utilization rates of less than 10% and more often pay their balances in full each month than those with lower scores.

You never want your balances to exceed 30% of your available credit limit. Keep in mind 30% is not a goal or a target. The closer you are to 30%, the more rapidly your scores will decrease. 

They think their credit history only impacts their ability to secure credit

The truth is, credit is a financial tool that can unlock many of the things we want in life — not just access to credit cards, auto loans or things of that nature. Your credit history can impact your ability to get the latest cellphone, qualify for an apartment, lower your insurance rates, utility deposits and more. It’s important to take care of your credit history, so it’s there to work for you when you need it.  

They don’t use the financial tools available to them

Today, you can get credit for the bills you already pay with tools that allow you to self-report your payments for qualifying rent or other alternative data, such as cellphone, utility, etc., for the opportunity to increase your credit score. 

Mistakes are an often inevitable fact of life, but knowledge truly is power when it comes to financial wellness. By staying informed and proactive, you can avoid these pitfalls and build a strong credit foundation.  

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

There have been enough high-profile data breaches so far this year to make anyone nervous. We've seen some of the biggest cyberattacks in history, including a data breach at Change Healthcare and a data breach at National Public Data. Alongside these breaches have been calls to keep yourself safe by freezing your credit. 

But should you freeze your credit when information about data breaches comes out, and how exactly does freezing your credit protect yourself? In cases like the Change Healthcare and National Public Data breaches, what's the point of freezing your credit? 

Let me start by getting one thing out of the way: Kiplinger recommends freezing your  credit. Now, let's walk through why we recommend it, and why this year is a reminder of the importance of this protection measure.

What is a credit freeze and how does it protect you during data breaches?

A credit freeze, sometimes called a security freeze, blocks creditors from being able to review your credit reports. Why is that important in the wake of a data breach?

Well, consider the Change Healthcare breach. In that incident, hackers got access to people's data including names, birth dates, phone numbers, addresses, Social Security numbers and banking information. Assume I'm a scammer: If I have that information, I can theoretically apply for a credit card in your name.

If you don't have a credit freeze up, the bank may go ahead and run a credit report for that credit card. Assuming your credit is good, that card could get approved. Then I, as a scammer, could use that credit card opened in your name to buy things for myself and run frauds posing as you. That could ruin your credit and make you — and maybe even your family members — lose money in a scam. 

"While credit freezing doesn’t prevent all types of identity theft, it significantly reduces your risk by making it much harder for hackers to exploit your credit. Hackers are always looking for the lowest-hanging fruit," R.J. Weiss, CFP, CEO of The Ways to Wealth, tells Kiplinger.

It sounds scary because it is scary. Scams like the example above are a real threat of data breaches, when nefarious actors have access to your information. 

A credit freeze does not pause changes in your credit score, and you are able to unfreeze your credit very easily. It's also free to do. (Note that there is an option known as a "credit lock," which is different from a credit freeze. A freeze is free, and a lock is a paid option with some extra features.)

"With a freeze in place, you will still be able to access your own credit report. A credit freeze does not impact your credit score," said Margaret Poe, head of consumer credit education for TransUnion, one of the three credit reporting agencies.

Could you just always have a credit freeze up?

Theoretically, yes. You really only need to unfreeze your report when you're applying for credit, like for a credit card or loan. 

"With the increasing likelihood of data breaches, especially with [recent] news, it's becoming more sensible for most people to keep their credit frozen by default," Weiss says. 

Lisa Gerstner, the editor of Kiplinger Personal Finance, calls freezes "one of the strongest tools available to consumers to prevent identity theft" and has written about how to freeze your credit. 

"My own reports have been frozen for years, and anytime I’ve applied for credit, it’s been simple to temporarily lift the freeze for a period that I specify. After the period ends, the freeze automatically goes back into place," Gerstner says. 

Considering that it's free to freeze your credit and easy to unfreeze it when you need creditors to access your report, this is a simple way to protect your finances. 

"It takes a little time to set up a freeze initially with each credit-reporting company, but once it’s done, it’s well worth the peace of mind that a criminal is unlikely to open credit accounts in your name," Gerstner says.

You'll need to go through Equifax, Experian and TransUnion to freeze your credit. Stay safe out there!

What information came out of the data breaches?

The Change Healthcare breach was a cyberattack where hackers took information. Change Healthcare is a health payment processing group owned by UnitedHealth that touches billing and insurance. So even if you don't think you've worked with them, it's possible you've gone to a hospital or doctor's office who does billing through Change Healthcare, for example. 

While there's not an exact number known, many people were impacted by this cyberattack. Change Healthcare started sending out notification letters to those they know were in the data breach, but it's possible you were part of it even if you didn't get a letter as the company doesn't have everyone's updated mailing addresses. 

The data taken in that breach included people's names, dates of birth, addresses, health insurance and Medicare information, health information, billing and payment information, including financial and banking information, Social Security numbers, driver's licenses, state IDs and passport numbers. 

As for National Public Data, that's another one where even if you never worked with them directly, they may still have had your information. National Public Data is a background check company owned by Jerico Pictures Inc. That breach was also a cyberattack. It took place in April, and word came out about it recently as Bloomberg Law reported a complaint was filed claiming the breach impacted 2.9 billion people. 

That sounds like a big number, but it's important to note it's somewhat speculative and various people have been trying to assess how many people are seriously implicated by the cyberattack. For what it's worth, some Kiplinger staffers looked to see if they were part of the hack and found either that they were not or that the information linked to them was very outdated. 

In any case, information taken in that breach includes names, email addresses, phone numbers, Social Security numbers and dates of birth. 

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Checking your credit card statement every month is an important financial task. The statement holds key information about your card’s balance, interest rate and payment due date. 

Plus, by monitoring transactions, you can get a sense of where your money is going — and detect any fraudulent purchases quickly. Here’s how to read the fine print. 

Account summary

The account summary shows activity during the most recent billing period. At the top, you’ll see the balance from the end of your card’s previous billing cycle, which may be called the previous balance. Then you’ll see the amount you made in payments, which is subtracted from the previous balance. 

The account summary also includes the total amount of purchases and credits (for example, refunds for items you returned to a merchant), balance transfers, cash advances, any past due amount, fees charged, and interest that has accrued since the last billing cycle. Additionally, you’ll see the starting and closing dates of the billing cycle, which usually lasts 28 to 31 days. Transactions occurring after the closing date will show up on your next bill. 

Your statement balance (which may be called the new balance) shows the amount you owe at the end of the billing cycle. Your credit limit, as well as the amount of credit available to you after subtracting your card’s balance, appears in the account summary, too. 

Payment information

Perhaps the most important line in this section is your payment due date. Your payment is usually considered to be on time if you submit it by 5 p.m. in your time zone on the due date shown, if it’s a weekday; if the due date falls on a weekend or holiday, then you have until the next weekday to pay your balance. 

If you send your credit card payment by mail, try to mail it well before the due date so you won’t incur late fees. Your credit card bill provides a payment coupon to include with your check or money order.

The payment section also lists the minimum payment due, which is the amount required to avoid a penalty, as well as a warning that explains how much you’ll owe in fees and higher interest if you fail to pay by the due date. In addition, this section explains the number of months or years it will take to pay off the balance if you make only minimum payments. By paying your balance on time and in full every month, you can avoid a lengthy repayment time, interest charges and late fees. 

Changes to your account

If your account terms change, those differences are listed here. For example, if your card company increases your interest rate or adds more fees, you’ll be informed in this section and given at least 45 days’ notice before the changes take effect. If you trigger a penalty interest rate by paying late or exceeding your credit limit, you’ll see the rate increase here.

Transactions

This section provides a summary of your purchases and other transactions since your last statement, showing exactly where your money is going, says Ted Rossman, senior industry analyst at Bankrate. Every purchase you made is listed, along with the date of the purchase and identity of the merchant. 

Inspect this part of your statement closely for any unfamiliar or forgotten charges, such as free-trial subscriptions that turned into paid services after the trial ended, Rossman says. You should also scrutinize the list for transactions you don’t recognize, which could indicate fraud. If you see a purchase you don’t recall making, contact the merchant first. If you can’t resolve the issue with the merchant, write a letter to your credit card company to dispute the charge. 

Under the Fair Credit Billing Act, you have 60 days after the date the billing statement was sent to you to dispute an erroneous charge. Your credit card provider must investigate and resolve the dispute within two complete billing cycles — but no more than 90 days — of receiving the letter. 

If the card provider determines that the charges were unauthorized, the law limits your liability to $50, no matter how much was charged to your card. Many card companies offer zero-liability protection as long as you notify them of suspected fraud within 30 days of receiving your statement and noticing the error. 

Fees and interest charges

This section tells you the total amount you’ve been charged in interest and fees for the current year. If you’ve been paying fees, look for ways to avoid them, Rossman says. For example, setting up automatic payments of your credit card bill will ensure that your payments arrive on time.

Keep in mind that you can ask your card provider to lower your interest rate or waive fees, too. A recent survey by LendingTree found that three-fourths of consumers who requested a lower interest rate on one of their credit cards in the past year were successful.

Interest charge calculations

At the bottom of your credit card statement, you’ll see how interest on your payments is calculated. This section includes the annual percentage rate (APR) for purchases, balance transfers and cash advances. 

It also details the balances subject to the current APR and any changes in your interest rate. For example, if you had an introductory purchase APR of 0%, you’ll see when that rate will expire. 

Credit card rewards

If you have a rewards credit card, this section shows the amount of cash back, points or miles you’ve earned and redeemed. This is useful if you’re planning to use your rewards to take a trip or pay for another big expense. 

How long to keep your credit card statement

Jim Droske, owner of Illinois Credit Services, a credit-repair company, says it’s important to have access to your credit card statements in case you want to dispute a fraudulent charge or need them for tax documentation. 

If you receive paper statements, store them in a safe place for at least 60 days to dispute a fraudulent charge or for up to six years if you need them for your taxes. If you manage your account online, consider downloading electronic copies of your statements to a password-protected file on your computer.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Not surprisingly, saving or earning more money was among Americans’ top New Year’s resolutions for 2024, according to a YouGov poll. Most people have probably already broken that by now, but that doesn’t mean you can’t still try to save more money this year. And you’re more likely to succeed if you try to make small and gradual changes and find little ways to make big impacts.

For example, try writing down everything you spend every day for a week or a month. You’ll probably find that even something as small as a $3 cup of coffee can add up to a big expense when multiplied across a month or an entire year.

Below are a few tips to consider for helping you save more money this year. They may seem obvious, but they are too often overlooked.

1. Make a budget.

No matter how simple it is, any set budget can help you save money in your everyday life. Those savings can be used to meet long-term goals like buying a home or paying down debt.

But just setting a budget isn’t enough — you need to put effort into staying on track. In addition to keeping tabs on day-to-day expenses and income, a good budget should also include expenses that can be easily forgotten, such as annual car registration fees, holiday gifts or morning coffee runs.

A good tip for establishing a budget is to use the 50/30/20 rule — 50% for needs (such as housing, automotive and health care expenses), 30% for wants (like entertainment) and 20% for savings, investments and debt repayments. If you can allocate more than 20% of your income to savings and investments, you will be in a better position over the long term.

Writing down your activity in a journal can help you stay on track, and you can also utilize spreadsheets and budgeting apps. In addition, a family member or close friend who is aware of your budgeting goals can help keep you on track by holding you accountable.

2. Contribute to an emergency fund.

Would you be able to cover an unexpected $1,000 medical expense for yourself or your child, or pay for a new water heater when the old one suddenly breaks down? If not, you’re not alone; many Americans would be unable to meet these types of emergency expenses.

That’s why creating an emergency fund is so vital for your financial well-being. A useful rule is to calculate how much money you would need to cover three to six months of household expenses and use that as a target amount for your emergency fund.

3. Make a plan for managing debt.

Debt doesn’t have to be something inherently shameful. It isn’t necessarily your enemy. Just like when dieting, there are good calories and bad calories. Spending money is actually a normal and healthy occurrence, and at the end of the day, not all debt is bad for you. The problem arises when you don’t pay it back on time.

Without a formalized plan for managing debt, you can incur greater expenses by making minimum payments on your credit cards and paying more each month than necessary. Or you may unnecessarily max out your credit cards altogether — hurting your credit score on top of spending more.

A debt consolidation loan through a trusted platform like Prosper can help you pay down high-interest credit card debt by combining the debts into a single loan with a fixed payoff schedule. You may also prefer to start off repaying small balances and then work up to paying off larger ones.

4. Stop paying for subscriptions you don’t use and shop around for those you do.

How many subscriptions do you have? From streaming services to gym memberships, monthly subscriptions can add up quickly. According to Deloitte’s 2023 Digital Media Trends survey, almost half of U.S. consumers believe they pay too much for streaming video on demand services, and about one-third of U.S. consumers plan to reduce the number of such services they use.

Even individual monthly payments of $10 or $20 for services you don’t use that much can add up to hundreds of dollars per year. Check all of your credit card, debit card and spending accounts like Venmo for regular charges. There are also services that can do this for you.

Besides considering whether a subscription service is worth the cost, you can shop around to find a less expensive service. Or, just as you can negotiate directly with creditors on payment schedules, you can also negotiate directly with service providers to find ways to cut their subscription rates.

5. Avoid overusing credit cards.

Credit cards are extremely beneficial tools. If you are new to credit cards, you can build up your credit score and potentially benefit from rewards as you pay off your purchases. But those with high credit limits can encourage you to live beyond your means. Minimum payments generally cover only the interest on credit card bills, and when credit card debt is stacked on top of automotive or student loans, the burden can be very heavy.

Credit cards with low-balance transfer interest rates and strong rewards programs can help you reduce your credit card balances.

If you’re looking to take control of your money, companies like Prosper have credit cards that welcome less-than-perfect credit, with no security deposit required, and offer generous credit lines you can access immediately.

6. Check your credit reports regularly.

Your credit profile can be accessed by lenders, landlords, potential employers and others — and any errors or ugly surprises can cause you to lose out on that dream purchase, a new apartment or the job you’ve always wanted.

You are entitled to free credit reports once a year from the three main credit bureaus (and you can easily request them at www.annualcreditreport.com). Just because everything looked fine last year doesn’t mean you should forget about reviewing your credit report this year. Any errors that you notice must be dealt with as soon as possible.

Just because your New Year’s resolution to save more money and improve your financial well-being this year might have collapsed already, the above tips are easy to adopt to get you back on track, and luckily, they don’t require massive changes to your daily life.

The Prosper Credit Card is an unsecured credit card issued by Coastal Community Bank, Member FDIC, pursuant to license by Mastercard® International.

All personal loans made by WebBank.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Are you one of the nearly half a million people offered a pre-approved credit card from Credit Karma but were then denied after applying?

If so, you may be due money as part of the company's $3 million settlement with the government — but you need to act fast as the deadline to file a claim is March 4.

As Kiplinger previously reported, nearly half a million people who were offered a pre-approved credit card from Credit Karma only to be denied after applying could be entitled to a portion of the company’s settlement with the government, according to the Federal Trade Commission (FTC).  The agency charges that Credit Karma's alleged actions caused people to waste time on applying and, in some cases, even caused them to wind up with a lowered credit score once they were denied. 

The FTC sent letters and email with Claim IDs to people eligible to apply. However, if you did not receive one and believe you should have, you can call the claims administrator at 1-866-848-0871.

The action comes as the overall banking and financial services sectors face government scrutiny over concerns including making false or misleading claims, and as the country's credit card debt hit a record $1 trillion.

Credit Karma fundamentally disagrees with the allegations that relate “solely to statements we ceased making years ago,” a company spokesperson told Kiplinger in an emailed statement.

“Any implication that Credit Karma rejected consumers applying for credit cards is simply incorrect, as Credit Karma is not a lender and does not make lending decisions,” the spokesperson said, adding that the company helps its more than 130 million members understand their finances including the likelihood of financial product approvals.

"We have a track record of positive outcomes, and members shopping for credit cards on Credit Karma have a significantly higher approval rate than the national average," the company spokesperson said. "We reached this agreement to put the matter behind us so we can maintain our focus on helping our members find the financial products that are right for them.”

Offers to those who did not qualify

The settlement stems from a September 2022 FTC investigation into Credit Karma's alleged use of claims that people were pre-approved and had "90% odds" of approval. The claims were made in an effort to entice people to apply for offers that in many cases they did not qualify for, the FTC said.

To use Credit Karma's services such as credit score monitoring, people must provide personal information, including credit and income information, which the company used to send targeted ads and recommendations for financial products such as credit cards, the FTC said.

The agency alleges that, from February 2018 to April 2021, the company deceived consumers about whether they were approved and that nearly one-third of those who applied were denied credit offers. When consumers applied for these offers, third-party companies made a “hard inquiry” on their credit reports, which in many instances lowered consumers’ credit scores and harmed their ability to secure other financial products in the future, the FTC said.

Where to apply for a payment

If you receive an email or letter with a claim number, you can apply for a payment online. If you have questions or are seeking assistance, write to info@creditkarmasettlement.com or call 866-848-0871. 

The amount of the payment will be determined by a number of factors, including how many people choose to file, the agency said. The FTC has not yet set a date for mailing payments but said it will update this page when more information is available.

The deadline for filing a claim is March 4, 2024.

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A pandemic-era program allowing consumers to access free weekly credit reports is now permanent thanks to a decision by the three major credit reporting agencies to boost the credit health of US consumers. 

Knowing what’s on your credit report is essential to your credit health and overall financial well-being. During the economic uncertainty caused by the COVID-19 pandemic, annualcreditreport.com began offering free weekly credit reports for consumers with the help of the three major credit bureaus. 

On September 18, the three National Credit Reporting Agencies (NCRAs) announced a permanent extension of the free weekly credit reports initiative which was set to expire after December 2023. Experian, Equifax, and Transunion displayed their commitment to empowering consumers through free and accessible credit reporting which enables consumers to take control over their credit health. 

Prior to this development, consumers could only get a free credit report once per year. However, your credit report is updated monthly with new data from creditors. This has led some experts to suggest checking your credit reports at least once per quarter. 

Without this change, some consumers reported being charged by credit bureaus to access their credit reports and being signed up for paid services without their knowledge, according to a study by Consumer Reports. 

In a joint statement, the CEOs of Experian, Transunion, and Equifax shared this about the extension: “The ongoing availability of free weekly credit reports is another way that our industry is supporting consumers as they make financial decisions. We recognize the important role that credit reports play in people's financial lives and encourage consumers to regularly check their credit history – an important way of understanding their current credit position and preparing for important future financial milestones.”

What a credit report is used for

The information on your credit report isn’t just used to create a credit score. It impacts multiple areas of your daily life including:

• Determining how much the security deposit is on a new apartment
• Passing the background check for a new job
• Qualifying for utility services
• Getting approved for homeowners and car insurance
• Determining the cost of borrowing money for a new car, home, or other loan.

As such, reviewing your credit report regularly may help you catch potential errors that could bring down your score. According to a 2021 study from Consumer Reports, 34% of consumers found at least one mistake in their credit report. 

Although credit report mistakes are inconvenient, they’re also relatively simple to correct. The Federal Trade Commission offers a comprehensive guide to disputing credit report mistakes on your own if you identify one during your free weekly credit report review. 

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The marketing of medical credit cards – which were once offered mostly by health care providers to patients who had little or no coverage – is expanding into more health care sectors, adding to medical debt for patients and, in some cases, even contributing to bankruptcies, according to a new report.

“This relatively new version of a credit card, marketed specifically for health care services and products, usually lures in applicants with promises of a promotional 0% APR for an introductory period of 6-18 months,” the U.S. Public Interest Research Group (PIRG) said in its response to a government request for information (RFI) on medical payment products. But more complex terms of the financial agreements are not always evident to applicants, and high interest rates and late fees can add to costs, the group said.

The list of health care settings now offering these cards includes physician offices, diagnostic centers and hospital websites, PIRG said.

In July, the Consumer Financial Protection Bureau (CFPB), the Treasury and the Department of Health and Human Services (HHS) issued the RFI to see whether healthcare providers are promoting financial products that raise patient debt and lead to higher consumer costs.  

From 2018 to 2020, patients used specialty medical credit cards or loans with deferred interest periods to pay for almost $23 billion in healthcare expenses, accrued over more than 17 million transactions, according to a CFPB report last May.

“Quick ‘fixes’ like medical credit cards may be tempting, but they are costly, further exacerbating the problem,” Patricia Kelmar, senior director of PIRG Health Care Campaigns, said in her group’s response. “We urge you to use your existing authorities to the greatest extent possible to protect consumers from high-cost medical credit cards. We urge you to move swiftly from this RFI to rule-making.”

Medical debt's role in bankruptcy filings

PIRG also referred to a study on bankruptcies in Oregon, a Medicaid-expansion state, which revealed that medical debt played a major role in bankruptcy filings in 2019. 

“We were surprised that the single most frequently listed medical debt holder was not a hospital or other health care provider, but rather a medical credit card – CareCredit from Synchrony Bank,” PIRG said. This particular card was listed in 1,037 filings, totaling more than $2 million owed to CareCredit, with a median debt per bankruptcy filer of $1,443 - higher than any of the top 10 most cited health care systems in the study, PIRG said.

The CFPB, HHS and Treasury Department said that public input would improve their efforts to safeguard consumers against predatory medical debt and collections practices. Including PIRG’s comments, the agencies received 75 responses by today’s deadline.

According to the CFPB website, $88 billion of outstanding medical bills are currently in collections, affecting one out of five Americans. An infographic on the site provides various how-to answers to a series of questions to help you navigate the medical and collections systems.

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 A data breach of a third-party database may have exposed the personal patient information stored with Johnson & Johnson’s (J&J) Janssen CarePath unit, a patient support platform.

The data breach, which occurred on Aug. 2, was announced on Sept. 6 by Janssen and IBM, a Janssen service provider and manager of the database. Janssen said the incident applies to patients who were enrolled in its services prior to July 2 and does not apply to its pulmonary hypertension patients.

Personal information that may have been exposed includes individuals’ names and one or more of the following: contact information, date of birth, health insurance information, and information about medications and associated conditions that were provided to the Janssen CarePath application, the companies said. Social Security numbers and financial account information were not contained in the database or affected, they said.

The incident comes amid a slew of recent cyber attacks targeting the healthcare industry, including a file sharing service data breach announced in July that exposed personal information of Medicare recipients and millions of other healthcare consumers.

IBM is offering free one-year credit monitoring to those who may be affected by the incident. These individuals will be sent notification letters and instructions on how to sign up for credit monitoring, it added.

The tech giant has also established a toll-free call center for questions about the incident. The number for individual users is (888) 604-6584, and for healthcare providers is (877) 792-3593.

Few details given about the breach

Neither company provided specifics on the breach but said that Janssen notified IBM when it became aware of a technical method that could lead to unauthorized access to the database, and that IBM worked with the database provider to remediate the issue. 

IBM said it was able to pinpoint the date of the unauthorized access but not the extent of the access. The company said it is notifying all customers and users whose information was contained in CarePath’s database “out of an abundance of caution.” It added that there is no indication that any of the information involved in the breach has been misused

The number of potentially affected patients was not provided.

On its website, Janssen says it helped more than 1.16 million U.S. patients last year through the CarePath program. According to the website, “once a healthcare professional has decided a Janssen medication is right for their patient, Janssen CarePath can help that patient find the tools they may need to get started on a medication and stay on track, including sharing options to help manage out-of-pocket costs.”

Steps you can take

Janssen and IBM encouraged CarePath “to remain vigilant by regularly reviewing their account statements and explanations of benefits from their health insurer or care providers with respect to any unauthorized activity, and to promptly report any suspicious activity.”

While no security system is foolproof, you can take steps to better protect your personal information online. After the Medicare breach was announced, the Centers for Medicare & Medicaid Services advised people to take action. This included enrolling in a credit monitoring service, and obtaining a free credit report by calling 1-877-322-8228 or requesting it online at www.annualcreditreport.com.

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Experian Consumer Services (ESC), part of consumer credit rating agency Experian, has agreed to pay a $650,000 fine to the Federal Trade Commission (FTC) for spamming consumers with marketing emails that did not include a way to opt out, as required by law.

The FTC said the California-based credit agency, which is also known as ConsumerInfo.com, sent consumers the unsolicited emails after they signed up for an account to manage their Experian credit report information.

A spokesperson for Experian, which tracks credit activity and provides credit reports, said in a statement that the company disagrees with the FTC's allegations but that the agreement allows Experian to move on and continue to focus on serving consumers. In addition to changes requested by the FTC, the company has also launched a new Email Preference Center, which can be found at the bottom of every marketing email communication, he said.

"By providing our customers with account updates and information, we're empowering them to take control of their financial lives, safeguard their identity and improve their financial health," the spokesperson said.

According to the FTC complaint filed with the Department of Justice, people who seek to freeze or take other steps to manage their Experian credit information online must create an ESC account. However, the FTC charges that those who signed up for the free account were spammed with emails unrelated to their Experian accounts and instead received marketing products and services, such as one promoting Experian Boost, which offers ways to improve credit scores.

People have right to opt out

“Signing up for a membership doesn’t mean you’re signing up for unwanted email, especially when all you’re trying to do is freeze your credit to protect your identity,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. He added that consumers always have the right to unsubscribe from marketing messages.

ConsumerInfo.com did not provide “clear and conspicuous” information, however, notifying consumers that they have a choice of opting out of receiving additional marketing messages, the FTC said.

In addition to the fine, the FTC has issued a proposed order that would prohibit ECS from sending marketing emails that fail to offer a way to opt out of such messages. The order must be approved by a federal court before it can be put into effect, FTC said.

The FTC and other government agencies have been cracking down on email spam, scams and other online violations in recent years especially. Last week, the agency finalized an order requiring online counseling service BetterHelp to pay $7.8 million to settle charges that the company shared consumers’ sensitive health data with third-parties including Facebook and Snapchat for advertising purposes, despite promises to keep such data private.

Some of that BetterHelp fine will be used to provide partial refunds to consumers, said the FTC, which has also banned the company from sharing personal consumer data for re-targeting.

In a statement, BetterHelp said it has never shared private information such as members' names or clinical data from therapy sessions with advertisers, publishers, social media platforms or any other similar third parties. It also said that it has never received payment from any third party for any kind of information about its members.

"The FTC alleged we used limited, encrypted information to optimize the effectiveness of our advertising campaigns so we could deliver more relevant ads and reach people who may be interested in our services," according to the company's statement. "This industry-standard practice is routinely used by some of the largest health providers, health systems and healthcare brands."

BetterHelp added, however that it understands the FTC's "desire to set new precedents around consumer marketing, and we are happy to settle this matter with the agency." It added that the settlement is not an admission of wrongdoing.

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There's a secret sauce for how to increase credit scores quickly. If your credit score is in the doldrums, it pays to take a bit of time to give it a boost. If you're in the market for a loan, for example, you need your score to rise — fast.

The good news is that you might be able to give your score a quick lift, depending on why it's sagging in the first place. A large amount of credit card debt, for example, may be more easily and speedily resolved than an account that's in default.

Here are six ways to elevate your credit score, from those that can produce fast results to ones that require a slow and steady approach.

If high credit card debt is weighing on your score, paying off all or most of it in one swoop could give your score a quick and significant boost.

First, the basics: A key component of your score is your credit-to-utilization ratio —the amount you owe on your credit cards as a proportion of your card limits. Utilization is calculated for individual cards and in the aggregate for all your card accounts. The lower your utilization ratio, the better. According to FICO, consumers with scores of 800 or higher (standard FICO and VantageScore credit scores range from 300 to 850) use an average of 7% of their credit limits. If you're close to maxing out your cards, removing the debt should increase your score after the low or zero balances show up on your credit reports — likely in the following month or so. 

Don't have enough cash lying around to make a big payment? Another strategy is to transfer the debt to an installment loan — say, a personal loan — or a home equity line of credit (HELOC). Such debts don't factor into utilization ratios. Plus, the presence of the loan or HELOC on your credit report could improve your mix of credit, which accounts for 10% of a FICO score. 

It's a good idea to leave a credit card account open even after you stop using it. When you close a card, its credit line no longer counts toward your utilization — so if you have balances on other cards, your utilization ratio could climb.

Typically, credit card issuers report your card balance as of the statement closing date— not the payment due date — to the credit agencies. If you pay off the balance a few days before your card's closing date (look for it on your statement), then a low or zero balance will likely show up on your credit report. That will help keep your utilization down. "I call it the ethical credit score hack," says credit expert John Ulzheimer, formerly of FICO and Equifax.

Another trick that can help lower your utilization: Ask your card issuer to increase your limit.

Issuers are generally willing to raise credit limits once a year, says Jeff Richardson, spokesman for VantageScore. Of course, you'll have to avoid increasing your spending — and thus your card balances — to see a positive outcome from higher card limits. The issuer won't likely grant a large increase, however. And if it does, it may check your credit report, causing a "hard" inquiry, says Ulzheimer. A hard inquiry may shave a few points from your score.

This strategy can have an especially strong impact on a young person with a thin credit file. If, say, a parent adds a child as an authorized user on a credit card account, that account and its history will pop up on the child's credit report as long as the issuer reports it (most do).

If the parent has had the account for several years, keeps utilization low and pays the bills on time, the child may see a quick and positive effect on his or her credit score. Card companies typically allow a cardholder to add anyone — not just a family member — as an authorized user.

Collection accounts, bankruptcies and other black marks can heavily damage your score, so clearing such derogatory information from your credit reports could give your score a fast and substantial lift, especially if the information has been on your report for less than two years, says Gerri Detweiler, credit expert and education director for Nav, a site offering credit scores and information for businesses.~

First, check your credit reports. You can get a free report every 12 months from each of the major credit agencies — Equifax, Experian, and TransUnion — at www.annualcreditreport.com.

If you find an account that you don't recognize, it could be the result of an identity thief using your name to get credit, or a lender may be reporting the account in error. If a fraudster is at work, you can take steps to block the fraudulent information from your credit reports. If the negative account is the result of an error, contact the lender or whoever furnished the information in question, and file a dispute with each credit agency whose report lists the account.

If you missed a payment once but otherwise have a long and perfect payment history, you may be able to persuade the biller to stop reporting the delinquency by writing a goodwill letter explaining your uncharacteristic slip-up.

It's the opposite of a quick fix, but the simple passage of time can heal a suffering score as long as you practice good credit habits. As a delinquency gets older, its impact on your credit score decreases, and it falls off of your report after seven years.

Plus, the length of your credit history makes up 15% of your FICO score. As the average age of your credit accounts lengthens, your score benefits. "You won't max out in that category until you've had credit for decades," says Ulzheimer, who didn't see his own score hit 850 with regularity until he'd had credit accounts for about 25 years. According to FICO, consumers with scores of 800 or higher have an average account age of 11 years, and their oldest account was opened 25 years ago.

If you close a credit card, the account will still appear on your credit report and factor into the age calculation for about 10 more years. Opening a new card, however, lowers the average age of your accounts.

It used to be that you'd freeze your credit if you'd suffered identity theft or some other compromise of your personal information. But as data breaches have piled up, a pre-emptive credit freeze has become a popular way to protect your credit, even if a thief hasn't yet made fraudulent use of your info.

Being proactive is only one way to protect your identity. There are many other ways to keep your credit secret, which we'll cover in the article.

We'll also explain how a credit freeze works and how to set one up to protect your most important data from digital thieves.

What does a credit freeze do?

When you put a credit freeze (sometimes called a security freeze) in place, new creditors can't review your credit reports to judge whether you're eligible for a credit card or loan — and in turn, lenders are unlikely to grant credit to fraudsters posing as you. When you need to shop for credit for yourself, you can temporarily lift the freeze.

How much does a credit freeze cost?

Do I have to pay to freeze my credit? Nope. Placing and lifting a freeze is free at each of the major credit agencies, thanks to federal law.

How do I freeze my credit?

To set up a credit freeze, take these three steps.

1. Gather your information. In the past, all three of the credit agencies had consumers use a PIN to confirm their identities when they wanted to temporarily lift or permanently remove a freeze. But TransUnion, Equifax and Experian no longer require a PIN.

Instead, you can set up a password-protected online account or provide identity-verification information by phone or mail. But if you go online, you can manage your freeze with a password-protected account instead.

2. Contact each credit agency. The web pages or phone numbers below are the quickest avenues to imposing a freeze. To submit your request by mail, use these addresses.

Freeze your credit with Equifax
Equifax Information Services LLC,
P.O. Box 105788,
Atlanta, GA 30348
(Fill out and submit this form to request a freeze by mail.)
888-298-0045

Freeze your credit with Experian
Experian Security Freeze,
P.O. Box 9554
Allen, TX 75013
888-397-3742

Freeze your credit with TransUnion
TransUnion
P.O. Box 160
Woodlyn, PA 19094
888-909-8872

3. Save your passwords. We're all guilty of using the same passwords for everything. However, that also means if hackers can crack your password, it won't take them long to access all of your information.

For this reason, having a password manager is essential. Some of the top options include Dashlane and NordPass. They can create unique passwords for each of your online accounts to keep you safe and store them securely for when you need to use them.

Other steps to protect your credit

• Monitor your credit reports regularly. While you can receive a free credit report from each bureau annually, a service like MyFico helps you stay on top of any credit changes, like new accounts opening or inquiries. And if you don't recognize any changes, you can place freezes on your credit history right away before more damage happens.
• Store documents securely. If you can, sign up for electronic statements with your lenders. They'll arrive in your email, reducing the likelihood of anyone intercepting information through the mail. You can also use a service like Quicken's LifeHub for cloud storage. That way, you can shred paper files and gain access to them on the go, anytime you need them.
• Use a password manager. A password manager creates difficult passwords to crack and stores them securely for you. Services like 1Password protect every aspect of your digital life, tying in all your online accounts with all of your devices in one hub to secure all data points.
• Secure your internet: If you use home Wi-Fi, ensure your phone, computer and router have updated software. This can minimize security vulnerabilities thieves use to hack into Wi-Fi.
• Use credit repair services to fix errors. If you notice errors in your credit report, you might be wondering how to fix them. Credit Saint specializes in helping customers improve their credit scores by working on their behalf to remove incorrect information on their credit reports.

Being proactive pays off

Data breaches happen all the time. As such, knowing all the credit monitoring tools at your disposal can help you keep up to date with any changes. In turn, you can take action promptly if someone tries to open an account in your name.

Just remember to freeze your credit with each credit agency. That way, if your information is compromised, you can stop them from harming your credit. And if you don't plan to use your credit anytime soon, freezing it doesn't do any harm, yet it protects your information from being used.

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In 2017, credit bureau Equifax announced that the sensitive personal information of 147 million people had been exposed in a data breach. As part of Equifax’s settlement with regulators, affected consumers were able to sign up for free monitoring of their credit reports from Equifax as well as the other two major credit bureaus, Experian and TransUnion.

Early this year, the settlement became final, and if you were among those who filed a claim for credit monitoring (the deadline was in January 2020), you should have received a letter or an e-mail from info@equifaxbreachsettlement.com with instructions to sign up for daily three-bureau monitoring with Experian IdentityWorks. You must enroll by June 27, 2022. For more details, you can check this page on the Federal Trade Commission website.

Names, birth dates and Social Security numbers are among the data involved in the breach. Those are key pieces of information that a criminal can use to open credit accounts in your name, among other forms of identity theft. If a new inquiry (a request by a lender to view your credit report), credit card, loan or collection account pops up on your credit reports, IdentityWorks should notify you.

The service also provides monitoring of internet black markets for your personal data, and up to $1 million in identity theft insurance, which reimburses you for certain expenses related to recovery from identity theft, such as lost wages or income, attorney and legal fees, and costs of child or elder care. You also get monthly access to your Experian credit report—although you can get a free credit report each week from each of the three major credit bureaus for the remainder of 2022 at www.annualcreditreport.com, and through 2026 all U.S. consumers get seven free Equifax credit reports per year. Your IdentityWorks membership lasts for four years, and you don’t need to cancel the service when it expires.

Even if you didn’t file a claim, if you become an identity-theft victim, you can get free identity-restoration services—such as help contacting your banks and lenders and notifying law enforcement—if you are among those whose data was exposed in the Equifax breach. To check your eligibility, visit the Equifax Data Breach Settlement website.

Beverly Harzog is a credit card expert and consumer finance analyst for U.S. News & World Report.

Getting married is a big decision, not just emotionally but financially. What do people get wrong about how marriage affects their credit? One common misconception is that you have a joint credit report. You each still have your own credit report, and the same goes for your credit scores. Another misconception is that you have to apply for credit together. You can apply for things like a mortgage or a credit card together, but each partner should have their own credit established. If you need to establish your own credit because, say, your spouse dies or you get a divorce, a difficult situation could become even more difficult.

Are there instances in which it’s a bad idea for a couple to apply for credit together? Let’s go back to the mortgage example. If both spouses have a relatively high credit score, you’re more likely to get approved at the best rates because lenders don’t see you as a risk. However, let’s say one spouse has a credit score that’s 100 points higher than the other spouse’s score. In a situation like that, the spouse with the best credit score should apply for the mortgage—assuming they have sufficient income to apply on their own. Otherwise, you may not get the best interest rate on the loan, or you might not get approved at all.

People wrongly assume that lenders will just look at the top score. They will consider both of your scores. If one spouse has a low score, a lender will consider you a higher risk because of the possibility that that spouse will end up being responsible for the payments. The same goes for applying for a joint credit card.

But what if one spouse is trying to reestablish or improve his or her credit standing? First, you need to understand why that spouse doesn’t have a good credit score. Is it because they’ve just never tried to build credit? Or is their score low because they missed payments on their bills? From there, you can decide whether you want to help that spouse improve their credit by adding them as an authorized user on one of your accounts. If you add your spouse as an authorized user, make sure the credit card issuer will report your spouse’s use of the card linked to your account to the credit bureaus. Not all of them do. Next, you need to understand that you’re on the hook if your spouse runs up a balance and fails to pay it off.

How can a couple—whether married or not—maintain good credit habits and avoid conflicts over credit? Credit is a team effort. Couples should discuss how much debt each has, including student loans, how they can work together to improve their credit, and what they need to do to accomplish that goal.

You should each review your credit reports regularly. You can still get them weekly for free from the credit bureaus until April, but even after that you’re entitled to a free credit report from each major bureau once every 12 months. So every four months, both of you should pull a credit report from one of the bureaus and review it for accuracy and signs of fraud. And if you notice something isn’t right, make sure you each file a dispute with the credit bureaus.

It’s easy to get your credit score for free these days. Your bank or credit card issuer may offer it, and there are other options as well. Experian, one of the three major credit bureaus, supplies a free score and credit report at www.freecreditscore.com. Credit Karma (www.creditkarma.com) also offers a free score, as well as credit reports from the other two major credit bureaus, Equifax and TransUnion (you must create an account to get your score).

FICO, which invented the credit score, and the three credit bureaus offer monthly plans that provide your credit score and other features, such as credit monitoring, for prices ranging from $10 to $40 a month, depending on the level of service. But you probably don’t need to sign up for a subscription service or pay for a credit score.

Know your score. Your credit score is designed to provide lenders with a way to assess the likelihood you’ll repay a loan; your score also measures your financial well-being. But not all credit scores are created equal. The two big consumer credit scoring companies are FICO, whose scores are most commonly used in lending decisions, and VantageScore, a company created by the three major credit bureaus. The latest models of both scores operate on a scale of 300 to 850, but the formulas differ, and your scores could vary. Generally, a score of 750 or higher is considered excellent, and a score of about 700 or higher means you’re managing your credit well.

Keep in mind that when you obtain a credit score, the number you’ll see is not necessarily the score your lenders will use. Some large lenders have proprietary credit scores they’ve created for their own purposes, says Matt Schulz, chief credit analyst for LendingTree. Still, the free scores you find online or elsewhere provide a way to gauge your credit standing. In addition, a significant drop in your score could be a sign that you’ve been a victim of identity theft or that an error has popped up on your credit reports—say, because a lender has mistakenly flagged an account payment as past due. Don’t rely completely on your score—you should periodically review your credit reports to monitor them for signs of fraud and to make sure the information used to compile your credit scores is accurate. Until April, you can check your credit report from all three credit bureaus weekly at no cost through www.annualcreditreport.com. After that, you can do it for free once every 12 months.

Getting granular. Most people are aware that paying bills late can hurt their score, but that’s just one of the factors affecting your credit score. The five categories that make up your FICO score are payment history (35% of the total), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).

The amounts-owed category refers not only to how much you’ve borrowed but also to your credit-utilization ratio, which is the amount you owe on your credit cards as a proportion of your card limits (the ratio is calculated for individual cards as well as in the aggregate for all your accounts). Try to keep the ratio below 30%, and keeping it below 10% is even better, says Ted Rossman, an analyst at CreditCards.com.

The length of credit history would come into play when you, say, apply for multiple new lines of credit—for example, opening a bunch of retail cards to get discounts on your purchases. That can hurt your score, particularly if you have a short credit history. Finally, your credit mix is an assessment of your ability to successfully manage different types of credit, such as credit cards, installment loans and mortgage loans.

Paying off high-interest credit card debt is an important step toward financial freedom, and Americans have taken this standard personal finance advice to heart. According to data from the Federal Reserve, revolving credit balances (primarily credit card debt) dropped more than 11% from 2019 to 2020. Analysts believe the decline stems from a combination of spending cutbacks during the pandemic and billions of dollars in stimulus checks, which many consumers used to pay off debt.

If you find yourself with one or more paid-off credit cards taking up wallet space, should you close your accounts for good?

Credit-utilization math. Most experts agree that you should hold on to a paid-off credit card, even if you’re no longer using it. FICO scores, which most lenders use, are calculated based on five factors with varying weights. Your payment history is the most important factor, accounting for 35% of your score, but your credit-utilization ratio—the amount you owe as a percentage of your total available credit—also has a heavy impact on your score, at 30%.

Say you have total available credit of $10,000 split evenly between two cards. One card has a balance of $2,500 and the other has a zero balance because you paid it off. Your credit-utilization ratio is 25%—a desirable amount because most credit experts recommend keeping the ratio under 30%. If you were to close that zero-balance card, though, your ratio would jump to 50%, which would hurt your credit score.

In addition to doing the math with your own accounts before you close a card, you also need to give some thought to why you no longer want the card, says credit expert Beverly Harzog, author of The Debt Escape Plan. Harzog says people most often consider closing a credit card when the rewards aren’t generous enough to justify the annual fee or when they want to remove a temptation to run up more debt. But you may not need to close a card to address those issues.

New card, same issuer. Cards with annual fees often offer rewards—but at a steep price. Such cards will typically cost you about $100 a year, but some can run as high as $550 (see Best Rewards Credit Cards).

If you are reconsidering a card with a high annual fee, ask the issuer if it has a no-fee (or low-fee) card with similar rewards and credit limits you can switch to. If you’re approved, you won’t lose the credit history attached to the old card, and your credit-utilization ratio won’t be affected.

If you can’t find a card to switch to with the same issuer, apply for a new card with a similar credit limit before canceling the old card. That way, your credit score won’t take a prolonged hit, because the amount of your available credit will remain the same.

If want to remove the temptation to spend, store the card in a safe place where you won’t come across it very often. Or just cut it up. Once you’ve done that, prevent crooks from using it by going to your credit card’s website or app and placing a lock on your account.

“If you truly believe canceling a card is in your best interest, do it, and just ride it out,” Harzog says. The hit to your score will be temporary as long as you continue to keep your card balances low and pay your bills on time.

Rivan_Stinson@kiplinger.com

Throughout the past decade, consumers have been rocked by one massive data breach after another. Some 500 million Yahoo users were hit by a 2014 data breach that compromised e-mail addresses, passwords and other information. The 2017 hack of credit bureau Equifax exposed Social Security numbers and other sensitive information of 147 million people. Thousands of other breaches exposed the data of millions of consumers, who have come to assume that their personal data has been laid bare somewhere.

Lately, however, fraudsters have shifted from large-scale hacks to more-focused attacks—on businesses in particular. In 2020, the total number of data breaches dropped by 19% compared with 2019, according to the Identity Theft Resource Center. “Ransomware and phishing attacks directed at organizations are now the preferred method of data theft by cyberthieves,” the ITRC wrote in its 2020 Data Breach Report. The ransomware strategy, through which criminals encrypt data on a network computer and then demand that you pay for a key to decrypt it, received much attention after hackers forced down Colonial Pipeline, a major supplier of gasoline and jet fuel in the Southeast.

That creates greater impetus for organizations to protect themselves and their employees, but consumers still have plenty of reason to stay on guard in their personal lives, too. Identity thieves haven’t given up on data breaches. Plus, your Social Security number and date of birth are unchanging bits of information that criminals can use years after stealing them to carry out crimes such as opening a new credit account or filing a tax return in your name. And crooks continue to capitalize on current events—especially those involving health, the economy, holidays and disasters—to wring money or personal information from victims, says Adam Levin, founder of identity-protection service CyberScout. Increasingly, criminals are contacting consumers directly using scams designed to draw out personal information, and victims now often recall the moment they interacted with a criminal text, call or e-mail, rather than having no idea how their identity was stolen, according to Javelin Strategy & Research.

We’ve outlined how you can defend against several types of fraud, as well as the steps to take if you become a victim. The Identity Theft Resource Center offers free victim assistance through its hotline at 888-400-5530. And at IdentityTheft.gov, you can fill out an identity theft report (you may have to submit it to businesses involved in your ID theft claim to prove that you’re a victim) and launch a recovery plan.

Phishing schemes

The problem: Through e-mails and text messages, criminals contact consumers and pose as legitimate institutions—say, the IRS, the Social Security Administration, a bank or a well-known business—in attempts to gain personal information or money. You may, for example, receive a fake e-mail requesting that you provide your credit card information to continue receiving service from a utility or other entity or advising you to click on a link to reset your account password.

How to protect yourself: Make sure you know the signs of a phishing e-mail or text message. Less-sophisticated attempts aren’t terribly difficult to spot—they often include spelling and grammatical errors, use a formal or generic greeting, and attempt to invoke a sense of urgency for you to take action. Even if an e-mail looks legitimate, check the sender’s e-mail address; if the domain doesn’t seem to match the business from which the message claims to originate, or if it’s from a personal service such as Gmail.com or Yahoo.com, the e-mail is likely fraudulent. Look closely at a domain that appears genuine at first glance, too—it may, for example, include the number zero where the letter O should be.

Don’t click on website links or enable downloads within the message—if you do, you may install malware on your device or be directed to a scam website that mimics a real one. Hover your cursor over links to see their true destinations (the web address will pop up on your screen). If you’re unsure whether an e-mail or text message is legitimate, look up the phone number of the sender it purports to be from and call to ask whether the message is real.

Some phishing attempts are more advanced—and harder to identify. “Spear-phishing” targets specific individuals and may leverage information that the fraudster has obtained about the recipient—from his or her social media profiles, for example—making the message seem more authentic. The message may greet you by your name and include a signature with the name of a friend or work colleague. If the message has an off-kilter tone or includes an unexpected or unusual request, there’s a good chance it’s fake.

What to do if you’re a victim: Take stock of what information was compromised. If you realize that you gave away the log-in information to one of your accounts—say, because you followed a link to a scam website that looks like that of your bank and entered the credentials—reset your password for that account and any others for which you use the same log-in information. If you handed over your credit card or bank account number, notify the institution immediately. In case your device is infected with malware, run a scan from a service such as Malwarebytes to clean up. (See below for more on securing your passwords, payment accounts, sensitive personal information and devices.) Did you fall prey to a phishing scheme at work? Alert your employer’s information-technology department right away.

Vulnerable devices

The problem: Your smartphone and computer are vulnerable to both physical theft and online assaults, such as through viruses, ransomware and compromised Wi-Fi. Other devices in your home that are connected to the internet, such as security cameras and smart speakers, are subject to hacking as well.

How to protect yourself: One of the most important actions you can take is to install updates for the operating system and software on your devices as soon as you receive a notification to do so. The updates may include patches to fix security flaws. Use an antivirus program to shield your computer from attacks. And before you put software on your computer or an app on your smartphone, make sure it’s from a reputable source.

As the gas shortages of the Colonial Pipeline attack made vivid, Ransomware has increasingly become a threat to businesses, which have deeper pockets than most individuals. Still, “ransomware hits consumers all the time,” says Alex Hamerstone, advisory solutions director for cyber­security firm TrustedSec. The best defense is to regularly back up files stored on your computer to a second source. You could use a cloud-based server or an external hard drive—but be sure to disconnect an external drive when you’re not backing up files or hackers could encrypt it, too, says Randy Pargman, vice president of threat hunting and counterintelligence for cybersecurity firm Binary Defense.

It’s not a bad idea to isolate your most sensitive transactions, such as managing bank accounts and insurance, to a separate device from ones that you or your family members use to, say, play games or watch videos, says Mark Ruchie, chief information security officer for security firm Entrust. Those activities may invite malware. Change the default passwords that come with your internet router and smart devices.

When you are outside your home, avoid hooking up to public Wi-Fi, through which hackers could access your device, and turn off your device’s Bluetooth connection. If you regularly use the internet on your computer while you’re on the go, consider using a VPN, which provides an encrypted connection. In case a thief swipes your laptop or smartphone, secure the home screen with a password, PIN, pattern or biometric authenticator (such as your fingerprint), and password-protect banking and other sensitive applications within your phone, too.

What to do if you’re a victim: If your smartphone is stolen, remotely erase its data. (Before your device goes missing, turn on within its settings “Find My Device” with an Android phone or “Find My iPhone” with an iPhone.) If you’re an Android user, go to www.android.com/find, where you can sign in to your Google account and choose to delete the device’s content. Act quickly—the phone must be turned on and online for the feature to work. With an Apple device, log in to www.icloud.com/find and erase the data with Find My iPhone. Your iPhone must be online; if it is offline, the contents will be erased the next time it is online.

Ransomware victims may be able to find keys to decrypt their data with a web search or by visiting www.nomoreransom.org. Otherwise, you have to decide whether it’s worth paying to get your data back. “We don’t advise people or businesses on whether to pay the ransom because we understand that’s a hard choice to make,” says Eva Velasquez, president and CEO of the Identity Theft Resource Center. But keep in mind that paying the ransom reinforces the business model for fraudsters, and there’s no guarantee that they’ll return your data after you pay. In a survey from cybersecurity company Kaspersky, 17% of respondents who paid a ransom didn’t get their data back.

Antivirus software can help you detect and remove malware from your device. The AV-TEST Institute, which runs tests on anti­virus software, recently deemed Bitdefender Internet Security (from $32 to $89.99 the first year, depending on the number of devices) and F-Secure SAFE ($34.99 to $139.99 a year, depending on the number of devices) as the programs with the best protection for consumers. Among free software, check out Bit­defender Antivirus Free Edition and Kaspersky Security Cloud Free.

If you need more help, hire a pro. Best Buy’s Geek Squad, for example, offers virus and spyware removal for $150.

Hacked passwords

The problem: Creating strong passwords and remembering them is a heavy lift without some help, and many consumers fall into bad habits; in 2020, the most common password was “123456,” according to password manager NordPass. If you reuse the same password on multiple accounts, a crook who grabs your log-in credentials for one website can use them to access other sites.

How to protect yourself: “Good password management is one of the best risk-minimization steps people can take. I can’t say that enough,” says Velasquez. A password manager—such as Dashlane, Keeper or LastPass—is a great tool to securely store log-in credentials and to generate strong, unique passwords for each account.

“Human-generated passwords are normally very weak,” says Fleming Shi, chief technology officer for security service Barracuda. Some programs offer a free, basic version that manages passwords on a single device as well as advanced options that provide management on multiple devices and other features for a monthly fee. LastPass, for example, is free for one user with one device, $3 monthly for one user with unlimited devices or $4 monthly for up to six users with unlimited devices. Paid accounts come with extras such as 1 gigabyte of file storage, as well as monitoring of internet black-market sites for your personal information. Your web browser may offer password management, but dedicated programs are typically more powerful and provide more features.

If you’re creating a password without assistance from a program, choose a password with at least 12 characters, says Velasquez. Using both uppercase and lowercase letters is a good idea, too. You don’t have to string together a nonsensical sequence of characters for the password to be secure. Instead, put together a “passphrase” by combining a few words—say, from a favorite song or quote. You could choose a core passphrase and alter it for each account to ensure unique credentials for each site, says Velasquez.

Add a layer of security by using multifactor authentication whenever possible. A website, for example, may send you a code by text message or e-mail when there’s an attempt to log in from an unfamiliar device and require you to enter the code for access.

What to do if you’re a victim: If you find out that your log-in credentials have been compromised, immediately change your password on the affected account. If you use the same password on any other accounts, change those, too (and choose unique passwords for each account this time). At www.haveibeenpwned.com, you can look up your e-mail address to see whether it and your passwords have been involved in any data breaches.

Compromised payments

The problem: Since the U.S. moved toward credit card and debit card transactions involving a microchip and contactless payment technology, counterfeit-card fraud has plummeted. But criminals can still snag payment information online—by compromising merchant websites, for example. And in 2020, fraud involving digital wallets and peer-to-peer payment services victimized nearly 18 million people, according to Javelin.

How to protect yourself: Avoid storing your payment information on retailer websites—it could be stolen if a hacker digs into the system. Some financial institutions, including Capital One and Citi, offer eligible cardholders the option of using a virtual card number for online purchases. The temporary virtual numbers differ from your real account number, sheltering it from fraud. When possible, access your bank account through the bank’s mobile app rather than logging in on a web browser—the app’s security features tend to be stronger, says Tracy Kitten, director of fraud and security practice for Javelin.

Check your bank and credit card accounts at least weekly—or even better, daily—for unauthorized purchases, and sign up for e-mail, text-message or mobile-app alerts from your financial institutions notifying you each time there’s a transaction on your credit and debit cards. When possible, make purchases with a credit card—it has stronger liability protections than a debit card.

Fraud involving peer-to-peer payment services, such as PayPal and Venmo, is often tied to scams in which criminals persuade victims to send them money. Before you transfer cash with a mobile service, verify that the recipient is someone you know and trust. Keep your Venmo transactions private rather than allowing them to be displayed publicly, says Liz Lasher, a vice president for credit-score company FICO. Crooks could take note of your transaction patterns, use the information to set up a fake profile that looks like yours and request money from your friends.

What to do if you’re a victim: If you notice unauthorized transactions on your credit or debit account, contact your financial institution immediately. It can block any further transactions and send you a card with a new number. Some issuers allow you to log in to your account online and switch the card off, rendering it unusable, if you’ve lost it or suspect theft. If you later find a lost card or discover that it has not been compromised, you can reactivate it.

Be aware of your liability protections under federal law. With a credit card, you will owe no more than $50 for unauthorized usage—and your liability is zero if the card number but not the card itself is stolen. With a debit card, it depends on how quickly you report theft; you won’t be held liable if your card number is used for unauthorized purchases (but the card itself hasn’t been stolen) as long as you report the charges within 60 days. If your card is physically lost or stolen, your liability could be unlimited if you wait more than 60 days to notify the bank of unauthorized charges; otherwise, liability is $500 or less.

Stolen Social Security numbers

The problem: Your Social Security number is the key that criminals need to wreak havoc on your identity. By piecing it together with other bits of your personal information, such as your name and date of birth, they could open new credit accounts in your name, file a false tax return to collect a refund, apply for unemployment benefits, receive medical care or rent an apartment—complete with utilities.

How to protect yourself: There’s not much you can do about institutional data breaches that reveal your SSN and other personal information to bad actors. But you can take steps to protect it in your everyday life. Don’t carry your Social Security card in your wallet, and shred unneeded documents that include your SSN. Be wary of giving away your SSN; government and financial institutions often have valid reasons to request it, but not all organizations need to use or store it. Binary Defense’s Pargman says that when a volunteer organization used his SSN and birth date for a background check, upon his request it agreed to remove the data from its records after the check was complete.

A credit freeze is the most effective way to prevent criminals from using your SSN to open new credit card or loan accounts in your name. When a freeze is in place, lenders cannot check your credit report in response to a request for new credit. Contact each of the three major credit bureaus—Equifax, Experian and TransUnion—to freeze your reports (for a step-by-step guide, visit kiplinger.com/links/freeze). You can freeze the credit records of your minor children and for individuals (such as elderly parents) for whom you’re a guardian or conservator or have a power of attorney.

The IRS recently began allowing all taxpayers—not just identity-theft victims—to get an Identity Protection (IP) PIN. If you sign up for one (go to www.irs.gov/ippin), you must provide it when you file your taxes. A fraudster who attempts to submit a tax return in your name will fail without the PIN.

In case a thief manages to use your SSN or health insurance information to get medical care, review all insurance explanations of benefits, and watch for bills for care you never received.

What to do if you’re a victim: Keep a close eye on your credit reports. Through April 20, 2022, the three major credit bureaus are offering free reports on a weekly basis—rather than the usual once per 12 months—at www.annualcreditreport.com. You can also get alerts of significant changes to your credit reports through services such as CreditKarma.com and FreeCreditScore.com. If you notice anything suspicious, such as the presence of a credit account you never opened or a collection account for a debt you don’t owe, contact the lender or other entity that furnished the fraudulent or erroneous information, and file a dispute with each bureau reporting it (see How to Fix Your Credit Report). If you’re a victim of tax-related ID theft, fill out and submit IRS Form 14039. The IRS will investigate your case and send you a notification once it is resolved.

Inaccurate information on your credit reports could hurt your credit score, and errors are not uncommon. Complaints to the Consumer Financial Protection Bureau about the major credit reporting agencies—Equifax, Experian and TransUnion—skyrocketed in 2020, and the majority concerned incorrect information, according to a report from the U.S. Public Interest Research Group.

Under the Fair Credit Reporting Act, you have a right to dispute information in your credit reports that you believe is inaccurate. Unfortunately, however, you can’t just send a complaint to the CFPB and watch the mistakes magically disappear. You need to take specific steps to get the credit agencies to scrub errors.

You can download or print your credit reports from each of the three bureaus for free at www.annualcreditreport.com on a weekly basis until April 2022. In general, the credit reporting agencies receive information about you from your creditors on a monthly basis. And while your credit reports should look similar, there will be some differences, because some lenders don’t report to all three agencies. For example, if you have a credit line with Affirm, which offers payment plans for online purchases, it may show up on your Experian report and not your Equifax or Trans­Union report. When you’re checking each report, make sure your address is correct and that information about lenders and your payment history is accurate for all of your accounts. For example, each entry should show when you’ve paid your bills and whether the payments were on time.

Disputing an error. If you find an error, you have three options: Call the toll-free number provided on the report, fill out the bureau’s online dispute form or write to the bureau. (If an error appears on two or three reports, you’ll have to contact all of the bureaus that are reporting the error.) Experts suggest starting with the online form. It’s typically the easiest to do, and you can attach documents, such as bank or credit card statements or letters from your lender, to support your contention that the information on your report is wrong.

Once a credit bureau receives your dispute, the bureau is required to conduct an investigation and contact the lender. The lender will then instruct the credit bureau either to update the information you’re contesting or to leave the info alone because the lender believes it’s accurate. After the lender responds to the credit bureau, the credit bureau is required to tell you the results of its investigation. Ideally, the credit reporting agency will get back to you within 10 to 14 days after you’ve filed your dispute, but it can take up to 30 days.

If a lender corrects an error, that should resolve your dispute. But things can get complicated if a lender contends that the information on your credit report is correct. If you’re convinced that the information is incorrect, you can file a new dispute. Credit expert John Ulzheimer suggests filing this dispute by mail because that will allow you to provide more detail than the credit bureaus’ online forms can handle.

Alternatively, you can go directly to the lender and state your case. Gerri Detweiler, credit expert and coauthor of Debt Collection Answers, did that when she applied for a car loan and discovered that her mortgage lender had reported that she had made six late payments. After she was transferred several times, she finally reached a representative with the mortgage lender who confirmed that the information was incorrect. From there, the mortgage company instructed each of the credit bureaus to fix the information on her reports. Detweiler’s mortgage company also sent her a letter through the mail confirming that her situation was resolved.

If you come to an agreement or resolution with a lender, make sure you get it in writing and save it for your records. That’s important because although you may get your error resolved more quickly by going directly to the lender, you could lose the right to get legal help if the lender mishandles your dispute.

If your credit reports contain errors stemming from identity theft, the bureaus must block the fraudulent items from appearing, as long as you follow certain procedures. According to the Federal Trade Commission, you must provide the following documents to the credit bureau (or bureaus, if the issue involves more than one report): A copy of a police report, a letter detailing the information that is fraudulent, and proof of identity, such as your Social Security number. If the credit bureaus determine that you were a victim of identity theft, they’ll notify the lender. For more information on what to do if you’re a victim, go to www.identitytheft.gov.

Caveats. Fixing an error on your credit report doesn’t necessarily mean your credit score will improve (correcting your address, for example, likely won’t have an effect). However, successfully disputing a late payment should help because payment history counts for 35% of your FICO score. If you have a debt in collection—an old medical debt, say—that’s reported twice, you should file a dispute, Detweiler says. Debts that have gone into collection are sometimes sold to other debt collection agencies, and that can lead to duplicate accounts on your report.

When reviewing your reports for errors, keep in mind that credit cards you have with retailers, such as Home Depot and Target, may show up under different names on your credit report. Retail credit cards are issued through financial institutions, such as Citibank and Synchrony Financial, so an account you don’t recognize could be legitimate.

Finally, keep in mind that the Coronavirus Aid, Relief and Economic Security (CARES) Act enacted last year requires lenders to report your account as current if you were adversely affected by the pandemic and were current on your account when you entered into an agreement to defer or make partial payments.

“Some lenders have been better than others at following the CARES Act rules,” says Matt Liistro, founder of National Credit Fixers, a credit repair company. If your account was incorrectly reported as delinquent, your best bet is to call the lender with your payment agreement in hand so it can contact the credit bureaus about the error.

If disputing an error (or errors) becomes overwhelming, you can outsource the work to a credit repair agency. Note, however, that credit repair companies can’t get accurate information removed from your report. Also, be sure to check with the Better Business Bureau (www.bbb.org) to see if there have been complaints filed against a credit repair agency before you enlist its help.

The three major credit bureaus — Equifax, Experian and TransUnion — now offer free weekly credit reports through AnnualCreditReport.com, making it easier to monitor your credit for errors and signs of fraud.

If you prefer not to use the website, you can also request your credit reports by phone at 1-877-322-8228 and receive them by mail, though delivery can take up to 15 days.

Checking your credit reports regularly can help you catch identity theft, reporting errors and fraudulent accounts before they become larger financial problems. Monitoring your credit closely also gives you more time to dispute mistakes, freeze your credit and protect your finances if something looks wrong.

Why should I check my credit report weekly?

ProPublica conducted an investigation and found that two of the credit bureaus have reduced resolutions on customer complaints filed by the Consumer Financial Protection Bureau. The CFPB works to help customers correct errors on their credit histories when the person complaining isn't responsible, such as fraudulent accounts being opened in their name.

TransUnion's resolution rate declined sharply in the summer of 2025. Equifax, which had a resolution of around 20% in 2024, dropped to 1% in 2025.

This prompted four US senators, led by Sen. Elizabeth Warren (D-Mass.), to send letters to these credit bureaus demanding to know why they weren't fixing as many customer complaints.

To be fair to credit bureaus, they're being asked to process many more claims now. This is in part due to credit-repairing agencies, which will flood each bureau with complaints, bringing solution outcomes down and taking more time to resolve legitimate complaints.

When you have incorrect information on your credit reports, it gives an inaccurate picture of your finances to potential lenders. Having missed payments, charged-off accounts and more can make it difficult to qualify for good rates on personal loans. You might even pay more for your insurance premiums.

What happens when you find errors?

Check each report for errors or signs of fraudulent activity, such as the presence of a credit card or loan that you never opened or a collection account for a debt that you don’t owe.

The most effective way to block identity thieves from opening accounts in your name is to put a free security freeze on your report from each bureau. (You can add a freeze at TransUnion, Experian and Equifax.)

When a freeze is in place, a creditor can't access your report in response to an application for new credit, thwarting crooks. If you want to open a credit account, you can temporarily lift the freeze.

Meanwhile, if you don't want to freeze your credit, review your reports weekly. You can also use a service such as myFICO, which sends you alerts anytime you have a credit inquiry, a new account is opened, etc.

This is the most effective way to stay on top of your credit health. Why? If you notice a new account that you didn't open, you can react promptly, calling the lender to shut down the account.

If you notice someone opened an account in your name without your permission, file a dispute with the credit bureau issuing the information. Next, the CFPB recommends reaching out to the lender to file another dispute.

How to save your future self thousands

Credit mistakes are on the rise, with 44% of people checking their credit reports having at least one error. Given that credit histories impact borrowing costs on loans, insurance premiums and more, it's vital to check your credit at least once per week.

If you notice errors on your report, freeze your credit, then follow the bureau's guidelines for filing a dispute. You should also file a dispute with the lender reporting the information.

Doing this can help you resolve a difficult matter and get your credit back on track.

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Update: The deadline to check your credit reports with the three major bureaus has been extended to April 2022. You can access them weekly for free.

Last spring, in response to the coronavirus crisis, the three major credit bureaus—Equifax, Experian and TransUnion—began offering consumers a free credit report every week at AnnualCreditReport, the federally authorized source of free credit reports. But unless the bureaus provide a last-minute extension, the free weekly reports will last only through April.

You’ll still be able to get a free report from each bureau through AnnualCreditReport once every 12 months, but you can see your reports for free more frequently through other websites that pull report data with your permission. If you create an account at CreditKarma.com, for example, you can see updated information from your Equifax and TransUnion reports once a week. You can also have the site monitor your reports for significant changes, such as the presence of a new loan or credit card, and send you alerts through e-mail or the site’s mobile app. And Credit Karma offers free updates of your VantageScore credit scores based on data from each of the two bureaus.

If you would rather get free Equifax and TransUnion reports directly from those bureaus, each offers services through its website. At Equifax, you can register for free monthly updates of your Equifax credit report and VantageScore credit score. And by signing up for Trans­Union’s TrueIdentity at Transunion.com, you get unlimited access to your TransUnion report and credit monitoring alerts.

To check your report from the third major bureau, Experian, you can enroll at FreeCreditScore.com, which Experian sponsors. The site provides a new free credit report and FICO credit score based on Experian data every 30 days, as well as credit-monitoring alerts.

To ensure that your reports remain free at any of these sites, skip pitches to upgrade to three-bureau report access or other services, and don’t enter your credit card number or other payment information.

In addition to the yearly credit reports at AnnualCreditReport.com, you’re entitled to a free report from the bureaus in certain other situations, including if you place a fraud alert on your report (a move you may make if you suspect identity theft); your report contains inaccurate information because of fraud; an adverse action has been taken against you (such as your application for credit being denied) because of information in the report; you’re unemployed and expect to apply for employment in the next 60 days; or you receive public assistance.

Reviewing Your Reports

Regularly checking your credit reports is im­portant in case a lender or other provider furnishes erroneous information to the bureaus, the bureaus mix up your file with that of someone else, or an identity thief opens fraudulent accounts in your name.

On your reports, make sure that all the accounts listed are yours and that the details on each —such as history of on-time payments, balances, credit limits and dates the accounts were opened — are accurate. Check that your address is listed correctly, too.

If you find a problem, contact the lender or company that provided the faulty data and file a dispute with each credit bureau that is reporting it. (You can get more information at Equifax.com, at Experian. and at Transunion.com.) Include an explanation of your dispute, the resolution you expect, details such as the account number and name of the lender or other furnisher, and any supporting documents, such as a bank statement showing that you paid a bill on time despite a lender reporting that you didn’t.

In addition to all of the other damage it has caused, the coronavirus pandemic has taken a toll on many individuals’ credit scores. If you lost your job because of the crisis, for example, and fell behind on your bills, your score is in danger of a precipitous fall. Need some extra cash until you’re back on your feet? Maxing out your credit cards or applying for several new cards at once could hurt your score, too.

The Coronavirus Aid, Relief and Economic Security (CARES) Act, which Congress passed last spring, includes some important provisions for borrowers. Even if you’re not facing difficulties now, it’s not a bad idea to brush up on steps you can take to keep your credit in good shape. You’ll be armed with knowledge in case you need access to credit later—and you’ll keep your credit reports in top condition by monitoring them for mistakes or fraud.

Check your credit reports

Through April 2021, you can get a free credit report online every week from each of the major bureaus—Equifax, Experian and TransUnion—at www.annualcreditreport.com. Typically, the free reports are available only once per year, but the bureaus have temporarily increased access in response to the coronavirus crisis.

Checking your credit reports closely and regularly is especially important if you have an “accommodation” on a loan—that is, forbearance or other relief, such as that available under the CARES Act. But regardless of whether you have an account in forbearance or in another program, make sure your credit reports are free of problems. Check that your name, current residence and previous addresses are listed correctly and that you recognize each account and inquiry on your report. If you see a credit card or loan that you never opened, a collection account that doesn’t belong to you, or a “hard” inquiry (more on hard inquiries below) from a lender or some other entity with which you’ve never done business, that may be a sign that an identity thief is at work. Review all legitimate accounts for accurate reporting of their payment history and balances.

If you find an error or an indication of fraud on your report, contact the lender (or other company that furnished the information) and ask it to fix the problem. You should also file a dispute with each credit bureau reporting incorrect information—that preserves your right to take legal action if the issue isn’t resolved. You can get more details and submit your disputes at the website of each credit bureau For more on how to successfully combat errors and fraud, see Battle the Credit Bureaus…and Win.

To help you keep tabs on your credit reports, sign up for a free service that sends you an alert via e-mail, text message or a mobile app if a significant change pops up, such as a new inquiry or account. A couple of the bureaus have their own programs that offer free monitoring of the reports they issue: TransUnion, with its TrueIdentity service, and Experian with its FreeCreditScore.com site. Or you can use a third-party service, such as CreditKarma.com, which provides free monitoring of your Equifax and TransUnion reports. When you sign up for any service, check that you won’t have to pay for it after a free trial period. If you must enter credit card or bank account information when you enroll, that’s a sign that you may be charged later.

Mend your credit score

Credit scores, which are calculated based on information in credit reports, are an important measure of a borrower’s credit health. FICO and VantageScore are two large scoring companies, and the standard scale for both is 300 to 850 (specialized scores designed for certain types of lenders or other companies often run on different scales). You may qualify for a loan with a credit score in the 600s, but an excellent score of about 750 or higher positions you to get the best terms, such as a low interest rate. A healthy credit history may also help you get an apartment, a wireless plan or a low rate on homeowners or auto insurance.

Payment history is the most influential factor in your credit score. If you’re late by 30 days or more on a debt payment and have no accommodation from the lender, your credit score will take a blow from the resulting delinquency on your credit report. Or if you miss several payments for bills with another company that doesn’t typically report payment history directly to the credit bureaus, such as a cell-phone or utility service, the account may be sent to collection—and that likely will show on your credit report and harm your score significantly.

The total impact of delinquencies depends on three main factors, says Tom Quinn, vice president of scores for FICO, which provides the credit scores that lenders most commonly check. One is the severity of the delinquency—missing a payment by 90 days is more damaging than being 30 days overdue, for example. How often you have paid late is a factor, too; a pattern of missed payments on multiple accounts is detrimental to your score. And the more recently you skipped a payment, the more it hurts your score. As time passes, the delinquency becomes less harmful.

Generally, the better your credit health before you pay late, the harder the hit to your score. In a simulation from FICO, someone with a 793 score, no record of delinquencies and an otherwise strong credit profile who pays a bill 30 days late would see a score drop of 63 to 83 points. That compares with a decrease of 17 to 37 points for someone who starts with a 607 score and has a previous 30-day missed payment and other less-favorable factors on his or her credit record.

“The good news is that there are things you can do,” says Christina Lucey, director of product management and financial advocate for Credit Karma. To start rehabilitating your score, catch up on missed payments as soon as possible, and make on-time payments going forward. On a credit card, paying the minimum amount due avoids a delinquency, although you’ll pay interest on the balance you carry from month to month (unless you have a 0% rate for some period). If the minimum isn’t manageable, ask your issuer whether it will lower the amount, allow you to defer a few payments or otherwise modify the terms until you’re in a better financial position. Signing up for automatic payments helps ensure that you’ll be on time, too.

You can also explore other ways to add positive payment information to your credit reports. For example, you can connect Experian Boost to your bank account and allow it to add positive information about your payment history for utility and cell-phone bills—and even for your Netflix subscription—to your Experian credit report. Experian says that on average, Boost users increase their FICO score (as calculated with Experian report data) by 13 points. Keep in mind that Boost information won’t appear on your reports from Equifax or Trans­Union or affect your scores based on those reports.

Free credit scores are easy to come by these days, so you shouldn’t have any trouble tracking yours. Your bank or credit card issuer may provide you with regular score updates. Or you can use a service such as Credit Karma, which offers VantageScore credit scores from your Equifax and TransUnion reports, or Experian’s FreeCreditScore.com, which provides a FICO score based on Experian report data.

Other ways to improve your score

Another big factor in your credit score is the amount you owe on your credit cards expressed as a percentage of your card limits—known as your credit utilization ratio. Your credit score considers the ratio both for each card as well as in the aggregate across all your cards. The lower the percentage, the better for your score. As a general rule, keeping your card balances to about 20% or less of your card limits should be beneficial for your score. But if you’re focused on improving your score, you may want to hold the ratio to less than 10%. FICO has found that those who have credit scores higher than 795 use an average of 7% of the credit available to them.

Although a missed payment weighs on your score for a while, your score typically recovers quickly from high credit utilization after you pay down card balances. The bottom line: If your card balances are near their limits for a bit—say, because you’re in a deferred-payment program, you’re making only the minimum payment or you’re using your cards more heavily to cover expenses while your income is down—don’t stress about the effect on your score.

As you practice good credit habits, letting time pass helps your score, too. Most negative information, such as missed payments, collection accounts, foreclosures and Chapter 13 bankruptcies, will slide off of your credit report after seven years. (Chapter 7 bankruptcies may remain for 10 years.) And a lengthening credit history is good for your score, too. The credit accounts of those who have FICO scores higher than 795 have an average age of 12 years, and the oldest account of a high scorer was opened 27 years ago, on average.

Take caution with new credit

If you need a lifeline while money is tight, you may be considering a new credit card or personal loan to get by. Or, if your finances are in good shape, you may want to take advantage of low interest rates to, say, refinance your mortgage. The first hurdle is qualifying—the recession has caused many lenders to tighten their standards. But you should consider the impact on your credit, too.

When a financial institution pulls your credit report for a credit card or loan approval, it results in a “hard” inquiry on your report. Usually, a single hard inquiry shaves only a few points from your score. But if you apply for several credit cards in a short time, the presence of multiple inquiries inflicts more damage. Hard inquiries affect your FICO score for one year and disappear from your credit reports after two years. “Soft” inquiries—which occur when you check your own credit report, for example, or when a credit card or insurance company peeks at your report to preapprove you for an offer—do not affect your credit score.

If you’re looking for a private student loan, auto loan or mortgage, credit scoring systems don’t penalize you if you shop around for the best rate within a few weeks’ time. FICO scores ignore inquiries for such loans made within the 30 days prior to scoring. And with newer versions of the score, any inquiries that appear within 45 days of each other are counted as a single inquiry.

Easing pain for borrowers

Under provisions of the CARES Act, if you are undergoing a financial hardship related to the pandemic and have a federally backed mortgage (such as through Fannie Mae or Freddie Mac), you’re entitled to up to 360 days of forbearance—which allows for paused or reduced payments—upon request. The law automatically suspended payments on federal student loans through September, too. And although they’re not legally required to, many auto lenders, credit card issuers and other creditors have been cutting breaks. About 23% of all consumers have received assistance of some kind, according to TransUnion.

The CARES Act also shields borrowers who enter a forbearance, deferred payment or other relief program (referred to as an “accom­modation” in the law) from damage to their credit reports. If you are current on payments when you start an accommodation with your lender and hold up your end of the deal, the lender must continue to report your account as current. If your account is delinquent when you start the accommodation, its status will remain delinquent until you return it to good standing; then the lender must report it as current.

If you do not bring the account to current status, the lender cannot increase the severity of the delinquency during the accommodation period. An account that was being reported as 30 days late when you started an agreement, for example, may not be reported as 60 days past due during the accommodation. Creditors must follow these rules until 120 days after the end of the COVID-19 national emergency (as of mid August, the emergency was still in effect).

When you enter an agreement with your lender, make sure you understand the terms, and get them in writing. Documentation may help you later if the account’s status is reported incorrectly. It’s also a good idea to ask the lender how it will report your account to the credit bureaus, says Amy Thomann, head of consumer credit education at TransUnion.

If you are nearing the end of an accommodation period and are concerned that you still won’t be able to keep up with payments, contact your lender as soon as possible. It may be willing to extend the agreement, helping to protect your credit profile. But keep in mind that depending on the terms, interest may continue to accrue, and eventually, you’ll likely have to make up for missed payments.

As lenders and credit bureaus adjust to the new rules, mistakes on your credit records are more likely to happen. If an account was current going into the accommodation, you should see its recent status listed as “current” or “OK” or with a check mark, depending on which bureau’s report you’re viewing, says Geoff Smith, vice president of consumer scores for FICO. In addition, you may see comment codes that provide more information. For accounts that are in an accommodation related to the coronavirus crisis, some lenders are using the code AW to indicate they are affected by a natural or declared disaster, says Smith. If you see the code AC, which means “paying under a partial payment agreement,” contact your lender and file a dispute with the credit bureaus. “This comment code is considered negative by FICO scores and should not be used for forbearance and deferment programs due to corona­virus,” says Smith.

Don’t let the credit bureaus freeze you out

As data breaches have piled up—including a major hack of consumer data from credit bureau Equifax in 2017—more consumers are taking advantage of the credit freeze (also known as a security freeze) as one of the best ways to prevent identity theft. When you freeze your credit reports, lenders cannot check them in response to an application for a new credit card or loan, blocking criminals from opening credit accounts in your name. You can place and lift a freeze for free with each major credit bureau—Equifax, Experian and TransUnion.

Like most any other interaction with the credit bureaus, however, freezing and thawing your credit reports may come with complications. Use these tips to smooth the process—or to overcome any obstacles in your path.

Beware identification problems. When you attempt to place or lift a freeze, the bureaus will match the identifying information that you provide with data in your credit report. If anything is amiss, the freeze request may not go through. A recent change in your address or surname, for example, could cause verification issues.

If you run into difficulties when you request a freeze online or through an automated phone system, try to reach a live human on the phone—he or she may be able to work out the problem on the spot. Otherwise, you may have to mail in copies of identifying documents, such as a driver’s license and utility bill, before the bureau will proceed with a freeze request.

Hang on to your PINs and passwords. Depending on the bureau, you may have to provide a PIN or password to unfreeze your report. Equifax and TransUnion allow consumers to create password-protected online accounts through which they can manage freezes. With Experian, you’ll have to provide a PIN that you receive when you first freeze your report; the same is true if you unfreeze your TransUnion report over the phone. Equifax allows you to unfreeze your report over the phone by providing certain identifying information and submitting a one-time PIN that you receive by text message or by answering security questions.

Keep your PINs and passwords in a safe place at home. If you lose your Equifax or TransUnion online account password, you can enter some personal information to verify your identity and go through steps to reset the password. Through your TransUnion online account, you can reset your PIN to use on the phone, too. If you forget your Experian PIN, you can obtain it by going to www.experian.com/freeze and providing identifying information.

Leave some extra time. If you ask for a freeze online or over the phone, the credit bureau must place it within one business day. For online or phone requests to temporarily lift or permanently remove a freeze, the bureaus must act within one hour. But if you run into any identity or security problems, you may need extra time to contact the bureaus or mail documents to them before the freeze is placed or lifted. If you want to lift a freeze to get a credit card or loan, consider requesting it a couple of weeks before you apply.

As obvious as it may sound, try not to forget that the freeze is there in the first place—which may be easy to do if you haven’t had any reason to lift the freeze in a long time. Ted Rossman, industry analyst for CreditCards.com, says that when he applied for a credit card without first removing the freeze on his reports, he had to wait several months before the issuer would let him reapply.

Banks are pulling back on their risk exposure by cutting credit card limits or canceling cards altogether, says Ted Rossman, industry analyst at CreditCards.com. As a benchmark, consider that during the Great Recession, the October 2008 Fed Senior Loan Officer Survey found 20% of card companies cut credit lines for customers with good credit scores and 60% reduced lines for subprime cardholders.

Unused cards are prime candidates for cancellation, so if you haven’t made a purchase on a card in a while, buy something small and pay it off right away, says Rossman. Keeping cards open helps your credit score because it aids your credit utilization ratio — the credit you’re using divided by your credit limit. Your credit limit could be cut or your card canceled if you get close to your credit limit. If you’re having trouble making payments, let your card issuer know. It will probably work with you on a payment plan (see Milliennials Face Their Second Recession).

During the Great Recession, banks also froze home-equity lines of credit as home prices plummeted. So far, home prices haven’t shown signs of distress, but Wells Fargo and Chase are among large banks pausing HELOC applications.

Ryan Ermey: FICO is unveiling a new scoring model, which depending on your behaviors could affect your credit score. Credit expert Gerri Detweiler breaks everything down in our main segment. On today's show, Sandy and I discuss the S&P 500 entering bear territory and tell you why your portfolio needs to be tax diversified. That's all ahead on this episode of Your Money's Worth. Stick around.

• Episode Length: 00:25:43
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Ryan Ermey: Welcome to Your Money's Worth. I'm Kiplinger's associate editor Ryan Ermey, joined as always by senior editor Sandy Block. Sandy, we are still here.

Sandy Block: We are still here for the moment. This has been a tumultuous week for everyone.offices on Monday and a new studio. And there is a possibility that Sandy and I are going to be recording remotely here at some point, but we are going to try to keep everything on the tracks for all of you folks who are interested in hearing about your personal finances. And I wanted

Ryan Ermey: Yes. And we are moving offices as we record on Friday the 13th, we will be at new to kick the show off with a little bit of a market talk and we're going to be on top of this, into all of the ways that the coronavirus is affecting people's finances. But we also do want to keep in mind that people's financial lives go on.

Ryan Ermey: So it's not going to be the corona hour every episode, but we are going to be commenting when we see it as particularly important. So as of yesterday's closing, like I said, we were recording on the 13th here. The Standard & Poor's 500 stock index had reached bear market territory. So it's, as we've discussed before, a decline of 20% or more from the indexes previous high, in this case back in mid-February. So it was an extremely rapid decline. It took just 16 sessions for all of this to go very south. The coronavirus pandemic, the ensuing plunge in oil prices. So the 11-year bull market comes to an extremely swift end.

Sandy Block: Right. And I think the other thing that has a lot of people on edge is that this sharp decline in the market also comes at a time when many people are starting to worry about their jobs. They might work in the tourism industry, they've been told to work from home. There's a lot of talk about whether this pandemic is going to push the economy into a recession. So even though a bear market is not surprising, we've been saying that that's just sort of how cycles go. This is pretty extraordinary in the confluence of events that threaten your economic security.

Ryan Ermey: It's during times of extreme volatility and uncertainty like these that I tend to rely on people who have been watching the market for much longer than I have and rely on historical data to try to tell us how to sort of make sense of this. Sam Stovall is someone who I like to read. He's the investment chief -- investment research chief. Sorry, Sam, if I don't get your... we talk all the time. I just call him Sam, at CFRA, which is an investment research firm. And tracking prior bear markets. And this is the 13th since World War II, tracking prior ones, the ones that have experienced the swiftest sell-offs have historically resulted in rather shallow declines. And, so, prior bear markets hitting the threshold faster than average have logged declines of just 26% compared with 33.5% which is the average for all bear markets. So the ones that drop fast tend to drop the least.

Ryan Ermey: Another note from Tony Dwyer at Canaccord Genuity is that just because you think you might be near the bottom of a bear market, it doesn't mean that it's over. So just because we're expecting perhaps a shallower than average decline, doesn't mean that we're feeling out the bottom quite yet because right now the market, he says, is likely to move more based on human nature rather than fundamental data, which is what typically drives markets, right? Corporate earnings and valuation expansions and dividends. So we are experiencing very much the sort of panic phase of this crash, which eventually there is going to be some kind of relief phase, some kind of understanding that the markets in the world aren't coming to an end and then we're going to trying to set the bottom here. But he does believe nevertheless that the bulk of the crash, at least in terms of percentage drop, has already happened.

Sandy Block: That's interesting. And there has been a bit of a soft, some comeback today, although the market is up, although not by a lot. So it sounds like there's going to be a lot of bouncing around just because there's so much uncertainty now about how long this coronavirus is going to last and what its impact is going to be.

Ryan Ermey: Right. So, we're not making any prognostications in terms of what the market's going to do. We are going to reiterate the advice that you stick to your investing plan. Invest in line with your tolerance for risk. Hopefully you have some manner of dollar cost averaging in place. I personally have my 401(k) set to make auto contributions and I'm not looking at it for now. So, we want to tell everyone, who's really worried about the market, hang in there. We're going to come to you with more information as we collect it. Coming up Gerri Detweiler tells you everything you need to know about changes to the FICO Score.

Ryan Ermey: We are back and we're here with Gerri Detweiler. She is a credit expert. She's the education director for Nav, a business credit and financing website. Gerri, thank you so much for coming on.

Gerri Detweiler: Oh, thank you.

Ryan Ermey: So, today we're talking about the new FICO score, which many of our listeners may have seen in the news. What, Gerri, is the impetus behind introducing this new FICO scoring system? And broadly, how does it differ from the current scoring model?

Gerri Detweiler: Sure. So FICO 10, and in particular FICO 10 T, takes advantage of something that's relatively new, it's called trended data. And so what it does is it gets a view of your credit over time and uses that information to calculate your credit score. In the past, your credit report has traditionally been a moment or a snapshot in time. So, yes, it has information about accounts you've held for many years, but it doesn't show, for example, whether last month you had a high balance on your credit card and this month you have a low balance or last month you paid in full, but this month you're not. So this new trended data will allow the credit score to capture trends, especially in balances like on things like credit cards. So it can see if your balances are going up or going down or even if you're shifting balances from one type of debt to another.

Sandy Block: So with that in mind, Gerri, who's going to see their scores possibly go up under this new formula and who might actually be hurt by it?

Gerri Detweiler: Well, FICO says that consumers with strong credit scores are likely to continue to see strong credit scores and they may even see their scores go up. Conversely, they said that consumers who have low credit scores, and are struggling, are probably going to see their credit scores go down. But I think there's one group of consumers that in particular could be impacted by this score and that's consumers who are consolidating credit card debt with personal loans. One of the strategies that works right now often, if your high balances on your credit cards are hurting your credit score, is to take a personal loan, pay off the credit card, leave it open, and reduce that debt usage or utilization ratio that can hurt your credit score.

Gerri Detweiler: It appears that FICO 10 T may be able to identify that behavior and that strategy may not work as well in the future as it has in the past. I still recommend consumers, who are trying to pay off their credit cards, consider a consolidation loan because it may help them get out of debt faster and get off that minimum payment treadmill. But in the future it might not be as an effective strategy for boosting your credit score.

Ryan Ermey: So when do we expect that this form of scoring is going to actually be adopted by lenders? And furthermore, there's a lot of different scores out there. What should people really be looking at?

Gerri Detweiler: Well, this is the question I get all the time, right? What is the most important credit score? What's my real credit score? And consumers don't even realize that there are more than 40 different versions, just of FICO scores available. There are ones for bank cards and ones for auto loans, and a different one that's used for mortgage lending. So I would say first of all, this score is new. It is going to be introduced in the summer of 2020 and issuers tend to be pretty slow to adopt new models, especially traditional lenders like banks and credit card issuers. They want to stick with what they know works and what will help them make the right decisions.

Gerri Detweiler: So don't anticipate this happening overnight. But trended data is a trend in a direction where I think the industry is going. So over time I think it will be more and more common for credit scoring models and lenders to look at trended data and look at the insights that information provides. So you can still prepare for it just by trying to pay down your credit card debts and trying to keep your debt levels manageable and of course paying your bills on time. That's always positive behavior for any credit score.

Sandy Block: So it sounds like, Gerri, sort of the regular, the advice that you have always given people would still hold, it might be even more relevant in this new scoring environment.

Gerri Detweiler: I think absolutely. Unfortunately some quicker fixes like shifting around those credit card balances may not work as well in the future, but it is a while out before we'll see this widely adopted and it just emphasizes, again, the strategy of paying down those credit card debts can help you save money, get out of debt and it's a good thing for your credit scores as well.

Ryan Ermey: Well, I mean, as Sandy put it, your normal advice is still what's going to be working. But for all of our devoted listeners who may not have heard your typical advice, what advice do you have for people who either have good scores and are looking to maintain them or for people who are doing a little bit of repair work on their score?

Gerri Detweiler: I think that the two things that are going to impact your scores the most are your payment history and your debt, in particular those balances on your credit cards as compared to the credit limits. So with payment history, as negative information gets older, it does carry less weight. So if you can get information off your credit report through a dispute, for example, that's great, but if you can't, understand that as long as you keep paying on time, as that information gets older, it will have less impact on your credit scores. And then on the debt side, it'll look at those credit card balances. There's no magic number that you have to stay below. It's not 30% or 28%, FICO says it can vary depending on the information your credit scores.

Gerri Detweiler: But what I tell consumers is try to keep each of your credit cards at, let's say the starting goal is 30% debt usage, so you're within 30% of your available credit. And then if you don't see the results on your credit score that you want, try to going down to 25% on all of them, then 20%. As you can pay down those debts, many consumers will see their credit scores increase.

Ryan Ermey: Now, and this is a habit that I may be outing myself a little bit here, but occasionally I try to pay my credit card down every single month, pay the whole balance down. But, sometimes maybe I'll have like a big flight, because I have to go to a bachelor party or something. I put that on my credit card. Maybe I don't pay my whole balance off and the balance is fluctuating in my account. Is that going to be different or a bigger or lesser deal under the new scoring system? Because it sounds like they're going to be keeping track of trends in your balance.

Gerri Detweiler: Yeah. The one thing that credit score doesn't do a good job of identifying right now, and I don't see this changing immediately, is that there's a lag between when you get your bill and when it's due and when you make your payments. So typically most issuers report at the end of your billing cycle. That's when they tell you how much you owe this month and offer to let you make the minimum payment or pay in full. And then there's, you usually have about 25 days to make that payment and in the meantime you're making the payment but that isn't reflected on your credit report. So one strategy that may help, if high balances are affecting your credit score. And this can affect someone like me who loves my rewards cards and always pays in full. I might have a high balance one month, right?

Gerri Detweiler: I will go online a few days before the due date and make a payment online so that the balance at the end of the billing cycle, at the end of that month, which is listed on your statement, is lower. And that way the amount reported to the Credit Bureau is lower, as well. So I think that could be a strategy for someone who pays in full but really wants to get the most out of their rewards cards and sometimes does have a higher balance, even though they pay it in full.

Ryan Ermey: Well, fantastic. I mean, what's the point of having a personal finance podcast if I can't occasionally ask the experts about my own finances? So, Gerri, we really appreciate you coming on. Where can people go to find all of the wonderful stuff that you're working on?

Gerri Detweiler: Sure. You can find me on the Nav blog. I answer questions, as well as write lots of stories about credit.

Ryan Ermey: Well, fantastic. And we also have a story about the new FICO scoring in the April issue of Kiplinger's Personal Finance, should be on newsstands in your mailbox now. Gerri, thank you so much again for coming on.

Gerri Detweiler: Oh, my pleasure.

Ryan Ermey: After the break, Sandy breaks down why you need a mix of Roth and traditional retirement savings accounts. Don't go anywhere.

Ryan Ermey: We are back and before we go, Sandy, you wanted to talk a little bit about diversification, but not in the way that we often think about diversification when it comes to investing.

Sandy Block: Right. And we always talk about the importance of diversifying your portfolio and that's very real now, because a diversified portfolio is going to be hit a lot less hard than one that's unbalanced in times like these. But tax diversification is important too. When you retire, people have gotten pretty good about putting money in their 401(k)s and maybe an IRA and that's all good. And we... want to fault anyone for doing that. But remember that when you retire and take that money out, if it's in a traditional 401(k), traditional IRA, that money is tax deferred and you will pay taxes on it when it comes out. Fortunately, now we have tools that you can use to reduce the tax bill when you retire and the two are a regular Roth or a Roth 401(k).

Sandy Block: And I think if you're being smart now and continually investing, because you're basically buying stocks at a bargain, so you're contributing to your 401(k) regularly, not looking at it as Ryan said. If your company offers a Roth 401(k), it's really smart to put some of that money there, because you won't get the tax break on that money now, but when you retire and take it out, you won't pay taxes on it. So all the future growth and say right now you're buying stocks cheap, someday the market recovers and all that growth that you get between now and you retire will be tax free.

Ryan Ermey: Right. So not only is the money that you put in tax free when you take it out, but all of your earnings on that money is tax free...

Sandy Block: Right. So, it's really valuable. If you don't have a Roth 401(k) at your job, you can still invest in a regular traditional Roth. There are some income limits, but in particular...

Ryan Ermey: Roth IRA.

Sandy Block: ... Roth IRA, excuse me. Traditional IRA is one where you get a tax deduction. A Roth IRA is again after tax. They're a great idea for young people, because when you're young, you're not getting that much of a break on taxes by deducting them anyway. But with the Roth you can put the money in, it grows and grows and grows and then you take it out. One other nice thing about a Roth, and I don't really encourage this, but it's good to know, is that you can always withdraw your contributions tax free. So a Roth can be a backdoor emergency fund, if you really, I mean I believe you should leave that money in there for retirement, but if you hit a really rough patch, like right now, maybe you're out of work or you furloughed or something like that, you can tap that money up to the amount that you contributed. No penalties, no taxes.

Ryan Ermey: Once again, you can't take your earnings out of it.

Sandy Block: You can't take the earnings out. But you can take out what you put in. And again, that's not really what this is designed to do, but it's a nice thing to know. And Roths aren't for everyone. There are situations where maybe the deduction is better and we're going to have a pretty serious discussion of this in the May issue, to Roth or not to Roth. But again, as you look at saving for retirement, which you should be continuing to do, don't just think about your investments -- think about your taxes, as well.

Ryan Ermey: So I've always told young people if you have a choice, get a Roth. You're probably in a low tax bracket now, you can pay on that nice low tax bracket, then you let your money and your earnings grow tax free. So you get a big tax advantage with a Roth. But should I, if I'm a young person thinking down the line, should I not have all of my investing eggs in one basket?

Sandy Block: If you are investing all of your money, all of your retirement savings is going in a 401(k), I think it's a good idea to have a little bit of both. Put some money in a regular 401(k), some money in a Roth. Even if you direct all of your contributions to a Roth 401(k), any match is going to go into the pretax 401(k). So you're going to have some pretax money there anyway. But I think it's just good to, and as you progress, maybe you do value the tax break a little bit more. So maybe you do want to put a little more in a regular 401(k) but I think it's just a good idea to have some of both. It gives you so much more flexibility when you retire to have some tax free money, some money that will be taxed and even a taxable account, if you can afford it, have a brokerage account, that capital gains rates now are pretty low and that can be a pretty tax efficient source of retirement savings as well.

Ryan Ermey: Right. And the other thing to think about, especially if you're in retirement now, is that a certain kind of retirement vehicle requires, you take required minimum distributions from it.

Sandy Block: Right. If you're 72, you have to take money out of your tax deferred accounts. And that's another reason. And one other thing I want to mention, I mentioned it a couple of weeks ago, but it's unfortunately even more relevant today, is that if you have a lot of money in an IRA and you want to convert it to a Roth, remember that you have to pay taxes when you do a conversion, but you pay taxes on the value of the IRA when you convert. Well, right now if your IRA is taking a big hit or maybe in a couple of weeks it takes an even bigger hit. That is an opportunity to convert it. You convert it to a Roth, you don't have to convert it all, convert some of it to a Roth. When the market recovers, everything you gained from then on is tax free. So this is an opportunity that, again, make sure you can pay the tax bill, but sometimes the market does hand you opportunities in ways you don't see. And this would be one.

Ryan Ermey: All right, well, all fantastic stuff. We will have more coverage of this in the May issue of Kiplinger's. And for anyone listening from working from home or in quarantine or whatever, please let us know if there are pertinent financial topics that you are running into that maybe the editors here at Kiplinger's haven't thought about. Things that we'd love to be able to cover for you. Questions that we'd love to be able to answer for you. Obviously, this is going to uncork a whole host of financial questions that we may not have even considered. So email podcast@kiplinger.com, ryan_ermey@kiplinger.com, sandra_block@kiplinger.com, please write to us. We want to be reaching out to you if at all possible.

Ryan Ermey: That's it for this episode of Your Money's Worth for show notes and more great Kiplinger content on the topics we discussed on today's show visit Kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at podcast@kiplinger.com. And if you like the show, please remember to rate, review and subscribe to Your Money's Worth wherever you get your podcasts. Thanks for listening.

Links and resources mentioned in this episode

• Yardeni.com: A History of Bull and Bear Markets
• Nav Blog
• Changes Are Coming to Your Credit Score
• 7 Habits of People With Excellent Credit Scores
• Take the Scenic Route: Diversification on the Road to Retirement
• How to Keep More Money in Retirement: Diversification That Minimizes Taxation
• Why You Need a Roth IRA
• Nearing or In Retirement? Capitalize on Tax Cuts with a Roth IRA Conversion

In today's digital age, data breaches have become all too common and leave unsuspecting consumers vulnerable to a host of identity theft issues. From AT&T to National Public Data, no industry seems to be safe from determined hackers. Last year alone, 17 billion records were exposed in reported data breaches, according to Flashpoint.com, a Washington, DC based cybersecurity risk management firm.

If you've been notified by your credit card company, a retailer you visit often or another trusted source that your sensitive information has been compromised, you'll need to act fast. Taking action within the first 48 hours is the difference between stopping identity thieves dead in their tracks or having them wreak havoc on your financial life for months to come, suggests Carrie Kerskie, president of Kerskie Group LLC, a Naples, Fla.-based company that helps identity fraud victims recover.

We've combed through our archive of tried-and-true advice, spoken with industry experts, and reviewed the Federal Trade Commission's consumer tips to find out what steps you should take immediately after discovering you're a data breach victim. Here's where to start.

Discovering that your sensitive personal information has been compromised can be scary. Even still, that's not an excuse to let panic stop you from taking the appropriate measures before it's too late. First, you'll want to find out what information was compromised, says Andrew Schrage, co-owner of the personal finance blog MoneyCrashers.com. This step is vital, because depending on the type of information that was exposed you may need to address it more urgently.

For example, in 2024 the UnitedHealth Group cyberattack at its Change Healthcare unit data breach included Social Security numbers, credit card data, bank account numbers, medical record numbers, providers, diagnoses, medicines, test results and more. An identity thief using your Social Security number to open new lines of credit can be detrimental to your credit history for months afterwards. In this scenario, you would want to immediately notify the major credit bureaus, your credit card provider, and your bank. But a data breach that exposes only phone numbers and e-mail addresses isn't nearly as severe and wouldn't warrant an immediate response.

If you are unsure about the appropriate course of action, go to the Federal Trade Commission's (FTC) IdentityTheft.gov/databreach website for recommendations on how to proceed based on the type of personal information that was exposed in any particular breach.

Armed with your sensitive personal information, it may not take skilled hackers long to figure out the password to your e-mail or bank account — especially if it's something as simple as your birthday or pet's name. That's why you should change the passwords to all of your pertinent accounts as soon as possible.

To avoid having to remember a long list of online passwords, use a password manager. We often recommend LastPass, which uses a browser extension to store multiple account passwords and encrypts that information. To help make it easier, you'll only need to remember the LastPass password rather than a long list of passwords. The service includes a multifactor authentication login process. This means in addition to inputting your "master" password, you'll have to input a special code sent to a secondary device (such as a text message to your smartphone) before the login process is complete.

LastPass offers several different plan types including a free version. Their premium plans, which range in price from $3 to $7 per month, are available for personal or business use and include encrypted file storage.

To help prevent further fraudulent activity, be sure to sign up for transaction alerts for your bank and credit card accounts. In doing so, you'll be notified by e-mail or text message whenever there's a new charge to your account.

Be sure to set up the notifications for the lowest transaction amount possible. That's because crooks will test accounts with small charges first before making larger ones. If you start to see charges you don't recognize, contact your bank or card issuer immediately.

For an added layer of protection, consider placing a fraud alert on your credit reports. (You can request a fraud alert if you've been a victim of a data breach or if your wallet, Social Security card or other form of personal identification has been lost or stolen, according to the FTC.) A fraud alert requires a business or financial institution to verify your identity first before issuing a new line of credit. It's free and remains active for one year. If necessary, you can even renew it. 

• How to do it: Contact one of the major credit bureaus and request a fraud alert on your credit report. Each credit bureau is required to notify the other bureaus about the alert. Make sure your most recent contact information is on file.

If you want to lock down your credit even more, put a freeze on your credit (also referred to as a security freeze). With a freeze, potential new creditors aren't even able to access your credit history to determine if you're eligible for a loan or new credit card. When the time comes to lift the freeze — say, you're looking to purchase a home or buy a car — you can do so temporarily and reinstate the freeze later.

A credit freeze is free. To get started, you'll need to contact all three major credit bureaus (Equifax, Experian and TransUnion). The quickest way to do this is over the phone or online. You'll want to have your Social Security number, birth date and home address handy, because you'll be asked to supply this information to help verify your identity.

Managing a security freeze is simple, and in most cases you can do it on your own, Griffon Force's Kerskie notes. On Equifax.com, for example, you can log into your account to set up a freeze, lift it temporarily or cancel it.

Chances are, you'll be on high alert in the weeks and months after your sensitive personal information has been compromised in a data breach. This is the time to be extremely vigilant and keep a close eye on your credit report. Doing this will help you flag any suspicious activity as soon as it happens.

There are several sites and online services where you can get a free copy of your credit report on a weekly, monthly or annual basis:

AnnualCreditReport.com: This is the only place where you can request a complete report from all three major credit bureaus annually. The report will be dense with text, and the level of detail can be overwhelming.

CreditKarma.com: Register to get weekly, comprehensive updates on your Equifax and TransUnion credit reports. The site also provides financial calculators and other resources to help you better understand your credit history.

Experian: You'll have to register and create an account on their website to receive a free updated Experian credit report every 30 days. You can also get notification alerts to help identify potentially fraudulent activity.

Also, don't underestimate the importance of carefully examining your banking and credit card statements, advises Kimberly Palmer, a personal finance expert for NerdWallet.com. "Sometimes the first sign of identity theft is an erroneous charge on a monthly statement," she says.

E-mail addresses and phone numbers are often included in data breaches. For example, contact information for 3 billion people was exposed in the National Public Data data breach this year. Armed with this information, crooks can target unsuspecting victims with e-mails, text messages or phone calls aimed at tricking them into divulging more personal information — or even collecting money. In many cases, they'll pose as official representatives of a financial institution or a federal government agency. They may try to pressure you on the spot into making a payment for an overdue bill or threaten legal action.

It's important to remember that a federal government agency, such as the IRS, won't ever call you and request payment of any sort over the phone. The IRS always sends notification via snail mail if there's a legitimate situation that needs to be addressed. 

With potential e-mail scams, don't click on any links or open attachments that look suspicious. Doing so could infect your computer or smartphone with malware, allowing scammers to gain access to your device without your knowledge. 

Lastly, never authenticate yourself over the phone when contacted by someone you aren't sure is who they say they are. If you're doubtful, look up the phone number for the institution this person is claiming to represent, and call it to see if it actually contacted you.

You probably know that your credit card comes with an interest rate, a limit on how much you can spend and a minimum amount that you must pay each month. But if you’re not familiar with the nuts and bolts of each card component, take a little time to brush up. Knowing the types of activities that trigger a cash advance, for example, could save you a bundle in interest and fees, and smart use of the grace period lets you finance a purchase interest-free for several weeks.

Annual percentage rate (APR). If you don’t pay your statement balance in full by the payment due date, you’ll accrue interest on the unpaid amount (unless your card is charging a 0% APR for an introductory period). Recently, the average rate ran about 17%, according to the Federal Reserve. But many cards come with a range of possible APRs, and the customers with the strongest credit histories capture the lowest rates.

Most credit cards have a variable rate, typically composed of the prime rate plus a “margin” of a set number of percentage points. Each time the Federal Reserve changes the federal funds rate, the prime rate moves in tandem. In the second half of 2019, the Fed cut rates three times, each cut one-fourth of a percentage point. As a result, many cardholders saw their APRs fall by a total of 0.75 point. When a variable APR changes because of an increase or decrease in the underlying index, the new rate applies both to existing balances and new purchases.

By law, card issuers generally can’t bump up your APR the first year you have the card; after that, they have to provide 45 days’ notice before raising it. (Increases resulting from a rising indexed rate or the expiration of a promotional period don’t fall under those rules.) Such hikes affect only new purchases, not existing balances. If a bill payment is 60 days late or more, the issuer can raise the APR on your existing balance with 45 days’ notice. But if you make timely payments for six months following the increase, the issuer must remove the penalty APR.

Grace period. Most cards offer an interest-free window on purchases between the time a billing cycle ends and the payment due date. The grace period must last at least 21 days. If you’re planning to make a large purchase, consider doing so near the beginning of the billing cycle—that gives you nearly two months to pay it off without interest. If you’re carrying a balance from month to month, the grace period disappears, and interest accrues immediately on new purchases.

Minimum payment. The minimum monthly payment is often the greater of 1% of the balance (plus interest and fees) or some flat amount—say, $25 or $35. Paying only the minimum may result in thousands of dollars in interest charges over time.

Credit limit. Your credit history, your income and the amount of credit available to you from other cards typically help determine the cap on your total balance. If you’re new to using a credit card, the maximum may be only about $500 to $1,000 at first, says Kimberly Palmer, of personal-finance website NerdWallet. Over time, your issuer may periodically raise your limit, and eventually the maximum could reach tens of thousands of dollars.

A record of on-time payments and a growing income help boost your limit, so you may want to heed any prompts from your issuer to update your income; the reminders often show up by e-mail or when you log in to your account online. Notably, a card issuer may consider your spouse’s or partner’s income if you’re 21 or older, even if he or she isn’t named on the account and you don’t earn income yourself.

You can also call your issuer and request a credit-limit increase. Even if you don’t want to spend more on your card, a higher limit could boost your credit score if it will decrease your credit-utilization ratio—the amount of credit that you use as a percentage of your card limit.

Balance transfer. Some cards offer an attractive rate (often 0%) for a set period for balances you transfer from other credit cards. However, you may pay a fee of 3% to 5% of the amount you transfer. You can find exceptions: Chase Slate and American Express Every­Day offer 0% interest for the first 15 months and levy no fee if you make the transfer within 60 days of opening the account. You’ll still have to make a monthly minimum payment, and after the introductory period closes, you’ll likely be charged a variable rate in the double digits. Or consider a card with a low fixed rate on transfers. Such cards are most commonly offered through credit unions, says Ted Rossman, of CreditCards.com.

Cash advance. A cash advance, which allows you to withdraw cash against your credit line, should be a last resort. It typically comes with a hefty fee that’s the greater of about $10 or 3% to 5% of the amount withdrawn. And you’ll be slapped with interest immediately, often at a rate that’s much higher than your APR for purchases.

An ATM withdrawal with your credit card is only one way to incur a cash advance. If you use your card as a backup source of funds in case you overdraw your bank account, any overdraft transfer from your card will likely be regarded as a cash advance. If you write a convenience check—which your card issuer may send you in the mail to use much as you would a check tied to a bank account—the withdrawal will be considered a cash advance. If your card permits gambling transactions (many don’t), such as for online gaming, they may be treated as cash advances, says Rossman.

Fees, fees and more fees. Choose and use your credit card carefully and you can dodge fees. Annual fees often come with cards that offer rich rewards in cash back, points or miles. The fees are commonly in the neighborhood of $100, although they can run much higher for premium cards. Some cards waive the fee for the first year of card membership. An annual fee may be worth paying if you reap enough in rewards and benefits. But you can find many generous rewards cards that don’t have an annual fee.

Cards that carry a foreign-transaction fee ding you every time you use your card outside the U.S.—usually about 3% of the transaction amount. The number of cards that charge such fees is on the decline, and most travel-oriented rewards cards don’t have them. Some issuers, including CAPITAL ONE and Discover, omit the fee on all of their cards. If your card does have a foreign-transaction fee, avoid using it on a website based in another country. “You could be at home shopping in your pajamas and end up getting hit with a foreign-transaction fee,” says Matt Schulz, of CompareCards.com.

A credit card’s late-payment fee is limited by federal rules, and the cap is adjusted annually for inflation. In 2020, a card issuer may charge as much as $29 for the first violation and $40 for any subsequent late payments in the following six months. If you miss a payment, ask the issuer to waive the fee—there’s a good chance you’ll succeed if you’ve otherwise been a reliable customer. The Citi Simplicity and PenFed Promise cards charge no late fee, and Discover doesn’t levy the fee for the first late payment on any of its cards.

If you have a credit card from Chase or Citi, you may be able to borrow against the unused portion of your credit line in the form of a loan. Both issuers are touting the loans to select customers as a quick and easy way to get cash—say, for an unexpected expense or home project.

The primary appeal is convenience. You don’t have to apply for a separate loan or undergo a credit check, and loan payments are rolled in with your regular payment so that you have one bill each month. With the Citi Flex Loan, you can spread out payments for a term of up to 60 months. My Chase Loan, which Chase plans to launch late this year, will have a term of up to 24 months.

For both plans, the interest rate is fixed. Most credit cards have a variable rate, so taking the loan provides more predictability for a big purchase than charging it to your card. But variable card rates will fall further if the Federal Reserve continues to lower the federal funds rate; following September’s decrease of one-fourth of a percentage point, Kiplinger expects another quarter-point cut in late October.

Shop around. The issuer will likely offer you a loan rate that’s lower than your card rate (recent average card rate: 17.14%), but you may find an even better deal elsewhere. (Neither issuer was willing to provide a range of rates charged for the loans, but several Citi cardholders we spoke with said they had received offers ranging from 9.99% to 16.99%.)

If you switch to a card that offers a 0% rate for the first several months you have the account, you’ll fare better as long as you pay off the balance before the no-interest window closes. The Wells Fargo Platinum Visa and U.S. Bank Visa Platinum cards both recently charged zero interest on purchases for the first 18 months.

If you prefer a personal loan, review offers from lenders at lendingtree.com and supermoney.com. Lightstream, a division of SunTrust Bank, recently offered rates as low as 3.99% on personal loans. As you compare loans, check for origination fees and prepayment penalties.

Most lenders expect you to have a decent credit record to qualify for a loan or credit card. But if you’ve never had a credit card or taken out a loan, you don’t have much of a credit history.

It’s a conundrum that young people face as they begin their adult lives. And having no credit record (or a thin one) touches more than just your ability to borrow money. A landlord may check your credit report before offering you an apartment, and a wireless carrier may peek at your credit before offering you service or setting a price for a plan or device.

Fortunately, you can establish a credit history even without a track record. And if your credit report contains negative items, such as late payments or a bankruptcy, you can use some of the same strategies to rebuild credit.

Apply for a credit card. Using a credit card responsibly helps you get a foot in the door to good credit. To build a positive history, pay your bills by the due date and try to keep the balance to less than 20% to 30% of the card’s limit. The percentage of available credit that you use on your cards is known as your credit utilization ratio, and the lower it is, the better for your credit score. As you learn the ropes, make just a few basic purchases monthly—say, to buy groceries—to help ensure that you can afford to pay the bill in full and avoid carrying a balance from month to month, which incurs interest.

Becoming an authorized user on a parent’s credit card is a common way young people start out with credit. That’s the route Nate Reistetter, 19, took after he heard some coworkers his age at a summer job talking about building credit. A sophomore at the University of Wisconsin—Madison, he charges some course materials to his mother’s Amazon Prime Rewards Visa Signature credit card (16.24% to 24.24% annual percentage rate). “It works well because my Amazon purchases are regular and small,” says Reistetter. As long as the cardholder pays the bills on time and keeps the utilization ratio low, an authorized user should see a positive effect on his or her credit score.

Reistetter has also thought about applying for a student credit card. Our favorite one, Discover It Chrome for Students (0% for six months, then 14.99% to 23.99%), offers 2% cash back on up to $1,000 spent per quarter at gas stations and restaurants and 1% on other purchases. Plus, you get a $20 statement credit each academic year that your grade point average is at least 3.0.

Card issuers are usually more lenient in evaluating student-card applicants’ income and credit history than in evaluating the finances of applicants for standard cards. Bank of America—which issues another student card that we like, Bank of America Cash Rewards for Students Mastercard (0% for 15 months, then 15.99% to 25.99%)—looks for an independent ability to pay the bills based on income, such as from a summer or part-time job, in applicants ages 18 to 20.

If you or your parents have been customers for a while, your bank or credit union may give you a chance. You’ll have the best shot with smaller, local banks. Or open a store credit card. Retail credit cards often have less-strict eligibility requirements than standard cards from large issuers, but many store cards come with high interest rates and low limits.

Get an un-credit card. Another option is to open a secured credit card. Qualifying for a secured card is relatively easy because you make a deposit, often equal to the card’s limit; if you fail to pay the bill, the issuer can dip into the deposit. Some secured cards even offer rewards. The Discover It Secured card (24.99%), for example, offers the same cash-back structure as Discover’s Chrome for Students card. After you’ve had the card for eight months, Discover will perform monthly reviews to determine whether you’re managing credit well enough to convert to an unsecured account and receive your deposit back.

Some financial-technology companies are conjuring up cards that rely on alternative methods to evaluate creditworthiness. The Petal Visa card (14.99% to 25.99%) focuses on people new to credit and charges no fees. Plus, you get 1% cash back right away, 1.25% after six on-time payments and 1.5% after 12 on-time payments. If your credit history isn’t robust, you can link your bank account for Petal to review your cash flow. Depending on how healthy your credit and finances are, the credit limit runs up to $10,000—much higher than you can typically get with a secured card.

Consider a loan. Some community banks and credit unions offer credit-builder loans, which may be preferable if you’d rather avoid a credit card, says Beverly Harzog, credit expert for U.S. News & World Report. The lender puts the amount you borrow (typically $1,000 or less) into a deposit account, and you make payments of principal and interest on a predetermined schedule. After you pay off the loan, you get the money back, possibly with interest. Check that the lender reports your loan payments to the three major credit bureaus: Equifax, Experian and TransUnion.

If you have a student loan, making on-time payments can help beef up your credit history, too. Your mix of credit makes up 10% of your FICO credit score, so having both a loan and a credit card on your report may give your score a bit of a bump.

Leverage new alternatives. Experian Boost is a service that potentially increases your credit score by considering on-time payments of bills you owe to utility providers and phone or cable companies, which typically don’t report customer payments to the credit bureaus. At www.experian.com/boost, link the bank account you use to pay bills. Experian will scan your account for positive payment information and include what it finds in your Experian credit file. Equifax plans to soon introduce a service through which lenders may consider payment information for utility, phone and cable bills, with the applicant’s permission. (See Kiplinger Q&A: Hill Harper)

FICO has been testing an UltraFICO score with a handful of lenders and expects the score to become more widely available this fall. UltraFICO incorporates activity from your bank account, including how consistently you have cash available and whether you’ve overdrawn your account. If you can’t qualify for credit with a traditional score, a lender may ask whether you’d like to link up to 20 active personal checking or savings accounts for evaluation with UltraFICO.

Reap Some Rewards

The Apple Card (12.99% to 23.99%) is an attractive choice for newbies. Normally, you’d have trouble getting a rewards card with a score below about 670, says Ted Rossman of CreditCards.com. But, he says, “I’m hearing that a lot of people with credit scores in the 550 to 650 range are getting approved.” The card offers cash-back rewards of 3% on Apple purchases, 2% on other purchases you make with Apple Pay, and 1% at stores or websites that don’t accept Apple Pay.

Ryan Ermey: You've checked your credit report and ... there's a mistake or evidence of fraud. It may be a battle to get it fixed. So we've brought in the heavy artillery for you. Kiplinger credit maven Lisa Gerstner, who joins us for a main segment interview. On today's show, Sandy and I get you ready to budget early for holiday shopping and a new edition of Financial Fact or Fiction revolves around credit card usage and evaluating mutual funds. That's all ahead on this episode of Your Money's Worth. Stick around.

• Episode Length: 00:27:52
• Links and resources mentioned in this episode
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Ryan Ermey: Welcome to Your Money's Worth. I'm Kiplinger's associate editor Ryan Ermey, joined as always by my partner in crime, senior editor Sandy Block. Sandy, how are you?

Sandy Block: I'm good. And I am not committing any crimes today.

Ryan Ermey: Thank goodness. So we here at Kiplinger like to be plenty proactive when it comes to finances. And that's why we're talking about holiday shopping, spending and budgeting today, because we'd like you to get an ample head start-

Sandy Block: That's right.

Ryan Ermey: ... so that you don't go over your budget.

Sandy Block: Christmas is right around the corner.

Ryan Ermey: As are all the other lovely holiday traditions. We don't want to leave anyone.

Sandy Block: No, no. And the Halloween decorations are already up in the stores.

Ryan Ermey: That's true. Halloween is my favorite holiday by the way.

Sandy Block: Yeah. No pressure.

Ryan Ermey: Yeah. So when we start thinking about holiday budgeting, to me it's about being proactive and actually creating a budget. And this is worth thinking about now because we all end up doing the same thing when the holidays actually roll around, which is you wait until the last second to buy everything for everyone on your gift list. And you go, "Ah, it's like 10 bucks more than this, and it's another 50 bucks. Alright." You know, like whatever. And you end up going way over budget and you can get yourself in trouble.

Sandy Block: That's right. And what I do is I end up running around at the last minute buying presents for people who bought presents for me.

Ryan Ermey: Right. So, yeah. So, the way to go about this and the advice that we've given in the magazine before is to set a strict budget that you can't go over. And one of the ways to do this is to put whatever amount of money you allocate for the holiday season. And that can include your gifts, it can include your-

Sandy Block: Travel.

Ryan Ermey: ... travel. You want to buy-

Sandy Block: Parties.

Ryan Ermey: ... decorations, you want to but booze to bring to parties. Try to factor all of that in and come up with a number that you're comfortable with. And then to make sure that you're not going to go over, consider putting the money into something like a low-fee prepaid card. We like the AMEX Bluebird card, which is low fee. It comes with FDIC coverage, even has some handy budgeting tools. And then once that money's gone, it's gone.

Sandy Block: No more gifts.

Ryan Ermey: It's the same with, you could equally stash your budget in a dedicated no fee, no minimum checking account. But the point is the same. And one of the strategies I came up with, I wrote a holiday gift giving guide for the broke back in my intern days. When I was honestly and truly broke. One of the pieces of advice I got from someone was to create a prioritized gift list with-

Sandy Block: Mom at the top.

Ryan Ermey: ...really, yeah, exactly. Do it like line items. Yeah. Mom is at the top and gets the most money going all the way down to whoever. And if you're doing that thing where, "Oh no, my friend got me this gift, I should give them something back." Leave a little bit of room at the end there for a little bit of wiggle room. But the point of the exercise of breaking things down by line items like that is that you don't end up spending $65 on aunt Debby and then you have $10 left in your budget for mom.

Sandy Block: For mom. Yeah. Right. Good advice.

Ryan Ermey: And the other side of this is you can find some ways to boost that budget. Some easy ways that you can pump up the available funds you have for holiday spending.

Sandy Block: Right. And we actually have a slide show on our website that has all kinds of ideas. Some of them, which I discarded, because for me they were too much work. I am not going to start walking dogs or driving Uber, I just, I'm sorry people, I don't care about you that much. But there were some good ideas that require minimal effort that I took note of that I thought were really interesting. One is to look for unclaimed property. There are billions of dollars in like leftover bank accounts. Paychecks you didn't get, I found some stock dividends a few years ago, and it's very easy to search for them. One of the, we'll put them on the show notes, but the most popular website is www.missingmoney.com so go on there. You put in your name, your address, and you find out if the state's got some money you forgot about. Well, that's really easy.

Sandy Block: Another one, and this one I have also applied, used to buy gifts... to see if you've got unused rewards on your credit cards. Now I know a lot of our readers are very vigilant about using their rewards, but a lot of people just happen to have a rewards card. And what I do is periodically I go on mine and cash it all in for Amazon gift cards. And then I just have them in my file and then I use it to buy gifts. And you can buy practically anything on Amazon. So that's some extra money laying around that you might know about. You got any ideas, Ryan?

Ryan Ermey: Well, you mentioned gift cards, which is, by the way, a good idea for staying on budget, right? You're not going to go over-

Sandy Block: Right. This is 20 bucks...

Ryan Ermey: ... you may also have gift cards laying around. I think I have gift cards that I received as gifts that I haven't used for a couple years. We've recommended websites in the past that you can exchange those for, I mean, you don't want to, re-gifting is always tough and unless it's something maybe you got a Home Depot gift card that your dad would love or whatever. But otherwise you can cash in old gift cards or exchange them for other gift cards that people might like. Of the suggestions laid out by our colleague Bob Niedt in that slideshow, that's N-I-E-D-T, for those who are interested. There's a couple that stood out to me that seemed fun.

Ryan Ermey: I know that you mentioned not wanting to do too much work, or really do anything too extreme, like I don't want like anything that's just going to be like a bummer.

Sandy Block: I'm not selling my blood.

Ryan Ermey: Yeah. I don't want to sell any fluids. I don't want to sit for any polls or focus groups.

Sandy Block: Clinical trials.

Ryan Ermey: Yeah, really. Sure, what could go wrong? Show up at Christmas is like a third eye growing up. But there's a couple that I think sound fun. One is doing TaskRabbit or Fiverr, sort of small gigs for stuff that you already kind of like to do. You know, for me, I'm like a fastidious grammar person. Maybe I can pick up a couple of extra little jobs, copy, editing or doing something like that, just for a little bit of extra money. There's a very, very trendy restaurant like caddy-corner to me in my fun, hipster neighborhood in D.C. And there's people online, there's no reservation. So there's people online there starting at about 4:00 every single day.

Ryan Ermey: Now that the weather is nice, my plan is to maybe go on TaskRabbit and see if I can't get extra money to just sit online and read a book.

Sandy Block: Get online, there you go.

Ryan Ermey: And the last thing I wanted to mention, I encourage people to go back and listen to our interview with our former colleague Kathy Kristof, who runs a website called Sidehusl.com. There are a lot of side hustles out there that people might find quite enjoyable. I'm not going to go and walk people's dogs, but I know people who would do it for free just to hang out-

Sandy Block: Just because they like dogs.

Ryan Ermey: ... with dogs all day. You can get paid for that. The one that I think is pretty interesting is this idea of giving tours of the city that you live, and I've lived in D.C. for a decade now, and I'm still relatively hip. And they have these sites that you can find, Vayable is one, ToursByLocals, where local people can give tours to incoming tourists of the city.

Ryan Ermey: And, am I going to go around and tell them the history of the Jefferson Memorial? No, but I could run a pretty good dive bar tour. And it's fun, you get to meet new people, and you can charge, I mean, if you go on these sites and look around, you can charge a lot of money to bring people to the same crappy bars you're drinking at anyway. So the bottom line, if you want to find ways to pump up your budget a little bit for the holidays, go right ahead. But the bottom line is you should have a budget and stick to it. Otherwise you could really get into trouble over spending. So like I said, mom at the top of the list, make sure you know what you want to spend and you should be okay.

Ryan Ermey: After the break, Lisa Gerstner prepares you to do battle with the credit bureaus and win. Don't go anywhere.

Ryan Ermey: We're back and we're here with Kiplinger's contributing editor Lisa Gerstner, you've probably heard her on the show before. She is the master of all things credit for the magazine. Lisa, thank you for coming on.

Lisa Gerstner: Thanks for having me again.

Ryan Ermey: So you have a story in the October issue of Kiplinger's, Battle the Credit Bureaus . . . and Win, like a hardcore headline, I love that. So we're always reminding readers to check their credit reports at annualcreditreport.com and to check to see if they have any mistakes. But what the story points out is that if someone actually finds a mistake, it may be tougher to remedy than they think. Why is that?

Lisa Gerstner: The system is not necessarily designed to be consumer-friendly, and a lot of it is automated. So say you find a problem on your credit report, something is an error, and you want to go to the credit bureaus and have it fixed. You submit your dispute and you can write up a whole letter describing what the problem is. But what they're going to do typically is just distill that dispute into a two or three digit code based on the type of dispute that it is. So, it all gets down into just a couple of digits and then it's sent to the lender or whoever supplied the data in question. So, that could be a collection agency or whoever that may be.

Lisa Gerstner: So then that data furnisher reviews the case, decides whether there's actually an error here or not in their opinion. And then they send that information back to the credit bureau and the credit bureau regurgitates it back to you. That's typically how the process works. So there's really not a whole lot of room for nuance when everything is so automated. And that's difficult for people to come back or battle as we used in the title of the story. So I think that's really where a lot of the problem comes in. And it's just such a massive system that we're dealing with. The credit bureaus have information on so many people and so many disputes that they have to get through.

Lisa Gerstner: So I think that's where the root of the problem really is. There had been some reforms in recent years that are, they're supposed to help with this. So if you send supporting documents in with your dispute, like a bank account statement, for example, saying that you paid a bill, even though it's being reported that you didn't, they should be sending that onto the data furnisher. And the furnisher should be considering that. And the bureau should be conducting some of their own investigations on their end. But studies I've seen kind of surveying what's going on here suggest that all of this isn't necessarily happening or if it is, it's not really at the pace that they would want it to be. So, that's what you're up against when you're looking at disputing an error with the credit bureaus.

Sandy Block: So Lisa, when you get your credit reports, and given that it's not easy to fight them, what errors should you be on the lookout for and what's worth actually going head to head with them to try and get something fixed?

Lisa Gerstner: The biggest problems are going to be either accounts that don't belong to you, maybe a credit card that was opened in your name, but it's not yours that perhaps an identity thief is out there at work, or maybe collection accounts that show up in your name. It could be from a medical bill that a thief didn't pay, or utility bills or loans or anything like that. Anything on there that's really negative information, it can have a significant effect on your credit score. It can drop by a hundred points or more when something like this happens. So those are the ones that are really problematic and that you absolutely need to get resolved. Other things that you should keep an eye on even on legitimate accounts that you do own, make sure that the balances are correct, that any accounts that you've closed are marked as such.

Lisa Gerstner: Accounts will typically stay on a report for another 10 years after they're close, so just makes sure that it's marked that way. And then just personal information about you. So if you see an incorrect address, that could be a sign of identity theft, it may seem kind of harmless, but things like that actually can be a problem. So mixed files also, those can be really difficult for people to resolve and an incorrect address can also be a sign of that. So if someone has maybe a very similar name to you, and a similar Social Security number, sometimes the bureaus will actually get that information mixed up between the two of you. And then you've got all this incorrect information on your report.

Ryan Ermey: So you see in the story that you should dispute errors on two fronts, with the furnisher and with the bureaus, why take this sort of two pronged approach?

Lisa Gerstner: Going to the furnisher is often your best bet to actually get that information removed from your report. Because as I'd mentioned, they're ultimately the ones deciding, the credit bureau is just going to send it over to them and they're going to review your case. So if you can talk to that furnisher and convince them that something is wrong, they have to go back to the credit bureaus and correct information with all the bureaus that are reporting it. So, usually your credit report will show contact information for that furnisher. You can call them. Try to go through the system. If the first person doesn't help you, ask for a supervisor. Ask for someone in a different department, you may have to be persistent and keep trying.

Lisa Gerstner: So, That's what you want to do on that end. On the other hand, you do want to dispute with the bureaus, even if it's not necessarily very helpful, because it does preserve your legal rights.

Ryan Ermey: Paper trail.

Lisa Gerstner: So if this doesn't work out. Yeah, if they don't correct this error or the fraud that's on your account, it preserves your right to file suit against the lender or the bureaus. So you do want to do that. And I talked to a lot of attorneys for this article and all of them said, "File your dispute in writing on paper and send it over snail mail." Going online is quicker and it's easier and you may get a faster response, but then you have that paper trail if you do have to go to the legal route." So that's one bit of advice there. And I would just say be very clear and concise when you're writing this letter describing your problem because it's all automated, nobody's really going to be reading your novel about this terrible problem that you're having.

Sandy Block: So, Lisa, how should your strategy differ if you're reporting a case of fraud versus just reporting an error?

Lisa Gerstner: The law actually has special stipulations for fraud or identity theft and that works to your advantage. It often means that you're going to get a quicker, more streamlined result, but you do have to take certain steps for that. So what you want to do is go fill out an identity theft affidavit at identitytheft.gov, you go through, describe all the problem that you're having, and then you're going to have to send that to the bureaus along with proof of your identity, a description of which information on your credit report is fraudulent, and then just a statement saying that this resulted from a transaction that wasn't yours.

Lisa Gerstner: If you take all those steps and you send that in, they're supposed to remove the fraudulent information from your credit reports within four days. It's often a good idea just to contact the bureaus first, just to make sure that you're sending the information to the right place, that you're providing the type of proof of identity that they want, whether it's a driver's license or a birth certificate, whatever it may be. But in the ideal world that will go a little more smoothly for you than an error.

Ryan Ermey: So in either case, if you have been given the run around by the bureaus or by the furnishers, you say that it's time to turn to a third party. Who should people turn to in those scenarios?

Lisa Gerstner: A good step to take is try submitting your complaint to the Consumer Financial Protection Bureau. They have a whole portion of their website dedicated to complaints, and what they'll do is take your complaint, they'll send it to any bureaus that you mention, and then the bureaus are supposed to review that and send a response. And then the CFPB will get that response back to you. That may get their attention more than going kind of the standard route, which you should try first. Also, sometimes there are state agencies that can help -- your Department of Consumer Affairs, Attorney General's Office, other places you could go to.

Lisa Gerstner: Another one that I thought was kind of an interesting suggestion that I heard was writing to your Congressman or Senator. I'm not sure how effective it is. I'm not sure if they'll take notice of your letter, but if they do and they decided to contact the bureaus on your behalf, that will certainly get their attention. And then when all else fails, take legal action. You can go to a lawyer. There's a website called ConsumerAdvocates.org and they actually have attorneys who specialize in credit reporting on there, if you kind of search through their menu you can find them. And those attorneys often work on contingency. So if you take the case to court and it doesn't win, you don't pay anything, if it does win, they take a cut of your compensation.

Sandy Block: So, Lisa, I think I've mentioned this before on the podcast, whenever I'm listening to our all news radio station in the car, I hear these ads for these companies that say that they can clean up or repair your credit. Is this an option or is this something you should avoid?

Lisa Gerstner: Most of the time that's something you want to avoid. So credit repair companies often they'll promise to clean up your credit report for a fee, but sometimes they'll even combat legitimate information that should be on your report. Accounts that you paid late and things like that. And so because of that, the credit bureaus can just dismiss them if they think that that's what they're doing, that they're actually trying to fight information that should be on your report. So, that's one reason you don't want to go with those. And plus, you can do better on your own without paying a fee as long as you know the system.

Ryan Ermey: And as long as you're willing to battle-

Sandy Block: And read our story.

Lisa Gerstner: Exactly. You are armed.

Ryan Ermey: Right. Prepare for battle with Lisa's advice, which as we mentioned, you can find in the October issue of Kiplinger's on newsstands now and up on the website and surely in the show notes for this episode. In the meantime, Lisa, thank you very much for coming on. Wonderful advice as always.

Lisa Gerstner: Thanks for having me.

Ryan Ermey: Is it really worth paying attention to one, three, five and 10 year mutual fund returns, Financial Fact or Fiction is next.

Ryan Ermey: We're back, and before we go, Sandy and I wanted to play yet another game of Financial Fact or Fiction. Sandy, you're up.

Sandy Block: Okay, here's mine. Closing credit cards you don't use or aren't using will help your credit score, fact or fiction?

Ryan Ermey: I know that closing a card in general might ding your score, but I don't really know what the deal is if you're not using it.

Sandy Block: That's right. It doesn't matter if you're not. This is a little counterintuitive because you think you're trying to clean up your credit score and prove... get rid of some of these credit cards, right? Why not? Well, here's why. Because the calculation of the credit score includes something called a credit utilization ratio, and basically that is a ratio based on the amount of overall credit that you have access to and the amount of credit that you actually use.

Ryan Ermey: Right. So they don't want you coming close to that... every month.

Sandy Block: Right, they don't want you to use everything you got, right. So the lower your utilization ratio, the higher your score. So closing credit cards, while that might remove some temptation, is going to reduce your available credit. And unless you really reduce your spending by that same amount, it could hurt your score. So the advice I think I would suggest is just, if you have credit cards you're not using, don't close them, just put them away.

Ryan Ermey: Just cut them up.

Sandy Block: Yeah. If you're worried, well, because you might need them at some point.

Ryan Ermey: Fair enough.

Sandy Block: But one thing I've heard is one of these like online penny saver tips or something is if you really are tempted, like maybe in the middle of the night, you're afraid you'll use these cards to like order stuff online, put them in a block of ice and put it in the freezer. So by the time it defrost, the temptation will have past.

Ryan Ermey: A quite literal credit freeze.

Sandy Block: That's right, you freeze your credit. So don't think that canceling credit cards will help your score. It won't help it and it could hurt it.

Ryan Ermey: Alright. So mine is when assessing a mutual fund, you should consider it's one, three, five and 10-year returns.

Sandy Block: Well, I would think that's a fact, Ryan, because that's something you always see. Here's your, in the ads, they always say, "Best buy-"

Ryan Ermey: ...one, three, five-

Sandy Block: ...that's right. So why is that, why would that not be true?

Ryan Ermey: So a funds long-term performance is an important thing to consider. You always want to take a look at a mutual fund's track record. But you want a fund that can perform consistently well against its peers and against its benchmark index. So the deal with one, three, five, 10 is a fund can be an absolute dog for nine and a half of those 10 years. But then in the most recent six months, it went up 1000%, and that's going to boost all of those numbers.

Sandy Block: Right. Which would only benefit you if you've owned it in the last six months.

Ryan Ermey: Right. And you've had it for ages and it's been horrible. So instead you want to look at a long-term track record, but you also then want to look at those returns broken out by calendar year. And this is something that you can do on Morningstar.com among other places. And you want to be looking at, alright, where is it finishing as a percentage of similar funds?

Sandy Block: Its benchmark, yeah.

Ryan Ermey: Morningstar breaks these things out into categories. So, like a large growth fund or something like that, like an S&P 500 fund would be a large company US blend fund and how it's doing against its index. And there are a couple other important things to consider. Of course cost is one of the very, very most important determinants of investment outcomes. So you want to look for funds that charge inexpensive or at least below average expense ratios.

Ryan Ermey: Volatility is another thing to consider. So what we're talking about, for year to year performance, you should be aware if a fund has sort of big swings in performance and that's how it drives its long-term returns. Or if it's sort of more of a steady Eddie. One metric that you can find for a mutual fund is standard deviation. If it's higher than the index, that means that it's more volatile than that index. One more thing to consider for active funds is manage your tenure. A fund can have a 20-year track record, but that really doesn't mean much if the person who was running the show-

Sandy Block: Just quit.

Ryan Ermey: ...has retired.

Sandy Block: Yeah, that's right.

Ryan Ermey: And they always say, "Oh, you know we have this plan in place and he's worked under him for years and all that." And that doesn't mean you should dump a fund whenever a manager changes. But if you're considering a fund, it's worth kind of sitting back and assessing, you know, what the fund is going to look like under this new manager. Sometimes the strategy can change drastically.

Sandy Block: Overnight. That's right.

Ryan Ermey: And the final thing I wanted to mention is that when it comes down to it, you should consider if an index fund makes sense. We already talked about costs. Index funds keep costs extraordinarily low.

Sandy Block: Right. They're very tax efficient because they don't have a lot of turnover.

Ryan Ermey: Exactly right. You took the words out of my mouth.

Sandy Block: I'm the tax person here.

Ryan Ermey: And you get broad diversified exposure to, I mean, you can get basically huge chunks of the market, like the whole US stock market, or you can get very niche sections of the market, say a particular sector or even region, and you're going to do that in a low cost, diversified way. And most active managers in fact don't beat their benchmarks on a long-term basis. So for cheap, broadly, diversified exposure, that's worth it. But on the whole, when you see these commercials that say, you know-

Sandy Block: "Best five year record."

Ryan Ermey: ..."Best one, three, five and 10." That doesn't really mean a lot. So it's worth drilling down, especially if you're considering an actively managed fund, one that's trying to beat an index on a regular basis. It's worth looking at that performance parsed out to see how consistent the performance has been over time. And that'll just about wrap it up for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show visit kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at podcasts@kiplinger.com and if you like the show, please remember to rate, review and subscribe to Your Money's Worth wherever you get your podcasts. Thanks for listening.

Links and resources mentioned in this episode

• 17 Ways to Earn Extra Cash for the Holidays
• 38 Ways to Earn Extra Cash
• A Gift-Giving Guide for the Truly Broke
• Keep Holiday Spending Under Control
• Find Missing Money
• Battle the Credit Bureaus and Win
• Should You Cancel Your Credit Card?
• My 9 Rules for Picking Mutual Funds

Have you ever found yourself fuming at the credit bureaus? You have plenty of company. Among companies in the Consumer Financial Protection Bureau’s database, the three major credit-reporting bureaus—Equifax, Experian and Trans­Union—have logged the most complaints for four years running, according to a report from the U.S. Public Interest Research Group.

Most of the complaints involve hassles remedying inaccurate information on credit reports. But some are from consumers who find themselves caught in a tangle of red tape or facing an impenetrable wall of indifference. Each year, Margaret Finelt, of Richmond, Texas, gets her free credit reports at AnnualCreditReport.com.

At the site, you are directed to each of the three bureaus. But for the past couple of years, although she’s had no problem claiming her reports from TransUnion and Experian, she’s been unable to obtain her Equifax report.

On the phone, Equifax representatives have given her a number of pos­sible reasons: that her credit report is frozen (a freeze prevents lenders from seeing the report in response to a request for new credit in her name), that she failed to correctly answer a security question, or that AnnualCreditReport.com was having a technical issue. Margaret’s husband, Daniel, has since frozen his credit reports—and now he can’t obtain his Equifax report online. By law, a freeze doesn’t prevent you from getting your free annual credit report. In a statement to Kiplinger’s, Equifax confirmed that a credit report is available via the “online, phone or mail channel even if you have a security freeze.” The Finelts finally managed to get their Equifax reports by calling customer service and verbally answering security questions.

It’s hard to say why the Finelts can’t get their Equifax reports online, but their experience illustrates the everyday difficulties that consumers have with the credit bureaus: receiving scattered or faulty information from agents and encountering roadblocks in processes they expect to be simple. “With Equifax, I dread trying to get anything,” says Margaret.

In a battle of you versus the credit bureaus, the bureaus have most of the power—and Congress has been reluctant to regulate them. It took Equifax’s massive data breach two years ago to get the attention of lawmakers. That led to the legislation that allows you to freeze your reports for free but provides few other new protections involving the credit bureaus.

Over the past decade, regulators and the attorneys general of several states have managed to enact a few reforms in an effort to improve credit-report accuracy and secure better treatment for consumers. For example, when a bureau confirms that a consumer’s credit-report data is mixed with that of another person, it must inform the other bureaus. Your credit reports may no longer include debt that did not arise from a contract or agreement (such as a parking ticket or library fine) or medical debts that are less than 180 days old. Plus, the bureaus must remove medical debts from credit reports after they’ve been paid by an insurer. The CFPB has directed the bureaus to conduct their own reviews of consumer disputes and documentation—rather than simply passing the buck to the data provider and “parroting” its response back to the consumer—and data providers should have systems capable of receiving consumer-dispute information.

But problems persist, according to a National Consumer Law Center report, “and we fear the needle on the speedometer for reform is stuck on slow.” Plus, some of the permitted practices do consumers no favors. For example, the bureaus convert disputes into two- or three-digit codes to summarize complaints for data furnishers. The process mostly involves “computers talking to computers,” says Gerri Detweiler, credit expert and education director for Nav.com, a website offering credit scores and data for businesses. That doesn’t allow for much nuance in what may be a complex dispute.

Although you can go to court when a dispute fails and may win compen­sation and a cleaned-up credit record, such cases aren’t much of a threat to the bureaus. “Rather than changing their business practices to be fairer to consumers, they pay go-away money in very small lawsuits. They can afford it as a cost of doing business,” says Ed Mierzwinski, consumer advocate for U.S. PIRG. Even Equifax’s recent settlement of up to $700 million for its 2017 data breach is “a mere parking ticket,” he says. (For more on the settlement, see The Disappointing Equifax Settlement.) “More needs to be done to rein in the bureaus.”

Clear errors from your credit report

You may have discovered that something was amiss when you were un­expectedly rejected for credit or received notice of a change from a credit-monitoring service. Rather than wait for a surprise, make it a habit to regularly visit annualcreditreport.com, where you can collect one free report from each bureau every 12 months. Review your reports to ensure that all of the accounts are yours. Check that any accounts you’ve closed are marked as such (accounts in good standing continue to appear on your reports for about 10 years after they’re shut down) and that details such as balances, credit limits and dates that accounts were opened are correct. Make sure your personal information is accurate, too. An incorrect address, for example, could be a sign of a mixed file or identity theft.

If your credit report shows information that is inaccurate or incomplete, you have the right to dispute it and have it corrected or deleted. Fixing an error is especially important if it could prevent you from getting credit (or result in a higher interest rate on a loan), renting a home or getting a job. A new collection account that mistakenly appears in your name, for example, will likely cause your credit score to drop significantly.

Errors crop up for a variety of reasons. A lender or other furnisher of information may tell the credit bureaus that you’ve missed payments when you haven’t or provide an incorrect balance for your account. Or a bureau may continue to report a delinquency after it should have been removed from your credit file (by law, negative information must disappear after seven years—except for bankruptcies, which may remain for 10 years).

Another possible problem—one that can be vexing to resolve—is that your credit file is mixed with that of someone else who has the same name or other similarities to your identifying information. It’s especially likely to happen if you have a common first and last name or if you have a family member with the same name. Plus, when matching information from furnishers to consumers’ credit reports, the credit bureaus may consider only seven of a Social Security number’s nine digits.

Make your case. If you spot an error, attack it from both sides: Contact the furnisher that provided the data to the credit bureaus as well as each bureau reporting the error. The furnisher’s contact information may appear on your credit report. Be persistent—you may have to ask for a supervisor or talk to representatives from a few different departments before you find someone who can help. If the furnisher agrees to fix a mistake, confirm that it will update all the credit bureaus (which it must do) and ask for written acknowledgment.

Because the credit bureaus still often shift a complaint to the data furnisher and regurgitate its response, convincing the furnisher that it made a mistake may be your best bet to get an error off of your report. A couple of years ago, Mike Gnitecki of Longview, Texas, noticed that his credit score, which typically tops an excellent 800, had dropped. After checking his credit reports, he found that payment on a line of credit was being reported as 30 days overdue. A bank representative told him that its records showed no late payments, so he filed a dispute online with each credit bureau.

A month passed with no word from the bureaus, says Gnitecki. He then showed his credit report to bank representatives, who concluded that there had been a glitch. The bank fixed it, and the delinquency stopped showing up on his reports. But the process left him less than impressed with the credit bureaus. “It was a frustrating experience. They make it sound like the process is easy. It’s not,” says Gnitecki. “You get the impression that nobody cares.”

Still, it’s wise to file a dispute with the credit bureaus even as you communicate with the furnisher. That preserves your right to make a legal claim against the data furnisher or bureau if the error isn’t corrected. And the bureaus must investigate a dispute, generally within 30 days, unless they consider it frivolous. A dispute may be deemed frivolous if it comes from a credit-repair company or if it’s a repeat dispute, says Chi Chi Wu, staff attorney for the NCLC.

Submitting a dispute online is usually the quickest method, but legal experts recommend sending it via certified mail, return receipt requested, to leave a paper trail. You can find more information on how to file a dispute for each bureau, including mailing addresses and online dispute portals, at equifax.com/disputes, experian.com/disputes and transunion.com/disputes.

Keep the description of your dispute clear and concise. Issues involving a mixed file, fraud or identity theft are prioritized, so be sure to cite the type of problem you have. Describe the resolution you expect—say, the removal of a credit account that isn’t yours from your credit report—and include details about the account in question, such as the account number and the name of the lender or other furnisher. Put in your personal information, including name, Social Security number, mailing address and birth date.

Include any supporting documents that may back up your case. Sending a copy of your credit report with the area in question marked may help. If a creditor is falsely reporting that you didn’t pay a bill, try to pull up a bank statement showing that you did. Keep copies of everything you send to the bureaus and furnishers. If you talk to representatives on the phone, note the names of people who spoke with you and the date, time and content of your conversations.

Round two. After the bureaus complete their investigations, they should send you written results, plus a free copy of your credit report if something has changed. If your dispute succeeds, give yourself a pat on the back—but stay vigilant in case the error creeps back onto your reports. Legally, that’s prohibited unless the furnisher certifies the item’s accuracy to the bureau, says Wu.

If the dispute fails, you have a few options. You can contest the error again, but you likely won’t get anywhere unless you have new information to bring to the table. You may write a 100-word statement to be included in your credit file that tells your side of the story, but it probably won’t be effective. Many lenders view credit reports in a format that doesn’t show the statement, and credit scores don’t consider it, says credit expert John Ulzheimer. Or you can choose to live with the error. That may be acceptable to you if it isn’t causing real harm to your creditworthiness (say, a misspelling of your name). If none of those options are suitable, turn to the government or an attorney for help.

Fight fraud

If your credit reports contain inac­curacies because an identity thief is at work, the bureaus must block the fraudulent items from appearing as long as you follow certain procedures. Because the Fair Credit Reporting Act contains these special stipulations for fraud, you may see quicker or more streamlined relief than you would when disputing an error. Indicators of identity theft include a hard inquiry from a lender or other business (say, a wireless carrier) that you haven’t dealt with recently or a new credit card, loan or collection account that you don’t recognize.

As when disputing an error, you should contact both the entity reporting the fraudulent data as well as the credit bureaus. With the bureaus, start with an online chat or a phone call to clarify what documentation each wants you to send and where it should go, suggests Eva Velasquez, president and CEO of the Identity Theft Resource Center. Fill out an Identity Theft Affidavit at the Federal Trade Commission’s identitytheft.gov. If you supply it to the bureaus—along with proof of identity, a description of which information on your credit report is fraudulent and a statement that the information resulted from transactions that weren’t yours—the bureaus must block the fraudulent information from your credit reports within four days of receiving your request.

Usually, the process works as it should; if it doesn’t, the reason may be that the victim is dealing with a complex case, says Velasquez. If you’re having trouble getting fraudulent information removed from your credit reports—or otherwise need assistance cleaning up after identity theft—call the Identity Theft Resource Center’s free hotline at 888-400-5530. Agents can guide you through the steps to take and language to use in contending with credit bureaus or other businesses based on the details of your case. If you subscribe to an identity-protection service, its representatives may help you. Check whether your bank, credit card issuer, insurance company or employer offers free or discounted assistance for identity-theft victims, too.

Claim your credit reports

People are commonly barred from acquiring their credit reports online because they fail the authentication quiz, which poses questions regarding their personal information and accounts. Passing isn’t as easy as it may sound; if you don’t know the exact amount of your mortgage payment or the year you opened a credit card, for example, it’s smart to look it up. Plus, you may be given only a few minutes to complete the questionnaire. Rod Griffin, director of public education for Experian, says he once missed an authentication question when his mortgage had been resold and he couldn’t remember the current lender. “We’re trying to achieve a balance. We don’t want the questions to be too easy, so that anybody could get through, but we try not to make them too hard, either,” says Griffin.

Other possibilities: The bureau can’t match the information you provide with what it has on file, you have an open dispute with the bureau or you have no credit record. If identity verification is the problem, you may be asked to mail in proof of ID. That’s what Equifax requests when Margaret Finelt attempts to get her report online, but she’s reluctant to send sensitive information through the mail.

If you do mail the bureaus copies of your Social Security card, driver’s license, birth certificate or other proof of identity, don’t leave it in your mailbox, where a thief could easily grab it. Take the envelope to the post office and send it via certified mail.

Your right to a free report

It pays to know when you’re entitled to a free credit report besides those available yearly at AnnualCreditReport.com. After Daniel Finelt of Richmond, Texas, experienced identity theft, an Equifax agent told his wife, Margaret, that he couldn’t get a free report because he had claimed his annual report a month earlier. But because Daniel had placed on his reports an initial fraud alert—which signals to lenders that they should verify a consumer’s identity before granting credit—the law allows him an extra free report. You also get a free report if your file contains inaccurate information because of fraud, if an adverse action has been taken against you because of information in the report, if you’re unemployed and expect to apply for employment in the next 60 days, or if you receive public assistance. For seven years starting in 2020, Equifax will provide all U.S. consumers six free additional copies of their credit report per year, too.

Take it to the next level

If the bureaus won’t rectify your credit reports despite your due diligence, bring in a third party.

Contact consumer protection agencies. Try submitting a complaint to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint. The CFPB will forward your complaint to any bureaus mentioned and let you know their responses. Your state’s department of consumer affairs or attorney general’s office are other avenues for lodging a complaint, says Dana Marineau, vice president and financial advocate for Credit Karma.

Write to Congress. Another idea: Write a letter to your U.S. senators and representative. “If a credit bureau gets a complaint from a senator about her constituent, it will bump the complaint higher in the system,” says Ed Mierzwinski, consumer advocate for the U.S. Public Interest Research Group.

Take legal action. When you’ve exhausted your other options, taking legal action is the final step. “People who jump through the hoops and do everything right but still can’t get relief are the ones who have cases that should be brought in court,” says Justin Baxter, a consumer protection attorney in Portland, Ore. If you’ve kept solid records of your interactions with the bureaus and other parties involved, that will improve your case. At consumeradvocates.org, search for an attorney in your area who specializes in credit reporting. Many such attorneys work on contingency, meaning that if your case wins compensation, the lawyers take a cut of it; otherwise, you don’t pay a fee.

Skip the credit-repair companies. These companies promise to clean up your credit reports for a fee. Some of these companies barrage the credit bureaus with disputes of legitimate credit-report blemishes—say, collection accounts that their clients truly owe. The bureaus may rightly reject such disputes as frivolous. Plus, armed with knowledge of the system, you can do a better job disputing real errors on your own—free.

The $700 million Equifax settlement is a landmark moment for consumer data privacy, but if you’re counting on a payoff, you’ll probably be disappointed. While we won’t know how much victims will be paid until after the settlement’s application deadline—January 2020—early signs haven’t been promising.

There is some good news: If you’ve spent time or money since September 2017 dealing with the breach, you have a few options. You can request reimbursement for up to 20 hours spent on reclaiming your identity, at a rate of up to $25 per hour. For other expenses—accounting fees, unauthorized account withdrawals and the like—customers can ask for up to $20,000 in restitution. You won’t need to prove that Equifax is to blame for any identity fraud you’ve dealt with as long as it occurred after the breach and your data was involved. (To apply for reimbursement, go to equifaxbreachsettlement.com.)

Caveats. Before you file for reimbursement, consider that, first, consumers will generally be expected to document their damages and time spent dealing with the problem—and the more money you ask for, the more documentation you’ll be asked to provide. Up until now, that’s been unprecedented for data breach settlements, says Charity Lacey, of the Identity Theft Resource Center. “If that’s the trend, are we expecting customers to document everything they do after they’re affected by a breach? Every breach?” she asks.

The other caveat concerns the amount of funds available to consumers and how that money will be allocated. Although a total of about $400 million has been set aside for consumer restitution, the actual amounts available for different settlement options—such as hour-by-hour re­imbursement, free credit monitoring services, and credit monitoring re­imbursement—varies by option.

At least one pool has already been stretched painfully thin by the volume of applicants. One week after the settlement was announced in late July, the Federal Trade Commission told consumers they’d be “disappointed” if they expected the full $125 reimbursement payout available to those who have already signed up for credit monitoring elsewhere.

Only $31 million was set aside for the payment pool, which would pay only 248,000 people if everyone received the full $125. Because the reimbursement payments will be paid equally to everyone in the pool, the actual payment will likely be a fraction of the advertised amount. More than 4.5 million people visited the official settlement website in the week after the deal was announced, the FTC said.

If you believe you’re owed more than $20,000—or you’re concerned that your payoff will be diluted by the number of claimants—you can opt out of the suit by November 2019 and retain your right to pursue separate legal action. If you don’t opt out and you apply for any kind of restitution—or you don’t take any action—you’ll be unable to sue the company for any future damages from the 2017 breach.

Question: Years ago, my parents made me an authorized user on one of their credit cards. I have my own cards now, and they are removing me from their account. Will this affect my credit score?

Answer: It can, but maybe not much if you’re smartly managing your own cards. “You might see a bit of a dip in your score because there’s been a significant change. But if you’ve established a strong credit history otherwise, that score will rebound,” says Rod Griffin, director of public education for credit bureau Experian. If your parents’ card has a high balance relative to its limit or a record of late payments, then being removed as an authorized user could even give your credit score a lift.

One important consideration: The credit line on your parents’ card should no longer factor into your utilization ratio, which is the amount you owe on your cards as a percentage of available credit. FICO includes utilization in its “amounts owed” category, and it makes up 30% of your credit score. The lower the utilization ratio, the better for your score. For example, if your credit limits total $25,000 while you’re an authorized user, your parents’ card has a $500 balance and your own cards have $4,500 in total balances, your overall utilization ratio would be 20%. But if your available credit falls to $10,000 after you’re dropped from your parent’s account, your utilization ratio rises to 45%.

Utilization is calculated for individual cards as well as in the aggregate for all your accounts. Aim to use no more than 20% to 30% of your limit on each card to maintain a healthy score. Those with excellent FICO scores of 800 or higher use an average 7% of their available credit, according to FICO.

After an authorized user is removed from a credit card, the account usually disappears from the user’s credit report, says credit expert John Ulzheimer, formerly of FICO and credit bureau Equifax. If that’s the case, the age of your parents’ account will no longer be a factor in your credit score. Length of credit history counts for 15% of a FICO score, so if your other credit accounts are newer than your parents’ account, your score may drop a bit.

It’s possible that your parents’ card account will remain on your credit report but no longer be updated by the issuer. In that case, the account’s age will still be considered in your credit score (but utilization won’t). If you want to see whether an account still shows up on your report, go to www.annualcreditreport.com, where you can get a free report from each of the major bureaus—Equifax, Experian and TransUnion—every 12 months.

Ryan Ermey: Just when you were starting to figure out the details on the Equifax settlement, the FTC clarifies, then another breach hits at Capital One. Luckily, our intrepid credit writer Lisa Gerstner is on top of both stories and is here to explain everything to you and us in our main segment.

• Episode Length: 00:29:44
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Ryan Ermey: On today's show, Sandy and I give you tips for profiting from and shopping at yard sales, and a new edition of Deal Or No Deal focuses on scoring bargains at banks and brokerages. That's all ahead on this episode of Your Money's Worth. Stick around.

Ryan Ermey: Welcome to Your Money's Worth. I'm Kiplinger's associate editor Ryan Ermey, joined, as always, by my partner-in-crime Sandy Block. Sandy, how was your weekend?

Sandy Block: It was good, Ryan. Not as good as yours.

Ryan Ermey: Yes. As the listeners can probably hear, I am fresh from a bachelor weekend in San Diego, which is why my voice might sound a little bit ragged. And I apologize for that. But we have an excellent show for you today.

Ryan Ermey: You know, Sandy, you know what being out in that lovely California sunshine made me think about?

Sandy Block: I can't imagine.

Ryan Ermey: I wish a better segue than what I'm about to do. But summer's a good time, and really I would say high time for yard sales.

Sandy Block: Yes.

Ryan Ermey: And this is the kind of summery hard-hitting content that we like here at Kiplinger's, but always personal finance-related. So we have some tips for your garage sale. And I have some from an unpublished story from my vaults from years ago. You have crowdsourced some. So let's get into it.

Ryan Ermey: My first piece of advice is that you should plan ahead. You don't just decide to go out this weekend and do it. You have to give yourself some time to go through all your stuff. Go room by room, drawer by drawer, put things in boxes. And one of the pieces of advice I got in terms of planning is that Friday actually tends to be a good day to hold a yard sale.

Sandy Block: Better than Saturday?

Ryan Ermey: Well, because Saturday is the day that everyone is doing.

Sandy Block: Ah, competition, yeah, yeah.

Ryan Ermey: You want to be the only game in town. So if you set up bright and early on a Friday, advertise robustly, which we're going to talk about in a minute, you should be able to attract substantial traffic.

Sandy Block: Good deal, Ryan. All right, Fridays.

Ryan Ermey: So, and talking about advertising, you want to advertise online. Craigslist is probably the best source to do it.

Sandy Block: Because people are already looking for used stuff on Craigslist, right?

Ryan Ermey: And Craigslist has a section for-

Sandy Block: Oh, for yard sales, okay.

Ryan Ermey: ... garage and yard sales. So what you're going to want to do is list all the items that you plan to sell beforehand so people can take a look and see if there's any kind of good stuff they want. Although, the one piece of advice here is that you probably shouldn't sell an item before the sale because people may show up wondering where it is.

Sandy Block: Bait and switch.

Ryan Ermey: The other way to advertise is to put up signs the analog way. That's still popular. But no need to get too detailed on the signs, just a big neon arrow that says "sale," because that's all people are going to read anyway. Sale, point them in the direction of your place, and that's pretty much all the advertising you're going to need.

Sandy Block: And that's free.

Ryan Ermey: Now, you want to know what sells before you list your stuff. And I'm going to rattle these off very quickly: tools, small appliances, china, glassware, pet items, children's items-

Sandy Block: Children's clothes, yep.

Ryan Ermey: ... clothes and toys, and sporting goods. For anything electronic, have a power strip or fresh batteries on hand to show the buyers that it works.

Sandy Block: Yes.

Ryan Ermey: Unpopular items, things that you shouldn't put out there: adult clothing, which might be out of style, plus no one can try it on, outdated tech, no one wants your VHS tapes, books, those are probably taken to the library, and big ticket items because you're not going to get a good price. People are going to yard sales looking for a deal. No one is going to give you a good price for your ex-husband's Rolex.

Sandy Block: But you might feel pretty good about selling it cheap.

Ryan Ermey: That's true. What did you learn from your crowdsourcing?

Sandy Block: Okay, this was really interesting. I actually crowdsourced on my Facebook page, and I got some tips for people who give yard sales and also for shoppers at yard sales-

Ryan Ermey: Oh, I like this.

Sandy Block: ... because I used to watch "Antiques Roadshow" all the time, and invariably there'd be some guy or some gal who had something that they bought for $5 at a yard sale that was worth like $10,000.

Ryan Ermey: A fortune, yes, of course.

Sandy Block: And I want to be that person. So obviously people look at yard sales for deals. Usually they find china and kids' clothes and books. But some of the tips that I got I thought were really interesting for getting a yard sale, one is to combine with your neighbors, because then you ... people love neighborhood yard sales. There's more stuff. Then you can combine your advertising. So combine your yard sale.

Sandy Block: One friend, actually, this sort of contradicts something you said, he said that when they held a yard sale, they did have one big ticket item, a washer dryer.

Ryan Ermey: Ooh.

Sandy Block: And because people were interested in that, it drew a lot of people. And even though it sold early, people who came looking for it bought other stuff. So it was a little bait and switch, but not really because they were honest. It just sold soon.

Ryan Ermey: Sure.

Sandy Block: Brought people in. So that was good.

Sandy Block: Our investing editor Anne Smith had a great suggestion. If you have kids, have them set up tables with lemonade and baked goods.

Ryan Ermey: I like that, put them to work.

Sandy Block: Yeah, put them to work, they could make some money. People love that stuff. So I thought that was a really good tip.

Sandy Block: Now, for people who go to yard sales, bring small bills and change.

Ryan Ermey: Yes.

Sandy Block: Because you know that your neighbor's not going to accept your credit card and probably isn't going to be too happy if you pull out a 20, so small bills.

Sandy Block: This was one of my relatives, she said, "Stay hydrated," so she must go to a lot of yard sales.

Ryan Ermey: She's a marathoner.

Sandy Block: And this applies to givers, and shoppers, and sellers. Plan to arrive early. And if you're giving a yard sale, assume people will arrive early. I heard from people who said that people showed up at their house the night before.

Ryan Ermey: That's...

Sandy Block: People take yard sales really seriously. So if you say that the yard sale's starting at 8:00, do expect people to show up at 7:30.

Ryan Ermey: Now, did any of your people give you advice as to whether you should put labels in terms of prices on your items? Because I remember when I reported this story, people seemed to be at odds over whether that's a good philosophy or not.

Sandy Block: That came up in my crowdsourcing too. It was interesting, I got two different views on this. One is yes, price things, because that gives you a bargaining place. And people might offer less, but that basically, you know ... And I think that might apply if you are actually selling things that you think have some value. If the purpose of your yard sale is just to get rid of stuff and maybe make a little bit of money, then I think the argument is no price, just best offer.

Ryan Ermey: So one of the arguments for not doing it that one of my bygone sources made was that she had some old blanket, she would've gotten rid of it for two bucks, but some lady came up and said, "I want the blanket." She said, "Name your price." And she said, "I don't know, 20 bucks?" And she sold it.

Ryan Ermey: But the flip side of that is you don't have a price on something, someone knows that you have something valuable, like say your son's baseball card collection or whatever-

Sandy Block: Right, the Roadshow watchers like me, yeah.

Ryan Ermey: ... you get rid of it for a song, and then whoever's thing that is, is upset, especially if you have all these people kind of coming and going, and different people were helping you out and working it, like we were talking about having the whole neighborhood do it. So that makes it good, organized, and it really gives, to me at least, a sense of stress relief that you don't have to completely make up prices on the fly for everything if people are mobbing you.

Sandy Block: Right. And thanks to online and Ebay, it's pretty easy to get an idea of what things are worth.

Ryan Ermey: Right.

Sandy Block: So I would do a little research, particularly if you have something like baseball cards.

Sandy Block: The final thing I want to mention, Ryan, is several people said this, and I think it's really important, is get help.

Ryan Ermey: Yes.

Sandy Block: Because you're going to have strangers coming to your house. So don't do this by yourself. You really need to have at least one or two other people keeping an eye on the items, keeping an eye on the money.

Sandy Block: One of my relatives said, "If you have an estate sale, you should have somebody in every room of your house," because people have been known-

Ryan Ermey: Sticky fingers.

Sandy Block: ... to go estate sales and walk out with the good china or something like that. So don't do this alone. You do have strangers showing up. You don't know what their intents are. So get help.

Ryan Ermey: Right. And the other side of that advice, you want people watching your stuff to make sure no one walks out with it. You want to keep the cash on your person. Don't have it in a box somewhere on a table that you might walk away from. You want to have a fanny pack or a carpenter's apron or something that you can put cash in. If it gets to be an uncomfortable amount of cash, go inside and put it in your house. And, obviously, like you said, don't accept $100 bills, don't accept checks.

Sandy Block: No checks.

Ryan Ermey: So there you go, advice for shoppers and sellers. Either clean your stuff out or help clean someone else's house out and get new stuff. And protect yourself, make sure that no one steals your beloved stuff.

Ryan Ermey: Bad News, folks, you may not be getting that $125 Equifax settlement. Lisa Gerstner breaks down the details next.

Ryan Ermey: We're back, and we're here with Kiplinger's contributing editor, Lisa Gerstner. And the timing of this interview is serendipitous, or unlucky depending on who you're talking to, because we were planning on talking about this Equifax settlements, and in the interim there's been another breach at Capital One. So Lisa, why are these breaches such a big deal?

Lisa Gerstner: I think it's a couple of things. One is the scale, particularly this Capital One breach that just came out, and then the Equifax breach where they reached a settlement recently. You're talking about a hundred million US individuals with Capital One, that's coming up on a third of the US population. And with Equifax, you're talking about over 147 million people, which is almost half the US population. So there's a good chance you were affected by one or both of these.

Lisa Gerstner: And then, just the type of information that was stolen, there's a lot of different ways that criminals can use it. So with the Capital One breach, I guess, luckily, most of it did not involve Social Security numbers. There were 140,000 people whose Social Security numbers were taken, and 80,000 people who had bank account numbers stolen.

Lisa Gerstner: But the vast majority of it involved names, dates of birth, email addresses, phone numbers, that kind of thing. And while that's not quite as damaging as a Social Security number, it really sets up seeds to do phishing attacks. So they can do these very targeted attacks where they actually use your name and your information, and they might say, "Oh, we see you have this account. Can you confirm that you're the customer by giving us your Social Security number?" There are a lot of ways they can use that to try to get more information out of you possibly. So that's the concern with the Capital One breach. I think that's one of the big things they could do with that.

Lisa Gerstner: And now, with the Equifax breach, it did involve Social Security numbers by and large. And that's a piece of information that criminals can do a lot of harm with. They can open credit lines in your name, get medical care, rent an apartment, file a tax return. There's a lot of really difficult things to deal with that they could do with that. So with the Equifax breach, that's the big concern, and especially because that information can sit around for a long time. Your Social Security number and your birth date generally don't change, so-

Ryan Ermey: Generally speaking...

Lisa Gerstner: ...information about you.

Sandy Block: So Lisa, I already went on the website and found out that I am not affected, and we'll post the link where you can do that. But millions of people were. And I think the big question going on right now, the big question we hear all the time is: What are the details of the settlement?

Lisa Gerstner: There's a few different components. So the first one is that you can choose between two things. You can get 10 years of credit monitoring. So this is where a service will scan your credit reports and look for changes like new accounts that could signal identity theft, or you can choose a cash payment.

Lisa Gerstner: So with the credit monitoring, you're going to get four years of three bureau monitoring, which is good, that covers all three major credit agencies, and you do want to find out what's going on in every one of those reports. So that's actually a pretty good value. I don't know of any other service that offers free monitoring of all three bureaus at once. After that, you get six years of just your Equifax report monitored. So that's one option you have.

Lisa Gerstner: The second one is just to get a cash payment, if you already have credit monitoring, is how they're wording that. So you're supposed to see that as an alternative. And it's been quite confusing and a little bit misleading because at first they were saying, "You'll get $125 if you choose this cash payment." But now it has come out, oh, well, there's actually this limited pool of money that they have for these cash payments, it's $31 million. And so many people have already made a claim that the FTC says, "Actually there's no way you're going to get $125." So-

Ryan Ermey: Yeah, people like free money too much.

Lisa Gerstner: Yeah. People want that money. And many, many people have claimed it. So now their thing, "Oh, you probably want to get that credit monitoring because you're going to be disappointed with the amount you get." The FTC is actually saying this already. Luckily, if you've already made your claim, you do have the option to go back and change it. They say they're going to be emailing people who claimed the cash and giving them the option to take the credit monitoring instead.

Lisa Gerstner: So that's one component of it. The second one is you can get cash reimbursement for out-of-pocket expenses that you incurred related to this breach. So that could be fees you paid to freeze your credit reports because at the time the breach came out, people still had to pay fees to do that, fees for credit monitoring, things like that. They say you can even get reimbursed for fraud or identity theft that you experienced. To me, that's a little bit more of a fuzzy area. It's very hard to say, "Oh, this credit card was opened in my name, and it was tied to the Equifax breach." It's hard to say that. It's hard to say how lenient they might be on those claims. So that's just something to keep in mind if you're going to try to claim that.

Lisa Gerstner: And then you can also get up to $25 per hour spent just cleaning up or dealing with the breach in the aftermath. So if you spent time freezing your credit reports or you spent time on the phone with the credit agencies, that's something that you can claim. If you're going to claim less than 10 hours, you actually don't need to even provide any backup for that. You can just kind of describe what it is. Again, they also are saying now that there is a $31 million pot for that. So if people claim more than that in time, you won't get your full fees back on that. So that's something to keep in mind again is, depending on how many claims they get, you may not get everything back that you're asking for.

Lisa Gerstner: And then a couple other things, you get free identity restoration if you are an identity theft victim that lasts for seven years. And everyone in the country, regardless of whether they're a victim of the Equifax breach, get six extra Equifax credit reports free per year. So this is besides the three free ones you get from each bureau at annualcreditreport.com. You can get extra reports from Equifax.

Lisa Gerstner: So those are just some of the main components of the settlement that you should be keeping in mind.

Ryan Ermey: So whether I'm just going for the 125 or if I'm looking for restitution in the sort of bigger amounts that you talked about, what kind of documentation should I be collecting? What do I likely need to provide? And when do I need to provide it by?

Lisa Gerstner: Yeah, so documentation is largely going to apply to those out-of-pocket expenses I was talking about. So for that, you may want to try to dig up old credit card or bank statements to see if you can find where you paid fees, maybe for freezes of credit monitoring.

Lisa Gerstner: I'm actually trying to do that myself, and it's kind of a pain because this news came out almost two years ago at this point. My credit card website doesn't even have those statements available, I have to ask for them. So I asked for them two days ago and now I'm waiting for these statements to come up so I can see, oh, what fees did I pay? Are they on this credit card statement? You have to decide, is it worth the work-

Ryan Ermey: It's like doing a FOIA request.

Lisa Gerstner: ... to do this. And it might be a few bucks a pop if you had to freeze all three of your reports and you spent a few bucks on each one, and then you had to unfreeze them later, and freeze them again. It can add up. So it might be worth doing that. So anyway, bank and credit card statements might help you prove that, any receipts that you have or emails confirming that you bought some service, those are the kind of things I'd be looking for.

Lisa Gerstner: So for these claims, you have until January 22nd of 2020, next year, for any current claims from the breach until now. And then after that, there is an extended deadline. So if something happens next year and the following years, you have until January of 2024 to make those claims. So at least currently you still have a few months if you're kind of taking your time like I am trying to get these old statements and figure out what this is. So that's how you do that.

Lisa Gerstner: Like I said, for the time claims, if it's less than 10 hours, you actually don't need to provide documentation. If it's going to be more than 10 hours, then you do need to find documents, maybe phone records and things like that, to show. And that could be difficult too if this happened two years ago, you know, what kind of records do you have on that?

Sandy Block: So Lisa, even if you're not an Equifax victim, the likelihood that you eventually will be affected by a breach seems pretty high. So should everybody sign up for credit monitoring?

Lisa Gerstner: I think so. Just like you said, Sandy, even if it's not specifically the Equifax breach affecting you, I think we all have to assume our personal information is out there, and we need to be careful. So I think credit monitoring is a good idea. If you can't get the Equifax monitoring from the settlement, there are other options. Credit Karma will monitor your credit for free with a couple of different agencies, and then Experian has one through through freecreditscore.com too, so you can try to cover it that way. Just helps you keep an eye on those reports.

Lisa Gerstner: One thing to keep in mind is that credit monitoring doesn't prevent identity theft. It just shows you if it may have happened, new accounts popping up on your report. So if you're trying to prevent new credit lines from being opened, the best thing you can really do is freeze your credit reports. So that completely blocks lenders from viewing them, and then responds to your request for new credit. So if an identity thief is out there, has your information, and tries to open a credit line in your name, it's unlikely they're going to be able to do that because most lenders aren't going to give out credit without being able to peek at your credit report.

Sandy Block: And you can do that for free, right?

Lisa Gerstner: That's right. So there's a federal law that went into effect that now it's free to both place and lift a freeze on your credit report. So, unlike a couple years ago, you don't have to worry about those fees now.

Ryan Ermey: Well, there you have it, folks. Go get your free credit monitoring if you can. Lisa, do you have that website off the top of your head? It did freak me out because it was a .com, and it was like, "Oh, you got your Social Security number stolen. Here, give us your Social Security number and we'll let you know if you were affected." It did kind of freak me out, but it's a legit site, right?

Lisa Gerstner: It is. And that's very understandable. And it's good to use that caution. So it's equifaxbreachsettlement.com, type it in exactly like that. There's a possibility that there will be imposter sites that are maybe a letter off trying to trick people into giving them their personal information.

Lisa Gerstner: So yes, go directly to that site, and that's where you'll find information that you need on making a claim... to see if you're even eligible for the claim in the first place.

Ryan Ermey: And while you're on the internet, be sure to swing by Kiplinger.com. Lisa has a piece that just came out recently on the Equifax breach. I think by the time this airs, she will have another piece on the Capital One breach. She is our master of all things credit.

Ryan Ermey: And Lisa, thank you so much for coming on.

Lisa Gerstner: Thanks for having me.

Ryan Ermey: Coming up, find out how signing up with a new bank or brokerage could save you a bundle. Don't go anywhere.

Ryan Ermey: We are back, and before we go, another edition of Deal Or No Deal that is really nothing more than a thinly veiled excuse to talk about something I'm already working on, which is the Online Broker Rankings, which will be coming out in the October issue of Kiplinger's.

Ryan Ermey: So this upcoming deal isn't actually part of the calculus that goes into the rankings, but brokerages do offer deals that incentivize you to sign up with their brokerage. And all of these I'm going to mention, I mean, they scale up or down depending on how much you deposit. You may not be able to get the full amount that I quote because that may be for people that have $150,000 to deposit. But even on a smaller scale, I mean, you might get some free stuff out of it. If it's $100-

Sandy Block: It's $100.

Ryan Ermey: Yeah. It may not seem like much if you're moving $10,000 over into a brokerage account, but if you're investing in a brokerage account anyway, it's like, if there's a $100 bill on the sidewalk, you're going to pick it up.

Sandy Block: Yeah. Yeah. For sure.

Ryan Ermey: You might even cross the street to pick up.

Sandy Block: Oh yeah.

Ryan Ermey: So here's the current deals. And now, these brokerages, they ... It's like H&M, there's new deals every month. So all of these are expiring soon. So if you have money to move, keep an eye on these, but new deals pop up.

Ryan Ermey: So at TD Ameritrade, you can get up to $2,500 cash to go along with 90 days of commission-free trading for signing up with a brokerage account there.

Ryan Ermey: Schwab will give you $100 if someone who already has a Schwab account refers you, which, you'd think it would be the other way.

Sandy Block: Right. You should get the $100, yeah, the person referring should get the $100. But whatever.

Ryan Ermey: Counter-intuitively, you get the $100-

Sandy Block: It's $100.

Ryan Ermey: ... for being referred.

Ryan Ermey: Merrill Edge will give up to $600 for signing up.

Ryan Ermey: Fidelity will give you up to 500 free trades for two years. Once again, this all depends on how much you're depositing.

Ryan Ermey: Ally Invest, up to $3,500 and 90 days of commission-free trades. Now, the 90 days of commission-free trades happens no matter how much you deposit, but 3,500, you have to deposit I'm sure a small fortune.

Ryan Ermey: First Trade will give you up to $200 and transfer fee rebates for when you transfer your money over. If you're charged a $25 wire transfer fee, they'll rebate you that money. And they'll also give you $50 for each friend that you refer. So that's the normal way.

Sandy Block: Yeah, yeah, you get rewarded for bringing your friends along.

Ryan Ermey: Yeah, Schwab's got it backwards.

Ryan Ermey: And finally, the last deal among the ones that I'm writing up, Trade Station, if you open a new account by August 31st, you get commission-free trading through the end of 2019 if you place six or more trades per month.

Ryan Ermey: And make sure you keep an eye out for my upcoming Online Broker Rankings. It has been a beast of a story to work on. I work hard for the people, trying to save you all some money, find the right brokerage for you. So be on the lookout for that. And I imagine it's something that I'll talk about on these very airwaves.

Sandy Block: And one thing I want to add, Ryan, because I've written about this before, is very often you can get these same kind of deals, say you've got an IRA with a particular financial institution, oftentimes just rolling your IRA into some of these names that you just mentioned, they'll give you several hundred dollars just for doing that.

Sandy Block: So say you've got a 401(k), you want to roll it into, you're retiring and you want to roll into an IRA, or maybe you left your job, look around for these deals, because very often you can get this money simply for moving your money from one account to another. So it's not new money, it's just money that you've had, but you're putting into there, and they will give you money for doing that.

Ryan Ermey: We'll link all this stuff in the show notes, all the deals. And just go with a magnifying glass and read the fine print, and see what you're entitled to.

Ryan Ermey: What do you got for Deal Or No Deal, Sandy?

Sandy Block: Okay. So just before we recorded this today, the Federal Reserve cut interest rates by a quarter point, which is widely expected. So my deal is online banks, savings accounts with online banks, no one is earning a lot of interest on savings accounts now, but you can earn a whole lot more by banking online.

Sandy Block: And I have a question for you Ryan, when was the last time you walked into a bank branch?

Ryan Ermey: Oh, baby. I mean, other than the ATM outside-

Sandy Block: Right, right, like-

Ryan Ermey: ... honestly, I went into one, it's got to be five years ago now. And I went up to the teller to cash a check or do something. They were like, "You know, you can do that-

Sandy Block: Outside.

Ryan Ermey: ... outside at the ATM." And I was like, "Doesn't the T in ATM stand for teller?'

Sandy Block: Well, and that's my point, why pay for a brick and mortar, because that's basically what ... When you use a brick and mortar bank, you're paying in terms of, oftentimes, higher fees and absolutely no interest.

Sandy Block: In our August issue, we have our annual rating of best banks, and our best internet bank is Ally Bank, which is now paying 2.1% on a savings account. Now, that may not sound like much, but I did a little googling around just before this podcast, and I'm not going to name names, but at some of the bigger banks that have branches that nobody goes into anymore, they're paying rates of about 0.03%, 0.05%. and I did find one example of a big bank that's paying 2%, but in order to get that 2%, you need to have $25,000, you have to have a regular balance of $25,000. so you have to give them $25,000 and not spend it. And you have to walk into the bank and ask for this account.

Sandy Block: So basically, I think most people, if you're comfortable doing your banking online, you take your money out of ATM, you can track your account electronically, you're not going to get a whole lot of money on your savings. But why not get 2% versus oh 0.03%? Why not at least earn a little bit more online? And we'll post our story and some of our rankings of banks and things.

Sandy Block: So shop around, compare rates, and get the best deal on the money that you have.

Ryan Ermey: Sounds like a plan, Sandy.

Ryan Ermey: That's it for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit kiplinger.com/links/podcasts.

Ryan Ermey: You can stay connected with us on Twitter, Facebook or by emailing us at podcast@kiplinger.com. And if you like the show, please remember to rate, review, and subscribe to Your Money's Worth wherever you get your podcasts.

Ryan Ermey: Thanks for listening.

Links and resources mentioned in this episode

• The Right Way to Have a Yard Sale
• Worst Things to Buy at a Yard Sale
• Best Things to Buy at an Estate Sale
• Equifax Data Breach Settlement: What You Must Know
• Capital One Data Breach: 5 Steps to Avoid Identity Theft, Fraud
• Best Internet Banks, 2019
• TD Ameritrade Trading Offers & Promotions
• Schwab's Special Offer
• Merrill Edge's Promotional Offers
• Fidelity's Special Offer
• Ally Invest Promotions
• Firstrade's Promotional Offer
• TradeStation's Promotions

Just as consumers are starting to claim their share of the settlement for the 2017 Equifax data breach, Capital One has announced that the personal information of about 100 million Americans and 6 million Canadians was exposed in a hack that took place last March. Software engineer Paige Thompson has been charged with exploiting a vulnerability in Capital One’s network and gaining access to information on people as of the time they applied for a Capital One credit card, dating back to 2005. The data includes names, birth dates, mailing addresses, zip codes, e-mail addresses, phone numbers and self-reported income.

Although Capital One says that credit-card numbers and online log-in credentials were not compromised, the exposure did include details such as credit scores, credit limits, balances and payment history. Plus, the Social Security numbers of about 140,000 credit-card customers and about 80,000 linked bank-account numbers of customers with secured credit cards were breached.

Capital One says that it will notify those affected “through a variety of channels” and that it will offer credit-monitoring and identity-protection services. But if you think that you’re likely a victim, you don’t have to wait to act. Take these steps now to protect your identity or to spot fraud quickly if it does happen.

1. Beware Phishing Scams

Given that the breach involved e-mail addresses and phone numbers as well as names and other bits of info, crooks may target victims with e-mails, text messages or phone calls in attempts to collect money or personal data. A fraudster posing as a representative of a financial institution or government agency, for instance, may call you and mention your name, date of birth or other personal details to gain your trust, then ask you to recite your credit-card number or Social Security number to “confirm” it. “Never authenticate yourself to anyone who contacts you by e-mail or phone,” says Adam Levin, founder of identity-protection service CyberScout. If you’re not sure that a call or message is legitimate, look up the institution’s phone number and call it to see whether it truly contacted you. Don’t click on links or attachments in any e-mail or text message that look suspicious—they could lead you to a scam website or infect your device with malware.

Capital One is also warning customers to watch out for e-mails and calls from scammers claiming to be the bank. If you do receive a fraudulent e-mail, forward it to abuse@capitalone.com.

2. Sign Up for Transactional Alerts

Whether or not your bank-account information was exposed in the Capital One breach, it’s a good idea to receive e-mail or text-message alerts each time a new charge hits your bank account or credit card. Set up the notifications for the lowest transaction amount possible—crooks often test accounts with small charges before they rack up bigger ones. If you do see a charge that you don’t recognize, contact your bank or card issuer right away.

3. Practice Healthy Password Hygiene

Capital One has indicated that customers’ account passwords are safe. But based on other information gleaned about you through the breach or, say, from your social-media accounts, crooks may be able to figure out or change your passwords for various online accounts—especially if your password is obvious, such as your birth date or a pet’s name—and use the passwords in combination with your e-mail address to log in.

A password manager such as LastPass helps you create and store strong and unique passwords for each account you have. When possible, set up two-factor authentication for your online accounts. If there’s an attempt to log in to the account from a device that you’ve never used, for example, you may have to verify that it’s you by entering a code that you receive via text message.

4. Keep Tabs on Your Credit Reports

If you’re among those whose Social Security numbers were compromised, you may be at a higher risk for a criminal to open new credit cards or loans in your name. But anyone benefits from taking advantage of a credit-monitoring service, which sends you an alert each time a significant change—a new credit-card account, for example—pops up on your credit report.

While you wait you wait for Capital One to roll out its credit-monitoring service, check out other free options. CreditKarma.com monitors your TransUnion and Equifax credit reports, and FreeCreditScore.com covers your Experian report. If you’re affected by the Equifax data breach, you’re eligible to get four years of free monitoring of all three reports—but the service isn’t yet available.

You can also check your credit report from each agency free every 12 months at AnnualCreditReport.com. Pore over your reports for any accounts that you don’t recognize or other signs of fraud, such as a mailing address that isn’t yours (crooks may redirect your mail).

5. Freeze Your Credit Reports

A freeze is the best way to prevent criminals from opening new credit accounts in your name. Lenders can’t view your frozen credit report in response to a request for a new credit card or loan, so they’re unlikely to grant credit to someone pretending to be you. Check out our guide on how to freeze your credit.

Ryan Ermey: Today on Your Money's Worth, a long-standing debate within the offices of Kiplinger comes to the air. Kiplinger.com general manager, Robert Long, joins the show to debate me on the merits of credit versus debit with Sandy moderating in our main segment. On today's show, Sandy and I discuss strategies for managing your student loans and reveal more of our most off-the-wall PR pitches. That's all ahead on this episode of Your Money's Worth. Stick around.

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Ryan: Welcome to Your Money's Worth. I'm Kiplinger's associate editor, Ryan Ermey, joined as always by senior editor, Sandy Block. Sandy, how are you doing?

Sandy: Doing good.

Ryan: Well, before we start, I'd like to welcome any and all listeners who have migrated because they've gotten their new subscription to Kiplinger's because we happen to be welcoming a number of former subscribers of Money magazine. If this is your first time listening, welcome. Please go back and listen to all of our hours of wonderful, wonderful content. And otherwise, we're going to get right to it.

Ryan: So, a number of politicians are proposing some form of student loan forgiveness, and we here at Kiplinger's try not to get involved in political issues but we should say that you probably shouldn't be like holding your breath for that.

Sandy: No. Pay those loans. Keep making your payments.

Ryan: Sandy, we've talked about this a little bit before, but what would you say is sort of the most important thing that people should know when it comes to managing student loans, which is a big financial issue for a lot of young people out there?

Sandy: It's a huge financial issue and oftentimes, it's the first big bill that you'll pay out of college. And right now, we're sort of in the summer, a lot of young people have graduated and they typically get a six months' grace period before they have to start making payments. It's really not too soon to start getting things in order and start figuring out how much you owe, what the interest rate is, who you owe and when you have to start making payments.

Sandy: Because when you hear these horror stories about these young people with a $100,000 or $200,000 in student loans, when you drill down often that was not the original balance. That's how much they owed after missing a bunch of payments. And as we talked about in this podcast before, it is almost impossible to get rid of student loans. The bankruptcy rules do not help you at all.

Sandy: The most important thing to do is understand who your lenders are and how much you, what your payments are going to be and get everything ready so you can start making those payments and stay on time.

Ryan: Now, we've talked a lot, not on the show, but certainly within the pages of Kiplinger's Personal Finance magazine about consolidating your loans, and the rules are different when it comes to federal loans, right?

Sandy: Well, there's two ways you can consolidate. One is you can just ... If you have a numerous types of federal loans, you can consolidate them into one payment which makes sense in that you're not going to get lost or something like that. But that won't really save you any money. You can't lower your interest rates unless you extend payments which will lower your payments but isn't going to reduce the impact that it will increase the amount that you owe because you're paying a bit longer.

Sandy: So that's one thing. The other thing a lot of people have been talking about is consolidating into a private loan. Maybe you have some private and some federal and you roll them all into one private loan. Recently, we're hearing more about this is because interest rates have been going down and often times, borrowers are discovering that if they qualify, and that's a big if because you have to have pretty good credit. But if they qualify for a private loan, they may be able to lower the interest rate sometimes by quite a lot.

Ryan: That sort of dovetails into something that I wanted to talk about that I'm experiencing somewhat. I don't have, like some people have just like mountains and mountains like insurmountable amount of student loans that I don't, but I have a fair amount that I pay off every month and it's a good bite out of my paycheck every month. So I'm considering refinancing my loans. If you have good credit and a stable job and steady income, you'll generally benefit from refinancing your loans although it should be said that I'm someone with ... I mean, my credit score the last time I checked is over 800, which is ... Yeah, I know. I know.

Ryan: I'm a pretty big deal, okay? We'll talk about this in our next segment in terms of how I built that credit. But even with my good credit, the fact that I don't make very much money when I went to look at, and I've been shopping around, for where I might refinance my loans. The fact that I don't make a lot of money means that my offers aren't as good as they could be if I made more.

Ryan: One solution to this and I've talked to my parents about this is having a co-signer, which will get you a better rate. And they're sort of, I guess two schools of thought when it comes to refinancing. If you refinance to a lower rate but continue to make payments at the same level, you're going to be paid off much quicker and you'll pay a lot less in interest. Or this is sort of more where I'm coming from because I am paying a lot of money out of my paychecks at the moment and I'd like to pump my cash flow up a little bit, is I can pay over perhaps a longer period of time but at a much lower interest rate and at a much lower monthly payment, which will allow me to increase my cash flow a little bit.

Sandy: Well, there's a couple of risks there that you need to think about, and to back up, a story that our colleague, Kaitlin Pitsker did about financing to a private loan. She said that about 60% of people who apply for these loans are turned down, so don't feel bad.

Ryan: Okay.

Sandy: It's pretty common, but there are two risks. One is that the low rate is almost certainly going to be a variable. So say you decide to refinance to a lower rate, they accept you. It may not stay that way. Interest rates could go up and all of a sudden, those lower payments will go up, too. So, that's one problem which actually are you in favor of trying to pay it off as fast as you can because then you're protecting yourself.

Sandy: The other one that I think people really need to think about when they're thinking about refinancing is you give up a lot of protections that you get with federal student loans depending on the type of loan that you have. With federal student loans, you may qualify to have your payments deferred under certain economic circumstances which include losing your job or having a serious illness. And if you have a subsidized loan, interest rates may not accrue during that deferment period.

Sandy: Private lenders may, if you ask very nicely, they give you forbearance in an ... But they don't have to. And almost certainly, interest will accrue during that period. So that's something you really need to think about. Do you anticipate any hardships that might make it more ... If you think you're going to ever in your life have trouble paying your loans, I think you're probably better off having a federal loan than a private loan because they make the rules. There's no protections.

Ryan: Like I said, the other thing to think about is just think about the economics of the interest rate that you're going to pay and how long it's going to take to pay off. A lot of these sites, if you go, we like Student Loan Hero and we'll link their calculator in the show notes. But refinancing to a lower rate, it could very well be that you can pay less each month save over the life of the loan and not have to pay for very much longer. It's just a matter of what your interest rate is now, what you're allowed to refinance to.

Ryan: I feel like our advice is always shop around, consider your options, et cetera, but once again, we'd urge people to shop around, consider your options and consider the very real possibility that you could be losing some protections afforded by the federal government for having a loan service through them.

Ryan: Coming up, it's a credit versus debit showdown with Robert Long. Don't go anywhere.

Ryan: All right. We are back, we're here with Kiplinger.com general manager, Robert Long, who is notorious around these parts because he is among the only people on our staff who does all of his spending using a debit card. So we saw this as an opportunity for a little bit of debate. I only use credit so Robert and I are going to be going head to head.

Ryan: Robert, thank you so much for coming on.

Robert: Thank you very much. I'm happy to be here.

Ryan: And since Sandy uses both, she is going to sort of moderate the debate. So where should we start, Sandy?

Sandy: Well, I guess, as I said, we give Robert a hard time at his refusal to use credit cards. So I'd love to hear you make your case, Robert, as to why you've decided to pursue a life without credit.

Robert: I think for one thing, it is a matter of streamlining our finances, and Kiplinger writes about this all the time. Cover packages about simplifying your finances.

Sandy: That one coming up, yeah.

Robert: Life is complicated. Managing your money can be complicated. The fewer bills I need to pay every month, the better.

Sandy: Okay, now, Ryan, what's your reason for putting everything on a credit card including the coffee you buy down the street, I assumed?

Ryan: I used to be very much in Robert's camp of keeping things very, very simple. I was debit-only for a long time. Once I got a handle on sort of what my monthly spending looked like, I thought if I'm going to be doing this anyway and if I'm going to be laying out about the same amount of money anyway, why not get free stuff for it?

Ryan: And so that's what I do. I put all of my spending on ... I use a pretty straightforward rewards card, 2% cash back on everything via the wonderful Citi Double Cash card which we've recommended before. And so yeah, I'm getting rewarded for the same spending I was doing anyway.

Sandy: Well, and Robert, I guess the question I always raised with people who are anti-credit or use a debit card is how do you rent a car?

Robert: I've got a simple answer to that. I rent with Alamo. I've had great success with them over the years. They are very easy with debit card holders. I actually, prior to our podcasts, went and looked at the policies for the other major car rental companies. Some of them are somewhat flexible with debit cards, but in most cases you're having to bring multiple forms of additional identifications.

Robert: You may even have to put down a security deposit. I don't mean to give too much for a free plug to Alamo, but it is simply pay with your debit card just as you would with a credit card, no questions asked.

Sandy: And you don't feel like you're leaving money on the table because you're not getting all these rewards that we write about all the time for using credit cards?

Robert: Let me challenge Ryan and that philosophy in general that you're getting 2% back. I think that 2% cash back is a trap.

Sandy: You're entrapped, Ryan.

Robert: You're getting 2% cash back but what if you were spending 10% more every year, 15% more, 20% more, maybe even much more than that because you have a credit card. There are so many studies out there that show spending in general among credit card users is, and you can find all sorts of numbers, but let's call it 15% higher in general with credit card users.

Robert: You look more specifically, I think McDonald's once did a study that showed the average credit card payer has a $7 bill, the person paying in cash has a $4.50 bill.

Sandy: The seamlessness.

Robert: I saw a study out there that shows people with credit cards are better tippers, and by that I mean better for the wait staff, not better for their own wallet. We just, in fact, got an email this morning [about] a survey from a bank rate showing that folks with credit card debt are more likely to spend more on a variety of different discretionary spending categories.

Ryan: Yes.

Robert: We don't need to be [a] psychologist here to understand that it is much easier to fork over your money when it's a piece of plastic than it is to hand over hard-earned, cold, hard cash.

Sandy: But you are using plastic, Robert. It's just a debit card.

Robert: Correct, correct.

Ryan: But it's coming straight out of his bank account, I get that point.

Robert: The difference there is I'm able to literally see the decline of my bank account as I spend where you're not doing that with a credit card.

Sandy: Which is basically why in my house, we use a debit card for groceries and gas, and I use my credit card for like shoes and handbags and trips, and stuff. But Ryan, how do you avoid this temptation to spend money that you don't have since when you have a credit card, you don't have to pay it right away?

Ryan: Yeah. And Robert really makes an excellent point. It's about having discipline. It's like you could make the argument that you shouldn't get a dog because you might be too irresponsible to take care of it. You might not take it out for walks and feed it and do all of the thing. It might get lonely and you leave [it] in your house all day. But before I bought my dog and in this case, before I got my credit card, I made sure that I was going to stick to my monthly budget.

Ryan: Now, the excellent point is that credit cards ... People can be encouraged to think that it's kind of like funny money. You have to be really disciplined about maintaining a budget. In my case, it's pretty easy because I don't have a lot of discretionary money to play with. And I pay my credit card bill off in full every month. But the obvious drawback of credit cards is interest rates if you can't pay it off every month can be really deleterious to your financial picture.

Sandy: But now, Robert, one other issue I have with your strategy is that what about your credit score? We've often recommended even to young people that they get a credit card, buy a small amount every month and pay it off because this is often the only way that you can build a good credit score. Have you done it in other ways or you just not care?

Robert: I should probably point out, in addition to wanting to streamline my finances, really the bigger reason I don't have credit cards is a broader commitment to a debt-free lifestyle. An answer [to] your question, hopefully, I'm not applying for credit going forward. I'm also infamous for being the guy that when I buy a new car, I'm paying cash. I'm saving up for that, pay in cash.

Robert: Right now the only debt that my wife and I have is our mortgage which we are aggressively paying down. To some extent, yes, I don't care.

Sandy: Did you have any trouble getting that mortgage since you didn't have a credit history?

Robert: Now, in fairness, I've had credit cards in my early 20s and probably did build up some, I can't recall exactly what my credit score was when I got my mortgage 15 years ago. I have not checked it since then for the reasons I've laid out here. What is important for people to know is that not having credit cards does not hurt your credit score. It does not enable use as you've talked about to build a payment history with those credit cards to build your credit score. But it's not a penalty.

Robert: So if there are other ways you can build your credit, paying your other bills on time, you're going to be able to build a satisfactory credit score.

Sandy: I guess, the point we'd like to make is just what you did often times for a young person. That is the only credit that you can get. So I think, often for a young person, they do need a credit card because you're not going to buy a house right out of college and sometimes, students loans, you get credit for them and sometimes you don't. And not everybody has student loans.

Sandy: It seems like it's a useful tool but I think it's really interesting that often times I think we've assumed that you have to have credit card. So I think it's interesting that you've been able to do just fine without one.

Robert: One of the things I wanted to stress here, I hope we all might agree that few people, if any people, actually need a credit card to the point you just made, Sandy. There are benefits to them and you may want to get one, but I'm not sure that people really need one. Ryan makes a very good point. If you can use it responsibly, yes, it can do a lot of good to your bottom line.

Robert: The problem, much as we like to believe people will use it responsibly, the problem is most people don't. And again, there's lots of numbers out there but 50% to 60% of people actually carry a credit card balance. The average debt among those people is over $6,000. And on that $6,000 on typical interest rate of 16% or so, you're paying over $1,100 a year in interest.

Ryan: Like I said, if you can't use a credit card responsibly, and I recommend doing what I did was just I didn't get a credit card until I was 26 or 27. That's not 100% sure. I think I was an authorized user on some of my parent's credit cards growing up which is how I was able to build some credit by the time I got my credit card and all of the bills for my houses which I had various roommates have always been in my name, so I've been able to build some credit that way.

Ryan: The other huge benefit of credit cards if you can use them responsibly is that they have much better protections than debit card purchases in the case of fraud. In the case of fraud or theft, you're protected in a case of fraudulent purchases. Companies will wipe out subsequent charges if someone, say, takes your card number. You have absolutely no liability.

Ryan: The Fair Credit Billing Act allows you to dispute charges with your card issuer, and if they're legit, they'll wipe them out. Whereas if you're on the debit card and you enter into a sort of fraudulent situation, the protections aren't nearly as strong.

Sandy: I think the thing, and Robert, I'd like you to get to respond to this. I think most of the debit cards now that are issued by Visa or Master have pretty good protection. So I don't think ... The thing that always worried me about having my debit card stolen is they will make you hold, but you're out of that money until they do.

Sandy: And in a credit card, you can just say, "I'm not going to pay for that, you know, boom box somebody [else purchased]," yes, whereas if somebody cleans out your debit card, you have to fight to get that money back. In the meantime, your bank account is empty. Is that a concern?

Robert: You guys are absolutely right on that. On paper, Ryan is certainly correct. The protections are much better for credit cards. I think as you're getting at, Sandy, in reality, in practice, banks are going to give you those same protections. I have had a couple of instances like I think everybody has where I'm looking at my bank statement and there's three $500 charges from the middle of Ohio where I haven't been in years, if ever. And call up your bank, they recognize pretty quickly that's not your regular spending pattern, fill out whatever paperwork.

Robert: But you're right. For a couple of days, there may be a hold on those funds until they are able to process that and put the money back into your account.

Sandy: And I guess it's what always worried me is while you're fighting over these charges somebody went to Cancun on your debit card or something, while you're fighting to get that money back, you could be bouncing checks.

Robert: Potentially, yes. One of the things I think the banks are pretty smart about these days is recognizing unauthorized usage and I think the idea that your bank account is going to get drained completely is probably not going to happen. In fact, just this past weekend, I got a fraud alert. I think I had gone out and hit the ATM, and hit like three or four things very quickly. To me, they were ordinary expenses but something triggered my bank to say, "Is this you?" And if I hadn't, they would have cut off usage of the card pretty quickly and prevented it from being drained.

Ryan: I remember one time I was working as a cater waiter and I had like this late night gig out in Towson, Maryland, and me and a bunch of other people had to get back to DC. And it was like a whole ... I mean, the company that bused us out there, just left us out there like, "Oh, go ahead and get a cab." And none of the people I was with had any sort of means to pay the cabbie. This was before Uber and before cabs were taking credit cards as a amendatory practice. And so I had them drive me to an ATM at two in the morning in Towson, Maryland and the bank declined my cash withdrawal.

Robert: Because you've never been in Towson?

Ryan: Because I've never been in Towson, Maryland.

Sandy: It was two o'clock in the morning.

Ryan: But I will say in the case ... Because sometimes things go awry even with a debit card. Things go awry with a card reader or whatever and if that's the only card you have in your pocket, that can be tough, too, if it's locked or whatever. So it's even good to just be able to know that I have least more than one card at my disposal these days in case something goes awry.

Sandy: Well, the other thing to your point about fraudulent charges, and I think this applies to both types of cards is I've interviewed ID theft experts before. And they checked their online accounts every day. And I think for credit card holders, that's a good idea because that reminds you of what you're spending and maybe reduces the possibility for running up a bill that you can't pay. And I think for anybody, debit or credit card, it does alert you early to fraud.

Ryan: Well, we're running long on this segment here. I think it's been a healthy debate. And I think generally speaking, the message has been tread carefully. If you're opening a credit account, make sure that you're budgeting responsibly for it. But obviously, there are humongous benefits to reducing debt in your life as much as possible.

Ryan: Robert, plug your stuff. I mean I will just say go to Kiplinger.com, but what's of the people would be on the lookout for?

Sandy: All the time.

Robert: We have lots of great material on kiplinger.com including as you mentioned the specific card that you use is part of Kiplinger's best rewards card of 2019 package. That would be a nice piece of content for people to look into. And I think you're hitting on the right point here which is I don't mean to suggest credit cards are bad for everybody or that the debt-free lifestyle is great for everybody. Find what is right for you, whether it's credit or debit. And if it's credit, find the right card that is right for you and suits your spending habits.

Ryan: All right, check it all out in the show notes, folks. And Robert, thank you again for coming on.

Robert: Thank you very much.

Ryan: After the break, it's teething toys and passion-based investing in a new edition of Wild Pitches.

Ryan: We're back and before we go, Sandy and I wanted to do one of our very, very favorite recurring segments, Wild Pitches, in which we talk about some of our PR pitches that we receive in your inbox that are just a bit outside. So, Sandy, what is yours?

Sandy: I think I mentioned in previous podcast I've been going to a lot or have been invited to a lot of baby showers recently. And we got a pitch recently for some Eco-Chic baby toys and teethers. We were debating before this how long teething lasts, but I don't think it lasts very long.

Ryan: Yeah, I think, I mean a couple of years.

Sandy: Basically, teething toy is something your kid is going to chew on, right?

Ryan: Yeah.

Sandy: So this particular Eco-Chic organic product is BPA free. It's made in the USA. It's non-allergenic, naturally antibacterial. Each piece is made from the finest maple wood in New York City. I didn't realize they're cutting down trees in New York City but I guess they are. Prices start at $26.

Sandy: That's what really stopped me and it reminded me of ... I don't know if they still have Baby Gaps but my view about Baby Gaps was the only people who actually buy those clothes are like aunts and godmothers. Real parents don't buy that stuff because they need to save their money for preschool, and nannies, and diapers, and stuff like that.

Sandy: I think these types of products are really pitched at people like me who are looking for a baby gift, but my advice is if you really want to help out parents, contribute to the child's 529 plan. $26 could go a long way toward college in 18 years, and it'll still be worthwhile once the kid's teeth come in. So that's my advice. Stay away from expensive baby toys even if they're Eco-Chic and help pay for college. What do you got?

Ryan: Well, I mean mine ... Well you've gotten a preview. And I'm not not going to say who pitched it but we're going to go through this really quickly. If you're fresh out of college and starting your first job, you've probably recently got a form from your employer to set up your 401(k). Everyone knows these investments are important, but knowing how much to invest and where can be an overwhelming process, all true so far.

Ryan: While many platforms usually guide you toward pre-chosen numbers and mechanical investing models, there's one common mistake with this option. Your investment should speak to who you are including your passions. Here's why, which uh-oh. The truth is that if you buy stocks in companies you know, think beyond me, not big pharma, you already know something about how the company does business. So, let's hit the brakes-

Sandy: Right now.

Ryan:... pretty hard. First of all, most 401(k)s don't offer individual stocks.

Sandy: No, the vast majority go right into target date funds where you don't even choose the funds.

Ryan: Or even mutual funds. But let's say for the sake of argument that this person is talking about maybe investing in IRA or some sort of other retirement account. This idea that you should buy what you know is this often sort of misconstrued idea from a long time Fidelity Magellan manager and all around investment guru, Peter Lynch.

Sandy: Right. They think, oh, there's a long line at the grocery store. I should invest in them.

Ryan: Yeah, and it's crazy. And the idea that this applies to this sort of ethicalness of a company or values of a company, what if you really loved Blue Apron right when it came out? You want to talk about another IPO that was based around food obvious ... Beyond Meat just went public, like there really isn't very much-

Sandy: They'll be putting it in your 401(k)-

Ryan: ... public data about it. It's done really well. But if you at a few years ago going, "Oh, my god, I'm obsessed with Blue Apron. I think that their model is amazing. It's going to be the next big thing," well guess what? That stock is not worth what it was. Go ahead and take a look at that chart.

Sandy: Eat the food, don't buy the stock.

Ryan: What Peter Lynch was talking about is that if you had deep expertise in a company or an industry that allowed you to drill down into it on a fundamental level to assess the stock, that's when it's worth buying it, not buy McDonald's because you like Big Macs. So, back to the pitch, if you believe in their values, you'll hold the stock for longer and that's always the best approach to investing. And so generally, buying and holding yes is the best approach to investing. But not because ...

Ryan: You can ride a company that you believe in all the way to the basement, you should hold it because you think it's a good stock. And then we say financial markets are created by humans, for humans, and there are plenty of panic attacks and overexcitement with stocks jumping up and down irrationally, very true. You don't want to think like a robot when everyone else is going with their gut. Yes, you do. Yes, you do. We can't stress this enough. You absolutely want to think like a robot when everyone else is going with their gut.

Ryan: It's Warren Buffett's old saying, "Be greedy when others are fearful, and be fearful when others are greedy." Really what we've recommended over and over and over is to have a diversified portfolio with an asset mix that is in line with your tolerance for risk and have a plan for when the market goes down. Make sure that you have a portfolio that when you imagine in your head that stocks plummet by 30%, 40%, whatever, that you're not going to be awake at night because your portfolio has gone down.

Sandy: That's right. And it's interesting because I'm working on a story about this now. One of the reasons that target date funds are working so well for so many people in 401(k) is not because they necessarily beat the market but they prevent you from being stupid. You put your money in a target date fund and then you just go about your life and you don't react emotionally to a big downturn in the market because it almost always gets people in trouble.

Ryan: Yeah. One more thing from the pitch and the person that this PR professional is trying to hook me up with is the CEO of an app. And we have a sentence here, a knowledgeable market expert, this guy lost his shirt in the dot-com bubble. Don't tell me you lost the shirt, I mean come on.

Ryan: So, look folks, don't lose your shirt and the way that you don't lose your shirt is own a diversified portfolio. Own a portfolio that's in line with your tolerance for risk. Don't invest in individual stocks just because you like them or because they're in line with your values. We've talked about this ad nauseam. We've written about this ad nauseam. I'll put stuff in the show notes, but my goodness, be careful out there.

Ryan: And that will wrap things up for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit Kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at Podcast@kiplinger.com. And if you like the show, please remember to rate, review and subscribe to Your Money's Worth, wherever you get your podcasts. Thanks for listening.

Links and resources mentioned in this episode

• Take Control of Your Student Loan Debt (Instead of Letting It Hold You Back)
• How to Refinance Your Student Debt
• Credit vs Debit
• Student Loan Hero’s calculators
• Credit, Debit or Cash?
• Why You Need to Invest in Funds Before Stocks
• How to Be a Better Investor

Your finances might have felt like a plague in your 20s, but thou shalt thrive throughout your 30s and beyond.

Our list of Financial Commandments for your 20s helped you find your financial footing and establish a solid foundation. Now that you're older and (hopefully) wiser, this list of goals will help you continue to build your wealth and blaze a path to financial security.

In your 20s, you developed a marketable skill. Now it's time to apply that skill to increase your earnings.

Research potential career paths for workers with your skill. Identify the types of jobs and companies that might be a good match for you. Consider whether you should obtain some additional training and development, either on the job, using free online courses, going back to school or through some other means. You might even consider moving to a city where you can find more opportunities in your field.

If you decide on a sharp career turn, understand that it can be worthwhile but also risky. You'll need a financial plan to keep your budget steady while you're changing course.

You established a budget in your 20s and perhaps accumulated some savings. But your income and expenses, as well as your needs, wants and dreams, will likely change from year to year. And your budget will need to adjust accordingly.

In other words, big life changes—such as moving, getting married, having kids or starting your own business—typically come with high costs. To ensure you can afford these transitions, you'll need to make room in your budget by identifying opportunities to save. And if you've gotten a raise or pulled in some extra income, you might consider ramping up your saving for emergencies (see commandment #5) and retirement (commandment #6). "It's a balancing act," says John Deyeso, a financial planner in New York City, who works with many young adults. "Once you get into your 30s, you have more money and more goals, so how do you spread that around?"

As your assets grow, you may need more insurance to cover them. Maybe you rent a bigger or more private space now. Maybe you're buying a house (and need home insurance) or car (and need auto insurance). Maybe you have some loved ones who depend on you financially (and you need life insurance to make sure they're taken care of if anything happens to you). All of these situations call for additional protection.

Even if your situation hasn't changed, you should periodically reshop your insurance policies to make sure you're still getting the best deal. To compare auto insurance rates, try insuranceQuotes and CarInsurance.com. For life insurance, you can check rates at Accuquote and Insure.com. If you're changing jobs, be sure you understand your new benefits and how your health insurance premiums will differ from those at your old job.

In your 20s, you came up with a debt-repayment plan. Stick with it throughout your 30s, so you'll enter your forties focused on building your nest egg for the future—not paying off bills from your past.

Remember, your goal is to maintain three to six months' worth of living expenses in your emergency fund. As your income and expenses go up, so should the amount in your emergency fund. Worried that all that liquid cash isn't growing as quickly as it might if it were invested in the stock market? Consider these ways to get higher yields.

When you started saving for retirement, you may only have been able to contribute enough of your paycheck to earn your employer's 401(k) match. Or maybe you've allowed your 401(k)'s auto-enrollment policy to dictate the percentage that you save—typically 3%.

But experts recommend saving 15% or more of your gross income for retirement. The good news: Your employer's 401(k) match or contribution counts. So if your boss gives you 4%, you just need to save 11% on your own. Every time you get a raise, bump up your nest-egg contributions. If you get a bonus or extra cash as a gift, consider saving it for Future You.

Also start thinking about tax diversification, Deyeso suggests. Generally, if you benefit from a tax deduction now for contributing to a traditional IRA or 401(k), every dollar you withdraw in retirement will be taxed at your ordinary income-tax rate. By contributing or converting funds to a Roth IRA or Roth 401(k), you'll enjoy some tax-free income in retirement.

Now is the perfect time to diversify. "Once you get into your 30s and you have the basics [such as an emergency fund and other necessities] settled, you can take on more risk overall," says Erin Baehr, a financial planner in Stroudsburg, Pa., and author of Growing Up and Saving Up.

Typically, sticking with mutual funds and exchange-traded funds can work well for all investors, especially newbies. These types of investments offer much-needed diversification at relatively low costs. Index funds, in particular, are simple and relatively stable, making them a good choice for the core of your portfolio. Depending on your comfort level and your know-how, you might consider investing in some members of the Kiplinger 25, our favorite no-load mutual funds, too.

At this age, you should invest mostly, if not entirely, in stocks because of their greater potential for long-term gains. Among those stocks, you should diversify between large, midsize and small company stocks, as well as domestic and international picks. Also, you should periodically rebalance your portfolio to make sure you maintain your chosen allocations. Doing so will force you to buy low and sell high.

Checking your credit report and scores has never been easier. Your bank and credit-card companies may now allow you to do for free, and you can still visit AnnualCreditReport.com to view your report from each of the three credit bureaus for free every year. See Best Places to Check Your Credit Reports and Scores for Free for other trusted resources.

Regular reviews of your report could help you fix errors quickly, catch an identity thief at work or get on top of a potentially delinquent account. To dispute an error in your report, contact the credit bureau directly. If you notice a problem in one report, check reports from the other two bureaus as well.

Not convinced of your mortality yet? Try waking up in your 30s after a night of heavy partying—the hangover alone will convince you that you are old and going to die soon. So it's time to write a will. Without one, complete strangers will decide how to split up your estate and raise your children.

You can make out a will on your own for $70 or less at a do-it-yourself Web site, such as www.legalzoom.com. If your circumstances are at all complex, you'll need a lawyer, who will charge about $300 to draw up a simple will and $1,000 to $3,000 for an estate plan that involves a will and a trust. Be sure to update these documents periodically to account for major events, such as the birth of a child.

Several other documents—a durable power of attorney, a release-of-information form and a living will—will help loved ones manage your care and your finances if you become incapacitated. "These documents are not just for old people," says Lauren Locker, a financial planner in Little Falls, N.J. "They are critical to your life planning and well-being." Gloomy as it might be to consider, it's better that you clarify all these things ahead of time rather than leaving it to your mourners to figure out.

Though not verbatim, this commandment comes direct from on high—delivered by both Moses and Knight Kiplinger. While the stone tablets warn about the sin of envy and its effect on your immortal soul, Mr. Kiplinger focuses on the financial repercussions: "The biggest barrier to becoming rich is living like you're rich before you are."

By your 30s, you should have a solid sense of what kind of lifestyle you can afford. And though social media and other advances in connectivity make it easier than ever to see what everyone else is doing and buying, you should resist the temptation of comparing yourself with others. If you try stretching your budget and taking on mountains of debt to keep up with your friends, family and the Kardashians, you're likely heading for financial ruin (and no closer to feeling content). So don't compare yourself or your stuff with others. Just focus on your financial goals, live within your means and be happy with your own life. You might even try being happy for your friends and family, too. (Just forget the Kardashians.)

Question: My FICO credit score hovers between 825 and 830, but when I recently switched cellular companies, my new provider reported that my score was 703. Is this inaccurate, or will the phone company’s report negatively affect my score going forward?

Answer: A likely scenario is that the cellular company is using a specialized score designed for the telecommunications industry.

Telecom scores are entirely different from credit scores and “703 might be a really good score,” says credit expert John Ulzheimer, formerly of FICO and credit agency Equifax. Telecom scores emphasize the customer’s behavior on accounts from companies within the industry. “A telecom score would consider how you've managed telecom accounts more than how you've managed credit cards or auto loans. And a lack of any telecom experience is also relevant,” Ulzheimer says.

Credit agency Experian offers a score to companies involved in telecommunications, energy and cable, and it operates on a scale of 400 to 900. A standard FICO credit score ranges from 300 to 850.

Keep in mind that credit scores come in many flavors, too. The FICO score that a credit card issuer may include with a customer’s monthly statement, for example, is from a different source than the free VantageScore credit scores that CreditKarma.com provides. And both FICO and VantageScore create a variety of scores, including separate ones derived from your credit reports with each of the three major credit agencies (Equifax, Experian and TransUnion). Most lenders report to all three agencies, although the information on your credit reports may vary. Any differences among reports are not usually drastic, says Gerri Detweiler, credit expert and education director with Nav.com, a site offering credit scores and information for businesses. If one agency’s report includes a mistake, however, such as a collection account that you don’t owe or some other black mark, it could have a negative effect on a credit score derived from that agency’s data.

You can check your credit report from each of the three agencies free every 12 months at www.annualcreditreport.com. Review your reports to ensure that they include only legitimate accounts in your name. You can also stay on top of your credit scores and reports from each agency free with CreditKarma.com (providing credit-report information and VantageScore credit scores from TransUnion and Equifax) and FreeCreditScore.com (offering your Experian credit report and a FICO score based on Experian data).

If a wireless carrier checks your credit report as part of its vetting process, that will result in a “hard” inquiry on the report, which may pull down your credit score a bit. But it shouldn’t drop more than about three to seven points, says Detweiler.

Question: An address listed on my credit report is incorrect. Is there any reason to start a dispute to change it? -K.K., Christine, N.D.

Answer: It’s a good idea to fix the error. The incorrect address could be the result of a “mixed file,” when information of two individuals gets combined into one credit report, or “it could be an indication of an attempt at identity theft,” says Paul Stephens, of the Privacy Rights Clearinghouse. You can file a dispute on the credit bureau’s website (Equifax.com, Experian.com or TransUnion.com). Stephens advises examining all of your credit reports for suspicious activity. You can order a free copy of your credit report from each bureau once a year at www.annualcreditreport.com.

Question: My wife and I both froze our credit reports to prevent identity theft. With the freeze in place, is it safe to stop checking our credit reports periodically? - G.W., Chantilly, Va.

Answer: A credit freeze is not a foolproof mechanism to protect against ID theft, and it’s still a good idea to check your credit reports regularly. You can get a free copy of your report from each of the three credit bureaus every 12 months at annualcreditreport.com. (The freeze doesn’t affect your ability to check your report.)

A freeze prevents new creditors from accessing your credit report, making it more difficult for ID thieves to take out new credit in your name. But “a freeze does not prevent someone from using an existing account to make fraudulent charges, which is far more common,” says Rod Griffin, director of public education for credit bureau Experian. When you check your report, “you may also find evidence of fraud, such as variation in your name spelling, Social Security number or other identification,” he says. Report any suspicious information or errors to the credit bureau. Go to Experian.com, Equifax.com and TransUnion.com to place a temporary fraud alert for suspicious activity or to dispute information on a report.

"What can I do now to get my finances in better shape for the rest of the year?"

That’s a perennial New Year’s resolution—and one that’s easy to stick to. Here are 15 ways to improve your financial life in 2019, from making the most of tax breaks and protecting yourself from ID theft to making managing your money easier by automating financial tasks.

You can contribute up to $19,000 to your 401(k), 403(b), 457 or the federal government’s Thrift Savings Plan in 2019, a $500 increase over the 2018 limit. Plus, you can add an extra $6,000 if you’re 50 or older. Even if you can’t afford to max out your contributions, try to contribute at least enough to collect any match from your employer—that’s free money—and boost your contributions if you get a raise in 2019. See 8 Steps for Your Annual 401(k) Checkup for more information about making the most of your 401(k) in 2019.

The contribution limits for IRAs also increased in 2019—for the first time since 2013—from $5,500 to $6,000. You can also sock away an extra $1,000 if you’re 50 or older. You don’t need to put the full amount in the IRA at one time. Instead, you can sign up to have some money transferred automatically from your bank account to your IRA every month. See Contribute More to Retirement Accounts in 2019 for more information about this year’s contribution limits for retirement plans and the income limits to qualify for a Roth IRA.

The tax filing season usually begins in late January, and by then you should have received the W-2s and 1099s you need to file your return. The earlier you file, the sooner you can get your refund—and the better you can protect yourself from tax ID thieves. After the tax filing deadline, you can toss many old tax records. The IRS generally has up to three years after the tax filing deadline to audit returns. See When It’s Safe to Shred Your Tax Records for more information about what to keep and what to toss.

If you have an HSA-eligible health insurance policy, you can contribute up to $3,500 to an HSA if you have single coverage or up to $7,000 for family coverage in 2019, plus an extra $1,000 if you’re 55 or older. (To be HSA-eligible, a policy must have a deductible of at least $1,350 for single coverage and $2,700 for family coverage.) Your contributions are tax-deductible (or pretax if made through your employer), the money grows tax-deferred, and withdrawals are tax-free for eligible medical expenses.

If your employer offers an HSA, that’s usually your best bet. Many employers make contributions to employees’ accounts. Otherwise, you can shop for an HSA administrator on your own. See Investing in an HSA? Better Shop Around for more information about choosing an account. Also see Health Savings Account Limits for 2019.

If you have a health care flexible-spending account at work, you usually have to use all of the money in the account by the end of the year or lose it. But 37% of employers now offer a grace period ending on March 15 to use your 2018 money, according to the Society of Human Resource Management. Spend that money before it disappears, by scheduling appointments with your doctor, dentist or eye doctor; buying eyeglasses, prescription sunglasses, contact lenses or contact lens solution; and purchasing prescription drugs and drugstore items such as sunscreen with SPF 15 or higher. See New Rules for Your Flexible Spending Account for more information about eligible expenses.

Many employers have been expanding their wellness programs and sweetening the incentives to entice participation. New programs usually start on January 1. Find out if your employer is offering cash, health savings account contributions, gift cards or other perks if you sign up for a health assessment or biometric screening to measure cholesterol or blood pressure, participate in a fitness program, or reach certain health care goals. Your employer may also offer free or discounted gym memberships, smoking cessation or weight-loss programs, or access to a wellness coach, nutritionist or stress counselor. See How to Cash In on Your Good Health for more information.

Also see if your employer offers tools to help you compare medical expenses from providers in your area, save money on prescription drugs, search for in-network providers and make the most of your health insurance. See How to Save on Prescription Drugs for some resources and tools to help you save on drug costs.

Having your regular bills paid automatically from your bank account makes you less likely to miss a payment and could even earn you a discount—especially for student loans, car and home insurance premiums, auto loans and mortgage payments. Also scour your bills for ways to avoid paying pesky fees. See How to Avoid Paying 17 Pesky Fees for more information.

You can check your record at no cost every 12 months at each of the credit bureaus through www.annualcreditreport.com. Look for errors or suspicious activity. Even if you don’t plan to take out a loan anytime soon, your credit record or score can still affect your insurance rates in most states, as well as your ability to get a cell phone or apartment, your credit card offers and even your ability to get a job. See Best Places to Check Your Credit Reports and Scores For Free for more resources (and to avoid look-alike sites that charge hidden fees).

In an era of data breaches, a credit freeze can be a smart way to protect yourself from ID theft. A credit freeze prevents new creditors from accessing your credit report, making it more difficult for ID thieves to take out new credit in your name. You’ll have to freeze your credit record with all three credit bureaus separately for this strategy to be effective, but a new law that took effect in September 2018 prohibited the credit bureaus from charging a fee to freeze your record or lift the freeze. See You Can Now Freeze—and Unfreeze—Your Credit Report for Free for more information.

The beneficiaries you designate on your retirement accounts and life insurance will inherit that money when you die, no matter what your will says. So it’s essential to make sure those beneficiary designations are up-to-date. While you’re at it, review your basic estate-planning documents, including your will, health care proxy, living will, power of attorney and any trusts to make sure they’ve been updated for any life changes or tax-law changes. See Estate Planning: A Family Affair for more information about updating your estate plans.

Many states have changed their abandoned-property laws and are quicker to take over accounts. Now, many states will take over your account if a financial institution hasn’t heard from you for three or five years, even if your address hasn’t changed. Contact your financial institutions at least every three years just to let them know the account is active. See Dormant Accounts Pose a Risk for Buy-and-Hold Investors for more information.

It’s also a good time to check your state’s unclaimed property database to see if the state is holding any abandoned property in your name, which could be from dormant accounts or from checks that were not cashed or were returned in the mail. You can search for your state’s database at www.unclaimed.org. It’s also a good idea to search the database in every state where you have lived.

Most experts say you should keep at least six months’ worth of living expenses in a liquid account that you can tap in an emergency, but the specifics vary depending on your income, expenses and other sources of money. See How Much to Save for an Emergency for more information about calculating how much to set aside. If you had to spend money from your emergency fund over the past few years, start rebuilding the balance. See 7 Smart Ways to Build Your Emergency Fund for more information.

You have until April 15, 2019, to save up to $5,500 in a traditional or Roth IRA (or $6,500 if you’re 50 or older) for 2018. Depending on your income, your contributions to a traditional IRA could be tax-deductible. Or you could forgo a current tax break and contribute to a Roth IRA, from which withdrawals will be tax-free in retirement. See my column about the income and contribution limits for 2018. If you aren’t working but your spouse is, he or she can contribute to a spousal IRA in your name. And children who have any earned income from a job in 2018 can save in a Roth IRA, too, which can give them a huge head start on saving for the future (see Helping Young Workers Open a Roth IRA for more information).

If you had an HSA-eligible health insurance policy in 2018, you have until April 15, 2019, to make your 2018 contributions. (Your contributions will be prorated based on the number of months you had an HSA-eligible policy if you didn’t have an eligible policy in December 2018). See How Much Families Can Contribute to a Health Savings Account. And some states give you until April 15, 2019, to make tax-deductible contributions to a 529 college-savings plan for 2018. See Deadlines for 529 College-Savings Plans.

Now that the standard deduction has doubled, fewer people will be filing an itemized tax return, which means they won’t be able to deduct their charitable contributions. It’s not too early to develop your charitable-giving strategy for 2019. If you’re unlikely to itemize, consider ways other than writing a check to a charity to get tax benefits for charitable gifts, such as making a tax-free transfer from your IRA to charity. (People who are 70½ or older can give up to $100,000 tax-free from their IRA to charity each year, which counts as their required minimum distribution but isn’t included in their adjusted gross income.) See The Rules for Making a Tax-Free Donation from an IRA for more information.

Or you may want to stagger your donations, making multiple gifts in a single year so you qualify for a charitable deduction and taking the standard deduction in years you don’t make gifts. Also consider opening a donor-advised fund; you can make a larger (tax-deductible) contribution in one year but have an unlimited amount of time to decide which charities to support with money from the fund. See Charitable Giving Under the New Tax Law for more information about these strategies.

If you are over age 70½, you must take required minimum distributions from your IRAs and 401(k)s every year. (You can delay taking RMDs from your current employer’s 401(k) if you are still working.) You generally have until December 31 to take the withdrawal (or April 1 of the following year for your first RMD). The required distribution for 2019 is determined by your balance as of December 31, 2018, and an IRS life-expectancy factor based on your age. You can use our RMD calculator to figure out how much you must withdraw.

Also talk with your IRA administrator about your options. You may be able to have the money sent to you automatically each month or quarter or by a certain date, or you can take the money whenever you want on your own. You might also opt to give some or all of the RMD to charity. See 10 Smart Steps to Minimize Taxes and Penalties on Your RMDs.

At least once a year, it’s a good idea to add up your assets and likely retirement income to determine whether your savings are on track to reach your retirement goals. If you’re falling short, get on track by making some adjustments, such as boosting savings, downsizing or moving to a less-expensive area, cutting spending or working longer. See Countdown to Retirement for more information.

The Capital One Venture Visa card won a nod in our latest roundup of rewards cards as one of the best that offer travel rebates and charge an annual fee. Its rewards are generous enough to justify $95 a year (waived the first year), but the Venture card is also simple: You get two miles per dollar spent on all purchases, and you can redeem miles at a value of a penny per point for statement credits on recent travel purchases.

In December, the Venture card introduced a new perk: airline transfer partners. Travel credit cards that let you transfer points to partner loyalty programs or use your points to cut the cost of reserving travel directly or through a portal give you more flexibility. With most of its partners, Capital One Venture allows you to transfer miles at a rate of two Venture miles to 1.5 airline miles. Because the card earns two miles per dollar spent, “for every dollar you spend on the Capital One Venture card, you are earning 1.5 transferred miles,” says Julian Mark Kheel, editorial director of ThePointsGuy.com.

Here’s one catch: There are no U.S.-based airlines on Capital One’s list of 14 airline partners. That means you would have to, say, dig into partner airlines’ websites to figure out the best ways to use miles from foreign carriers to fly on U.S. airlines for domestic flights.

The card has other perks: It reimburses your application fee for either TSA PreCheck or Global Entry, and it returns 10 miles for every dollar spent on a hotel reservation at Hotels.com (through January 2020). You’ll also earn 50,000 bonus miles after spending $3,000 on purchases within the first three months of opening your account.

Frequent travelers will probably get more value out of a premium travel rewards card, such as the Chase Sapphire Reserve, which offers three miles per dollar spent on travel and dining, as well as extra perks such as airport lounge access. Sporadic travelers who want a travel card without paying the annual fee can still rack up transferable miles—albeit at a lower rate—with the Capital One VentureOne card.

Canceling and replacing a lost debit or credit card can be a hassle. After the new card arrives in the mail, you need to update every retailer, streaming service or utility provider that relies on your card number for payments. Now, many banks and credit card issuers are adding the option of temporarily “locking” your card instead, in case you want to buy some time to search for your card.

A lock can be an on/off switch in the bank’s app or on its website, or it can be a more sophisticated feature that allows you to specify, say, the locations or the types of transactions that are approved for your card. A lock will typically prevent new purchases, ATM activity, cash advances and balance transfers, but it will allow automatic or recurring payments, returns, credits and dispute adjustments. For extra security, you can also turn a card “off” that you are leaving behind while on vacation. Most issuers allow indefinite locks, though American Express lifts a lock after seven days.

You should lock your card as soon as you notice it’s gone or find an unfamiliar charge, then investigate further before contacting your bank, says David Keenan, senior vice president in card products at Fiserv, a financial technology company that has a locking and alert app called CardValet (available at Fiserv partner banks). If you can’t find your card, notify your issuer. Most issuers will send you a new card free, but they may charge a fee for rush deliveries.

If you’re waiting for a new debit card to arrive and need to withdraw cash, a bank branch may provide you with a temporary debit card on the spot. Some issuers also help you update merchants with your new card number. American Express will allow most recurring payments to go through seamlessly. Bank of America may provide your new card number to merchants with whom you have recurring payments, and Wells Fargo’s Control Tower tool will show you a list of merchants with whom you’ve had recurring transactions within the past 12 months.

If you’re a glass-half-empty kind of person, there are plenty of dispiriting headlines these days — from a volatile stock market to the government shutdown — that could ruin your holiday cheer.

Here at Kiplinger, we’re more optimistic. We’d prefer to raise that half-full glass and make a toast to any of a number of important things going right in the world today. We’ve rounded up 11 developments, economic and otherwise, that reveal brighter days ahead in 2019. Take a look.

The economy will keep chugging -- figure on GDP expanding by another 2.7% in 2019 -- forecasts The Kiplinger Letter.

Consumers will continue to spend freely in 2019, shelling out nearly 2.7% more than in 2018. Of course, if the stock market correction lasts well into the new year, then consumers will cut some spending to shore up retirement savings. But many such corrections have been temporary.

High employment will keep folks feeling optimistic. Look for the unemployment rate to drop to 3.4% in 2019, the lowest since 1969.

Scarce labor means rising wages — up 3.5% on average in 2019, versus 3% in 2018, forecasts The Kiplinger Letter.

“Everything leads us to believe that wages will begin rising by year-end and more quickly than they have over the past eight years,” affirms Andrew M. Challenger, vice president of the outplacement company Challenger, Gray & Christmas. (See Wages Are Finally Set to Rise in 2019.) “Amazon’s minimum wage increase to $15 an hour is a bold move that will escalate the fourth-quarter war for new talent.”

Retirees collecting Social Security benefits will see a boost, as well. The Social Security Administration announced that benefits will increase by 2.8% in 2019 — the largest cost-of-living adjustment since 2012.

Even those who rely on their savings yields for income are enjoying greater returns these days. The Kiplinger Letter forecasts the yield on the 10-year Treasury note to edge up to 3.2% by year-end and to 3.6% by the end of 2019. Big banks have been slower than small banks, online banks, and credit unions to reward savers, but their rates on money market accounts and CDs are likely to participate in the general upward move.

The fifth generation of cellular service, or 5G, will bring speeds 10 to 100 times as fast as today’s. 5G will be a disruptive force in the economy because of its sweeping potential, beyond raw speed. Carriers are racing to spread the technology in dozens of cities through 2019. Among the early uses for 5G:

• Virtual and augmented reality, on the go or at home, for video gaming, live sports, video chats, worker training, warehouse assistance, etc.
• Internet-of-things applications using millions of cheap, low-powered sensors to monitor factory equipment, water pipes, power lines, crops, drones, cars and more.
• Advanced surveillance cameras with ultra-high-definition, real-time video that uses facial recognition and precise location tracking to help police spot criminals.
• Remote operation of machinery on work sites with instant response times, even when an operator is hundreds of miles away — a whole new way to telecommute.
• Plus, ultra-HD video streaming along with huge file downloads and uploads.

More good news on the mobile front: In 2019, many mobile carriers plan to start rolling out a new line of defense against robocalls — a kind of caller authentication dubbed Stir/Shaken. The service is designed to cut down on “spoofing”—the trick spammers use to make their calls appear to come from a local number. Once Stir/Shaken is implemented by Verizon, AT&T, Sprint, T-Mobile and other mobile companies, phone calls made on their networks will carry a digital key that will make it difficult for spammers to disguise their identities.

The new tax law delivers a host of benefits to taxpayers at all levels. For starters, not only is the top rate lowered from 39.6% to 37%, but that rate also kicks in at a higher income level. And, note that whatever new bracket you fall in, more of your taxable income will be hit with lower rates.

A hallmark of the new law is the near-doubling of the standard deduction to $12,000 on single returns, $18,000 for head-of-household filers and $24,000 on joint returns. Congressional analysts say bulking up the standard deduction will let more than 30 million taxpayers avoid the hassle of itemizing write-offs on their tax return because the bigger standard deduction would exceed their qualifying expenses.

Starting in 2018, the $1,000 tax credit for each child under age 17 is doubled to $2,000. Additionally, the new law significantly increases the income phase-out thresholds so that more higher-income families will pocket child credits.

The law offers a different kind of relief to individuals who own pass-through entities—such as S corporations, partnerships and LLCs—which pass their income to their owners for tax purposes, as well as sole proprietors who report income on Schedule C of their tax returns. Starting in 2018, many of these taxpayers can deduct 20% of their qualifying income before figuring their tax bill. For a sole proprietor in the 24% bracket, for example, excluding 20% of income from taxation has the same effect of lowering the tax rate to 19.2%.

At long last, the homeownership rate is starting to tick up after falling for years. And it’s likely to keep rising from its current rate of 64%, after hitting a low of 63% in 2016. At the peak of the housing boom, the rate stood at nearly 70%.

With the economy strong and unemployment low, more people are finally buying homes. Recent increases in employment have been especially strong for folks ages 25 to 44, the same group whose homeownership rate had fallen most in the wake of the recession.

• More first-time buyers are a boon for everyone linked to the housing industry — home builders, sellers of home furnishings, Realtors, mortgage loan officers, and others.

After five years of turmoil, Obamacare insurers now know how to price plans and are finally turning a solid profit. (Never mind the recent federal court ruling that Obamacare is unconstitutional. For now, the law remains, and 2019 coverage is unaffected.)

Premium increases are down, and competition is up in Obamacare insurance markets for plan year 2019. For the first time since 2015, the number of participating insurers will grow. And only four states will have just one insurer, compared with 10 in 2018.

• Average statewide premiums in the individual market will rise more than 3% in 2019, a big slowdown compared with 2018, when premiums soared an average 30%. Notably, premiums will fall in 12 states, a welcome respite for self-insured Americans.

Amazing artificial intelligence tech is on tap as today’s most cutting-edge AI rapidly progresses and new applications begin to explode in number. More and more businesses will harness AI to hike employee productivity and enhance efficiency. The economic impact will be felt everywhere in a tech revolution akin to the advent of the internet.

AI computer programs learn as they go, separating themselves from analytics tools that simply crunch data and churn out static results. The key ingredient? Huge amounts of data fed into fast computers to make better predictions, from diagnosing illnesses to choosing job candidates. The practical uses of AI are almost endless:

• Truckers can plot better maps using data on past traffic snarls to plan for and avoid future jams.
• Drillers can pinpoint the best spot to search for oil and gas.
• Pharma companies can predict which drug combinations are most effective.
• Banks can ferret out fraud by learning a customer’s behavior…typing speed, mouse movement, etc....and detecting when a criminal has hacked into an account.
• Warehouses can roll out AI-driven mobile robots that can move products and pluck items off shelves.
• Other uses: Legal writing. Military logistics. Robotic surgery. Drone flying.

AI will mostly enhance, rather than displace, human workers. For example, AI can now read X-rays for medical problems better than humans, but radiologists are still needed to communicate results and decide whether to do an invasive exam. In fact, a slew of new jobs will be created — AI coders, robot managers, etc.

More consumers could soon get access to credit, thanks to new methods for assessing their creditworthiness. The House recently passed legislation that would allow public-housing authorities, utilities and telecom companies to report on their customers’ payment history to credit reporting agencies. Fair Isaac Corp., the creator of the ubiquitous FICO score, now uses rent payments in its scoring. Traditionally, millions of people haven’t used credit enough to qualify for a score.

• The shift spells cheaper loans and more spending for some folks. Consumers who haven’t regularly used credit cards and the like but have a record of paying bills and rent on time stand to qualify for more loans at lower interest rates than before. That extra buying power should be good news for the businesses that cater to them.

Employers are being more generous with benefits, thanks to the labor crunch. More than a third of firms beefed up benefit packages in the past 12 months to attract top talent, according to a recent survey.

All types of parental leave and telecommuting options are on the upswing. So, too, are wellness perks: Standing desks, on-site stress management programs, etc. Free food and drinks, legal services and pet-centered perks are being offered, too. On the pet front: Insurance, bereavement and adoption leave, and doggie day care. Firms are offering more retirement help to retain and attract older workers.

Many firms also now give paid family leave to hourly workers, not just salaried folks. Companies that hire a lot of young people are offering to help repay their student loans as a retention tool. Estée Lauder, for instance, provides $100 per month in such aid.

The state’s citrus crops were ravaged in 2017 by Hurricane Irma and bacterial disease, but the devastation of 2018’s Hurricane Michael spared much of the Sunshine State’s centrally located citrus groves.

• The U.S. Department of Agriculture forecasts a 76% increase in orange yields for the upcoming harvest. For grapefruit, a 73% jump. Tangerines and tangelos, a 60% rise. It’s an impressive rebound from last year, which was among the worst harvests in years.

Question: I remember reading a while back that everyone starting this fall will be able to freeze their credit report for free. Is this change effective now, and what do I need to do to get my free freeze?

Answer: The law providing free credit freezes took effect on September 21. The three big credit bureaus—Equifax, Experian and TransUnion—can no longer charge a fee to place or lift a credit freeze. In the past, the cost to freeze your credit report varied by state. Some states required free credit freezes for their residents, but others let the credit bureaus charge $5 to $10 every time someone wanted to freeze their credit record or lift the freeze (when applying for a loan, for instance).

A credit freeze prevents new creditors from reviewing your credit report, making it harder for identity thieves to take out credit in your name. For it to be effective, you’ll need to contact each of the credit bureaus separately to initiate a freeze. To see what steps you need to take, go to the Equifax freeze page, the Experian freeze page and the TransUnion freeze page.

Once you request a freeze either online or by phone, the new law requires the credit bureaus to implement it within one day. And if you ask for the freeze to be lifted, the credit bureaus have one hour to do it. “That is the law’s maximum time, but for most people setting the freeze online or by phone, it will be pretty close to instantaneous,” says Francis Creighton, the president of the Consumer Data Industry Association, a trade organization for credit bureaus and other consumer reporting agencies.

Some states have additional consumer protections. In Utah, for example, the credit bureaus must initiate or lift the freeze within 15 minutes of the request for a freeze on a mobile app, says Rep. Jim Dunnigan, who sponsored the credit freeze legislation in the Utah House of Representatives (Utah’s law took effect in May). You can find out about additional consumer protections in your state from its division of consumer protection or the state attorney general’s office.

The freeze remains in effect until you take steps to remove it—either temporarily or permanently. “Understanding the correct terminology is important,” says Eva Velasquez, CEO and president of the Identity Theft Resource Center. “A thaw (or unfreezing) of one’s credit allows them to temporarily remove the freeze for a specified period of time. For example, if a consumer knows they will be applying for credit, they can request a thaw for a day, or a week or another specified time period. And after that time period has elapsed, the credit will freeze again—no additional action is necessary on the part of the consumer.” Lifting a credit freeze, on the other hand, removes the freeze until the consumer actively requests the freeze from the credit bureau again. It’s free whether you lift or thaw a freeze.

The new law also lengthens the duration of a fraud alert that you can place on your credit file from 90 days to one year. A fraud alert signals to businesses that you may have been a victim of identity theft and that they should verify your identity before opening any new accounts. You need only place a fraud alert with one credit bureau, which will notify the others.

For more information about protecting yourself against identity theft, see The Equifax Data Breach: What You Should Do. Also see the Identity Theft Resource Center’s How to Place a Credit Freeze guide.

The end of summer, when job and school routines kick back in, is a great time to kick your financial life into gear, too.

We’ve made it easy with our roster of quick financial tips designed to save you money, get you on track to reach a goal or simplify your life. The suggestions run the gamut from automating investments to setting up a budget to thwarting identity thieves. Each tip will take only 15 or 30 or — max — 60 minutes.

After years of bull-market gains, you might have more of your assets in stocks than you should. Find out by visiting Personal Capital (www.personalcapital.com), an online advisory firm that will manage your portfolio for a fee but also provides free tools for do-it-yourselfers. Link your investment, bank and credit accounts and the site will give you a broad view of your finances. Under the Planning tab, click on “Investment Checkup.” After you answer some simple questions about your investing goals, the site will suggest a target allocation, which you can compare with what you currently have.

Once you’ve linked your accounts on Personal Capital, go back to the Investment Checkup tool and click “Costs.” You’ll see what you pay in fund fees as a percentage of assets, broken down by investment account (at any firm) or for your entire portfolio. For comparison, the average expense ratio for a typical diversified U.S. stock ETF is 0.38%, and it’s 1.10% for the typical actively managed diversified U.S. stock fund.

Dividend-paying companies often disburse payments every three months—which can lead to dry spells for income investors when different stocks pay out on the same schedule. Some brokerages, including E-Trade, Merrill Edge and Schwab, have a tool that maps out your next 12 months of dividends. Otherwise, go to www.nasdaq.com and enter your stock holdings. If you want to add stocks that pay out in months that look sparse, see 7 Top Monthly Dividend Stocks and Funds to Buy. You can check payout dates for most U.S. stocks at www.nasdaq.com/dividend-stocks/dividend-calendar.aspx.

Investing app Acorns helps you reach your financial goals using the money you would otherwise toss in your coin jar. Link a credit or debit account, and every time you make a purchase on that card, Acorns will round your purchase up to the next dollar and invest the difference in a portfolio of ETFs consistent with your investing style and needs. You can also make automatic contributions from linked bank accounts. A typical user invests $50 to $60 per month, including rounded-up and automatic investments, says CEO Noah Kerner. Acorns charges $1 per month but waives the fee for students who set up an account with an “edu” e-mail address.

Keep up with the day’s stock market moves at Finviz. You’ll see a heat map of stocks in Standard & Poor’s 500-stock index, arranged by sector. Green stocks are up, red are down, with the ticker symbol and percentage change displayed. You can also choose to view world stock markets or exchange-traded funds. Click on “News” to see the latest business news and selected blogs, too.

With the bull market in its 10th year, the market is rife with attractive stocks—if only their shares were a bit cheaper. But investors looking to “buy the dip” needn’t eye the market constantly. Most major brokerages will allow you to create watch lists and set alerts for your favorite stocks. Fidelity investors, for instance, can receive alerts via e-mail or text when a stock on their watch list moves up or down by a certain percentage or advances above or falls below a certain price. If you’re looking to lighten up rather than buy, take some profits when a stock hits your target price.

Even if you can spare only a small amount of cash each month, having regular, automatic transfers from your checking account to your investment account will put you on the path to achieving your goals. Plus, you’ll hardly miss the money if you pay yourself first—that is, shave it from the top of your paycheck. Log in to your brokerage firm’s website and look for instructions on setting up transfers; you’ll need to enter your bank’s routing number, your checking account number, and the amount and frequency of each transfer. (You can also go to your checking account to set up the transfer—but watch out for fees the bank may charge for external transfers.)

You should hold on to your tax returns indefinitely, but you can shred W-2 and 1099 forms plus canceled checks and receipts for charitable contributions after three years. If you’re self-employed, you can shred receipts for business income and expenses after six years. Keep home purchase documents for three years after you’ve sold your home. To convert paper documents to electronic files, use a scanner; the IRS accepts digital copies. And while you’re getting organized, track down documents you may need later, such as Form 5498 from your financial institution, which shows nondeductible contributions to your IRA. Otherwise, you could end up paying taxes on those contributions when you take withdrawals.

Thanks to the new tax law, the amount of money your employer withholds from your paycheck may no longer line up with how much you owe the IRS. You could be paying more than you should now, or you could be paying too little and end up with an unexpected tax bill next spring. Gather your most recent pay stub and your 2017 tax return and run your numbers through the withholding calculator at www.irs.gov. If you need to make adjustments to your withholding, file a new W-4 form with your employer.

Couples can budget as a team using You Need a Budget ($84 per year). Start by syncing your bank and credit accounts (or entering the balances manually) and deciding how to allocate your dollars over the course of the month using YNAB’s categories or your own. YNAB aims to distribute all of your income between monthly expenses and longer-term goals (including savings), so you can handle large, unexpected expenses more easily. Or link all your financial accounts to Mint (free) to track both your budget and upcoming bills. Your bank or credit union may also offer free budgeting tools.

To ensure that you have enough in the bank to cover your monthly bills—and to avoid cluttering your calendar with multiple due dates—call each biller and ask whether you can change the due date to best align with your cash flow.

Whether you want assistance with a specific task or a full-fledged strategy for your money, a financial planner can help you get on track. At www.napfa.org, you can search for fee-only advisers in your area and filter by specialty, such as high-net-worth clients or tax planning. If you want a one-time checkup, look for fee-only certified financial planners at www.garrettplanningnetwork.com, whose members charge by the hour. Choose three or four planners and make appointments with each so you find the best fit.

Loading your payment cards onto a digital wallet will lighten your leather one—or provide a handy backup if you accidentally leave your plastic cards at home. Tap and pay at the store with apps such as Apple Pay, Google Pay and Samsung Pay. With Apple Pay or Google Pay, the payment terminal must have near field communication (NFC) technology, but Samsung Pay works with most magnetic-stripe readers as well as NFC terminals. You can also use Google Pay, Samsung Pay and Apple’s Wallet apps to store and use loyalty cards, or try a separate app such as Stocard or Key Ring.

At MissingMoney.com, see whether assets such as old bank accounts, stocks and bonds, utility deposits, or insurance policies have been turned over to the state. (If your state does not participate with MissingMoney.com, go to www.unclaimed.org for a link to your state’s web page for unclaimed property.) Search in states where you’ve previously resided and under former surnames, too, as well as for the names and states of your family members.

Recheck the beneficiaries on your retirement, savings and investing accounts, life insurance policies, and health savings accounts to make sure your assets go where you want them to. With most accounts, you can accomplish this online: Log in to your account provider’s website and poke around to find the beneficiaries tab (most likely in the account settings or profile section). For your brokerage account, you may need to search for a “transfer on death” form to print and sign. If your spouse isn’t your retirement account beneficiary, he or she may need to sign a consent waiver. If you’re updating beneficiaries for a pension or group life insurance policy, ask the human resources department if this info can be updated online.

A living will lets your medical providers—and your loved ones—know your wishes at the end of your life, and a health care proxy designates the family member or friend who can make decisions in a medical emergency if you aren’t able to. These two documents go hand in hand. The American Bar Association has resources to help with a health care proxy, and so does www.caringinfo.org, which has state-specific forms. Sign the health care proxy and living will and give the documents to your health care providers.

Ask all of the banks you do business with whether they will redeem your savings bonds; many banks require you to be a customer for at least six months. Or you can mail them to the Treasury Retail Securities Site, P.O. Box 214, Minneapolis, MN 55480 (see the factsheet at TreasuryDirect.gov for information about the procedures). To make the process easier in the future, convert your savings bonds to electronic bonds. That way you can redeem them online when you’re ready.

Head off haggling over who owes what after dinners out with friends. With Splitwise (free online or as an app for Apple and Android phones), you can split expenses, track IOUs and balances, and settle up anytime using PayPal or Venmo (you can also record cash payments). Create a group, enter a bill and select the people involved; Splitwise will do the math. It keeps a running total, so you can pay what you owe in one big payment instead of several small ones.

If your bank covers a checking-account overdraft, you could pay a fee of $35 or more. Instead, set up an automatic transfer from a linked savings account to your checking account in case you overdraw. If you must pay a transfer fee, it’ll likely be $5 to $15. And rather than pay up to $3 to transfer money from your account to an account outside the bank, sign up for a free peer-to-peer payment app. With Zelle, for example, you can send money from your bank account to recipients at other banks in minutes. (At least one member of the transaction must have an account with a bank or credit union that is a Zelle participant.)

If you have a high-deductible health insurance policy, you can likely tap the triple tax benefits of a health savings account: Your contributions are tax-deductible (or pretax if made through your employer), the money grows tax-deferred, and it can be used tax-free for out-of-pocket medical expenses—now or in the future. If your policy has a deductible of at least $1,350 for self-only coverage or $2,700 for family coverage, you can contribute up to $3,450 a year to an HSA for individual coverage or $6,900 for family coverage in 2018, plus an extra $1,000 if you’re 55 or older. You can’t contribute after you’re on Medicare, but you can use the HSA money tax-free to pay Medicare Part B, Part D and Medicare Advantage premiums after age 65, in addition to other medical expenses. If your employer doesn’t offer a plan, check HSASearch.com for a list of HSA administrators. Look for a plan that has low fees and lets you invest HSA money in mutual funds for the long run, which will give you the biggest tax benefits.

Your credit card issuer may provide a free credit score (see 10 Little-Known Perks). Or you can use a free online tool such as CreditKarma.com or FreeCreditScore.com. To help nudge that number upward, reduce your credit utilization ratio—the amount you owe on your credit cards compared with the total limit. Ask your credit card issuer to raise your limit (either by phone or by filling out a request form on the issuer’s website). You may need to supply your income and other details, such as your occupation or your monthly housing payment. Most decisions are instantaneous.

Retrieve your credit reports from the three major credit agencies (Equifax, Experian and TransUnion) free once per year at www.annualcreditreport.com. Review each report for errors or signs of identity theft, such as a loan you never opened. Then sign up for services that regularly scan your credit reports for changes that may indicate identity theft and that send you alerts of those changes through a mobile app or e-mail. Among free services, Credit Karma monitors your Equifax and Trans­Union reports, and Experian’s tool at www.freecreditscore.com keeps tabs on your Experian report. For paid services that offer more-robust monitoring, see These Services Alert You to Identity Theft. Are They Worth It?

Rather than accept a late-payment penalty or fee, call your credit card issuer and ask for forgiveness. A 2018 poll from CreditCards.com found that 84% of those surveyed who asked for a break had a late fee waived, 70% had an annual fee waived or lowered, and 56% received a lower interest rate when they asked their issuer. Point out your consistent payment history, frequent use of the card or anything else that may help your case.

You could be missing out on lucrative rewards and initial bonuses. A couple of our favorites: Citi Double Cash offers 2% cash back on all purchases (1% when you buy and 1% when you pay the bill), and Chase Sapphire Preferred ($95 annual fee, waived the first year) pays back two points per dollar spent on travel and dining and one point on everything else, with flexible options to redeem points for travel and other Purchases. (For more top picks, go to The Best Rewards Credit Cards, 2018.)

Log in to your online credit card account to turn on payment reminders via text or e-mail so you don’t miss your due date. While you’re at it, look for other alerts that may be useful to track your activity and curb overspending, such as notifications when your balance exceeds a certain amount or a purchase goes through.

Run a checkup on your home wireless network to keep hackers at bay; consult the router’s manual or go to the manufacturer’s website to get instructions. Turn on network encryption and the firewall, and change the router’s default network name and password. If you use a smart device—say, an Amazon Echo or Google Home speaker or a Wi-Fi-connected home-security system—create a second network for it that’s separate from the one you use for your PCs and laptops. If snoops crack into the device on the second network, they’ll have a harder time seeing activity on your computers.

Review the settings and security pages for each of your social media accounts to limit how widely you share your information with friends, the public and advertisers. On Facebook, you can use options on the settings menu to share information only with specific people, exclude your profile from search engine results outside of Facebook, opt out of facial recognition and put the kibosh on ads served up based on your online activity. For more on how to protect your Facebook data, see Take Steps to Protect Your Facebook Data.

On the AwardWallet app or at www.awardwallet.com, enter your log-in information for each account, including credit cards, retail stores, hotels, airlines and other travel carriers. (With Delta Air Lines, United Airlines or Southwest Airlines, you can only have e-mail statements from the programs automatically forwarded to AwardWallet.) You can view your points or miles balance for each program at a glance on the Accounts screen. AwardWallet alerts you when rewards are about to expire or when balances change.

A credit freeze, which blocks new lenders from viewing your credit reports, is the most effective way to prevent thieves from opening new credit accounts in your name. And by September 21, the credit agencies must allow you to place and lift a freeze free. You have to contact each agency to set up a freeze; for step-by-step instructions, see Freeze Your Credit in 3 Steps.

Now that its merger with Time Warner is complete, AT&T is offering unlimited wireless plans that include free access to more than 30 channels of live TV, including CNN, TBS and AMC, as well as 15,000 shows and movies on demand. Customers with other wireless plans can pay for the service, called WatchTV, for $15 a month, which makes it the cheapest streaming service available.

If web pages load at a crawl and videos keep buffering, measure your internet connection’s download and upload speeds at www.speedtest.net. If you aren’t getting the speed you pay for, contact your service provider to troubleshoot the connection. While you’re on the line, ask whether you qualify for any promotional deals.

End the frustrating cycle of resetting forgotten passwords—and foil ID thieves—by setting up a password manager, such as LastPass. The service will help you create strong, unique passwords for each account, then store them behind a single, ultra-secure master password. When you’re browsing the web, LastPass will automatically fill in your credentials. The service’s free version works across multiple devices, but the premium offering ($24 a year) adds multifactor authentication and 1 gigabyte of encrypted storage.

Sign into accounts that you no longer use (check old e-mail messages to jog your memory), then visit AccountKiller.com and Backgroundchecks.org for instructions on how to remove accounts from popular sites, including AOL, Facebook, HotMail and MySpace.

To protect your photos and videos from hackers, a virus, a technical glitch or other mishap, redundancy is key. Keep photos on your phone or PC if you’d like, but store backup copies on an external hard drive or “gold” quality CDs—as well as in the cloud with a service such as Google Drive or iCloud Drive. If you use your smartphone to snap pictures that you don’t want to lose, check your phone’s settings to make sure you’ve scheduled automatic cloud backups that include your images.

Instead of spending $10 to $15 a month to rent an all-in-one modem and router from your internet service provider, buy your own setup. You’ll generally spend $100 to $200 and recoup the cost in one to two years. Look for a combination modem and router that’s on your provider’s list of approved devices (usually on its website). After setting up your new device, contact your internet provider and ask how to return the modem and router you rented.

Start by checking the property record card at your assessor’s office, which may be available online. If you find an obvious error, such as the wrong number of bathrooms, your assessor may agree to reduce your assessment—and your tax bill—immediately. If there isn’t an obvious error but you still believe your assessed value is too high, you can appeal. The process typically takes a couple of months, and you’ll need evidence to back up your case, such as data on comparable properties. But a lower assessment is worth the effort, especially if you live in an area with high property taxes.

Try an online home energy audit, such as the Home Energy Saver, developed by the Lawrence Berkeley National Laboratory. Provide your zip code and answer questions about your home—its features, heating and cooling system, appliances, and lighting—and current energy costs. You’ll receive recommendations for making home energy upgrades that are ranked by payback time.

Use your smartphone to photograph every room in your home, as well as the contents of closets and drawers, then upload the photos for safekeeping with the free UPHelp Home Inventory App, developed by consumer advocate United Policyholders. You’ll have a visual record of your belongings to jog your memory if you have to itemize possessions for an insurance claim. You can also add detailed information, such as receipts, appraisals and serial numbers.

Plug your address into the Solar Calculator at www.energysage.com and it will use a satellite view of your roof and property to estimate your potential savings and break-even point for installing a solar power system. (The actual results will vary with your roof’s characteristics and the hardware and financing that you choose.) You can also get competing, apples-to-apples estimates from participating local solar installers.

Visit SavingforCollege.com and use the World’s Simplest College Cost Calculator to estimate the future cost of a private or public college or a specific school. Enter your child’s age, the type of college, your income and your current savings. The calculator estimates the grants and scholarships your future student will receive and shows the gap between the cost of attendance and your current savings. Revise your monthly savings goal to see how saving more will help close the gap.

If your state offers a tax deduction for 529 contributions, it generally makes sense to invest in your state’s plan. But if your state doesn’t offer a tax break—or you live in Arizona, Kansas, Missouri, Montana or Pennsylvania, which offer a tax break no matter where you invest—look for a plan with no or low annual maintenance fees and an array of investment choices with low expenses, such as New York’s 529 College Savings Program. Contributions will grow tax-free, and the earnings escape tax completely if you use the withdrawals for qualified education expenses.

The Free Application for Federal Student Aid is the ticket to financial aid for college, and filing season begins October 1 for the 2019–20 academic year. To apply, go to FAFSA.gov. You’ll need your 2017 tax return and other financial information.

To pick a federal student-loan repayment plan that fits your budget, visit Studentloans.gov and click on “Use the Repayment Estimator.” Enter the balance and interest rates of each of your federal loans and your income information to see what your monthly payments would be for each repayment plan. The longer the repayment period, the more you will pay in interest, so you’ll usually want to pick the plan with the highest payment you can afford.

Even if you’re years from retirement, registering yourself with Social Security will prevent identity thieves from creating a fraudulent account and applying for benefits in your name. In addition, you can make sure your earnings record, which is used to calculate your benefits, is accurate.

If you’ve put a credit freeze on your credit records, you’ll need to lift the freeze before you apply online, because Social Security uses your credit reports to confirm your identity. Or you can apply in person at a Social Security office.

You contribute after-tax money, which grows tax-free, and withdrawals in retirement are tax-free, too. A Roth is a great idea for young workers and kids with part-time or summer jobs because the longer investments in the account grow, the bigger the tax advantage. You can contribute up to the amount of your earnings from work, or a maximum of $5,500 for 2018 (or $6,500 if you’re 50 or older), as long as your modified adjusted gross income is less than $135,000 for singles or $199,000 for married joint filers. Fidelity and TD Ameritrade offer Roth accounts with no minimum investment or maintenance fees. (For a minor child, you’ll need to open a custodial Roth account.) Charles Schwab has a $100 minimum investment for a custodial IRA but no maintenance fees.

You can put in up to $18,500 in 2018 ($24,500 if you’re 50 or older), plus as much as 20% of your net self-employment income, up to a total of $55,000 (or $61,000 if you are 50 or older)—or the amount of freelance income for the year, whichever is less. Your contributions are tax-deductible, and they grow tax-deferred until you take withdrawals in retirement. Fidelity, Schwab and several other financial institutions offer low-cost solo 401(k)s.

Run your numbers at www.immediateannuities.com. The site can calculate the income you’d receive from a lump sum or what you’d have to invest to get the income you need.

You can get a breakdown of the fees you pay by using Ameritrade’s free 401(k) Fee Analyzer. You’ll need to type in your fund information or provide your 401(k) account login credentials to allow read-only access to your account.

It’s a good idea to reshop your coverage every few years, especially if you are adding teen drivers or have major life changes, such as retirement. Ask your insurer or agent for a list of discounts, and make sure you’re getting all the breaks you deserve. See if you can reduce your rate some more by bundling auto with home or renters insurance, signing up for a data-tracking program or taking a defensive-driving course. Raising your deductible to $500 or $1,000 will trim your premiums and deter you from filing small claims that could lead to a rate hike.

See whether the coverage in your policy has kept up with the cost of labor and materials so you’ll be able to rebuild your home and replace your possessions should disaster strike. The insurer should calculate the rebuilding cost based on the square footage of your home and the current, local per-square-foot cost to rebuild. Mention any home improvements that might boost the replacement cost. Ask about gaps in coverage you could fill—such as by adding an inexpensive sewage backup rider or getting special coverage for valuables.

Question: Recently my credit score dropped from “exceptional” to “very good.” I put a security freeze on all of my credit reports, and I closed out an auto loan around the same time. Did either of those actions cause my score to drop?

Answer: Neither of those actions is likely to have had an effect on your scores, says credit expert John Ulzheimer, formerly of credit-scoring company FICO and credit bureau Equifax. He advises people to stop worrying about minor changes in credit scores. “There’s a natural migration to your scores, normally 20 to 25 points month over month,” he says. “Your scores should stay within that range and, if so, it means your scores are moving in a normal, healthy manner.”

A credit freeze doesn’t hurt your credit scores, says Ulzheimer. “Security freezes simply restrict access to your credit reports to existing creditors” plus a handful of other parties such as government agencies and collection agencies, he says. “But the scoring systems are still able to see all of your information during the scoring process.” A freeze can help protect you from identity theft, but it can also make some things more complicated—such as applying for insurance or opening a bank account. (See the related article Pitfalls of Freezing Your Credit).

Also, paying off an auto loan doesn’t cause a score to drop, Ulzheimer says. But, he points out, it isn’t likely to help your scores, either, because installment debt has only a small impact on your scores.

Ulzheimer says that small score changes often stem from fluctuations in credit card balances, which cause your debt-to-credit ratios to rise and fall. Nearly 30% of your FICO score (the credit score most lenders use) is based on amounts you owe. Keep an eye on your credit utilization ratio, which is the percentage of available revolving-account credit you’re using. If the total credit limit for all of your credit cards together is $20,000 and you’ve charged $2,000, for example, your utilization ratio is 10%.

Even if you pay the full credit card balance by the payment due date, your utilization ratio won’t necessarily be zero because the ratio is based on the balance your lender reported to the credit bureau—which is usually the balance from your monthly statement. It helps to keep your utilization ratio particularly low for a month or two before you apply for a loan, either by charging very little or by making sure to pay off your balances before they’re reported to the credit bureau. For more information, see the Amounts Owed explanation at MyFico.com.

For more information about credit scores, see How Your Credit Score Is Calculated and MyFico’s credit basics page.