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5 Ways to Spot a Student Loan Scam

“I LOVE my student loan debt,” said no one, ever. Not only can student loan repayment be difficult to understand, it can crush your budget, and whenever there’s confusion and desperation, there’s someone trying to make money off it.

There are a handful of legitimate ways you can make your student loan payments more affordable, but it’s very likely you’ll come across student loan scams if you’re researching repayment options. These scams vary widely — some are looking to steal your personal or financial information, while others are trying to profit from high fees or misleading claims. Here are some red flags you need to watch out for.

1. It’s Too Good to Be True

The age-old scam identifier holds true for student loans: If it’s too good to be true, it is. Some common scams include terms like “instant forgiveness” or that you’re “pre-qualified” for lower loan payments, said Matt Ribe, senior director of legislative affairs and corporate secretary for the National Foundation for Credit Counseling. A company can’t know if you’re qualified for federal student loan programs like income-based repayment (IBR) or public service student loan forgiveness unless they’ve assessed your student loans and your personal financial situation. Ribe said to watch out for any broad, blanket guarantees that a company can get you a particular outcome — it’s really not that simple.

2. They Charge High, Upfront Fees

It doesn’t cost anything to apply for federal repayment or forgiveness programs (IBR, public service student loan forgiveness, revised Pay As You Earn aka RePAYE, etc.). You can do that through your student loan servicer (talking to your servicer is always free, too).

There are a lot of companies out there that charge fees for helping you apply for such programs.

“We pay people to fix our cars and prepare our taxes all the time; there’s nothing inherently wrong about that,” Ribe said. “It’s the misleading advertising that really irks consumer protection folks and the Department of Education, for sure.”

Joshua R.I. Cohen, a student loan lawyer in Vermont and Connecticut, said he’s seen student loan scams offer consumers “relief” and charge upfront fees between about $300 to $2,000. The company may not clearly explain what the fees are for — people often confuse monthly maintenance fees with their actual student loan payments — or they might just take your money and run. Your loans may not even qualify for a federal repayment program (private student loans don’t), but they’ll charge you a consulting fee anyway.

3. They Say ‘You Have To’

Any company that demands a specific form of payment (often paired with high-pressure sales tactics like, “This offer will expire at the end of the year!”), should make you suspicious, Cohen said.

You’ll also want to be wary of an offer that tells you how you should handle your loans, because it’s up to you to decide what makes most sense for your finances. For example, you generally do not need to consolidate your loans to qualify for IBR (except for Federal Perkins Loans, which must be consolidated to qualify for IBR).

“The scam company doesn’t say why you need to consolidate they just say, ‘Oh you need to do this,'” Cohen said.

4. ‘The New Obama Student Loan Relief Program’

Both Cohen and Ribe cited this one. You may have even seen ads for it online.

They say something like, “‘By consolidating you can qualify for the Obama Loan Forgiveness Program’ — there is no Obama Loan Forgiveness Program,” Cohen said.

Falling for this one may mean you pay a fee or you end up “consolidating” into a loan with murky terms and a high interest rate — all for a program that doesn’t exist.

Also watch out for companies claiming to be affiliated with the government or the Education Department — only student loan servicers and debt collectors work directly with the government.

5. They Want to Take Control of Your Loan

Cohen and Ribe said there’s no reason to pay your loan through a third party. Scam companies have been known to ask for your Federal Student Aid ID (FSA ID) or your National Student Loan Data System (NSLDS) PIN. This is personally identifying information that can allow a third party to take control of your loan.

“You don’t know what the company is actually doing, (or) if they’re actually forwarding the money onto the servicer,” Ribe said. The company may also change your contact information on your student loans, so you won’t know if you miss payments or default.

Why You Need to Be Careful With Student Loan Repayment

Paying your student loans on time can help you build credit, but if you fall behind or don’t understand how repayment works, you could end up with some serious credit and general financial problems. You can learn what happens exactly after you default on your student loans here. 

If you ever have questions about your student loan payments, you can ask your student loan servicer for guidance. The Education Department, the Consumer Financial Protection Bureau and local consumer advocates (like a student loan lawyer or a non-profit credit counselor) are also good sources.

Got more questions about paying for college post-graduation? Visit our student loan learning center.

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This article originally appeared on Credit.com.

Millennials, Have Presidents Day Off? Get Your Investing Game Started

If you’ve got Monday off for Presidents Day, you may choose to spend it binge-watching “The OA” or brunching with your crew. But it would be smart to set aside a little time to give your finances the presidential treatment.

Not sure how to invest in your 20s or finally get that budget started? Here are some steps to take.

Bring spending under control

Overspending is one of the most common complaints about government; the powers that be are in a constant battle over how to keep the nation’s budget in check. Overspending plagues average Americans, too, especially with credit cards and the all-too-simple ways to use them (ahem, Amazon Prime). But if you are regularly living beyond your means, it’s a recipe for debt and disaster.

To start getting on track, write down all of your monthly income, including your day job and side hustles. Then write down all of your required monthly obligations: debt payments, groceries, bills, transportation costs and so on. If your expenses add up to more than your income, you’ve got to find ways to cut costs so you don’t accrue debt.

If you’re lucky, you’ll have a monthly surplus. Aim to designate a percentage of that extra cash for saving or investing, and consider setting up automatic transfers to savings or brokerage accounts each month. The remainder can be discretionary income for things like Netflix, nights out and Uber rides.

Get serious about retirement

Even presidents have to retire someday. Starting to save for retirement now can be challenging if you have huge student loans or rent payments. But the sooner you start, the more you’ll benefit later, thanks to compounding returns.

If you already have a retirement account, see whether you can afford to increase your contribution. Not there yet? If your employer has a 401(k), sign up to automatically contribute a percentage of your paycheck each month — especially if there’s an employer match, which gives you free money. Contributions are also pretax, which gives you the benefit of lowering your amount of taxable income.

If a 401(k) isn’t an option, consider opening a Roth IRA. In this retirement account, you contribute money after it’s been taxed. The money then grows, and you can withdraw it tax-free once you reach 59½.

Invest in your future

Presidents must make tough decisions, balancing what might be popular now and what might be best long term. You can look at your own investing the same way. Taking money that could be used on fun or immediate needs and putting it in the market may feel boring and unsatisfying. But investing even small amounts in nonretirement accounts can generate more returns than a savings account and help you buy a house or send your kids to college years from now.

Index funds and exchange-traded funds are excellent choices for new investors. They’re essentially a basket of various stocks and other investments that will diversify your portfolio and provide less risk than individual stocks. They also usually have relatively low fees. If you’re a newbie, learn more about how to invest in stocks before you get started.

Enjoy your day off, but don’t miss out on the chance to evaluate your finances and set yourself up for a more stable future.

Emily Starbuck Crone is a staff writer at NerdWallet, a personal finance website. Email: emily.crone@nerdwallet.com.

The Most Dangerous Places to Cross the Street

Crossing the street can seem like such a simple thing. But there was some logic behind Mom telling you to look both ways first — an average of 13 people are struck and killed by a car while walking every day, according to the fourth edition of the Dangerous by Design report.

That same report (issued by Smart Growth America’s program National Complete Streets Coalition) found that between 2005 and 2014, Americans were 7.2 times more likely to die as a pedestrian than if they were in a natural disaster. Probably not what you’d expect, right?

There were 46,149 pedestrian deaths nationally during the decade analyzed. While the number of pedestrian deaths each year are higher in big cities like New York City and Los Angeles, when adjusted for things like population and the number of people who commute by foot on a regular basis, these two cities (nor the states they’re in) didn’t even break into the top 20.

The report looked at the 104 largest metro areas in the U.S., as well as all 50 states, using a Pedestrian Danger Index with data from the time period we mentioned earlier. This Index used the most recent U.S. Census data to establish the pedestrian data, the American Community Survey for population numbers and Fatality Analysis Reporting System data. The trends were calculated using at least a 90% confidence interval.

Based on this information, these are the 20 states where you may want to look both ways a second or third time before crossing the street (or maybe let the chicken go first just to make sure it gets to the other side).

20. New Jersey

Pedestrian Danger Index: 56.1

Total Pedestrian Deaths: 1,493

19. Missouri

Pedestrian Danger Index: 60.2

Total Pedestrian Deaths: 726

18. Michigan

Pedestrian Danger Index: 61

Total Pedestrian Deaths: 1,328

17. California

Pedestrian Danger Index: 64.4

Total Pedestrian Deaths: 6,616

16. Oklahoma

Pedestrian Danger Index: 76.1

Total Pedestrian Deaths: 523

15. Maryland

Pedestrian Danger Index: 77.8

Total Pedestrian Deaths: 1,053

14. Arkansas

Pedestrian Danger Index: 80.6

Total Pedestrian Deaths: 404

13. Tennessee

Pedestrian Danger Index: 90.5

Total Pedestrian Deaths: 759

12. Nevada

Pedestrian Danger Index: 91.2

Total Pedestrian Deaths: 529

11. North Carolina

Pedestrian Danger Index: 96.3

Total Pedestrian Deaths: 1,690

You can find the full list of the most dangerous places to cross the street on Credit.com

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This article originally appeared on Credit.com.

4 Tips to Help You Audit Your Personal Spending

It’s tax season, and many of us dread the thought of what we may end up owing Uncle Sam. I, on the other hand, take it as an opportunity to do my annual financial audit—and save hundreds — if not thousands — of dollars a year.

What is a financial audit? A financial audit, as I define it, is the practice of going through your personal financial records and checking your ongoing monthly expenses, unexpected one-time expenses, splurges, and anything else that is money-related.

When I audit myself, I am taking a cold, hard look at spending patterns, higher-than-expected payments, services that I’m paying for but don’t use, late payments (and why they are late), and any other financial habits that are keeping me from financial success.

One of the most interesting parts of my audits is realizing how easy it is to lose track of monthly subscriptions. In a previous audit, I discovered that I paid $400 for a service that I didn’t use for an entire year! I now try to avoid monthly subscriptions whenever possible. I save my money and pay upfront for whatever service I would like to use.

Here’s how I do my self-audit.

1. Stay Focused

First, this is not to be done on an empty stomach or after more than one drink. You need to be alert. Do it midday, when you’re awake and ready to tackle your finances. Do this at home during the quietest part of your day, and if you have kiddos or pets, I would recommend doing this when they are out of the house.

The fewer distractions, the better.

2. Analyze Your Spending

You will want to look at your bank statements or financial management systems such as Mint, Personal Capital or even monthly Excel spreadsheets using a secured online system.

Then you should spend time looking at the different areas of spending that your money is going toward: groceries, car expenses, kids, travel, debt repayments, and even pets.

In my case, I discovered that I spent a lot on food, travel and debt repayment. Once I discovered where my money was going, I started to think creatively about how to lower expenses in those different categories.

3. Strategize

For example, when I began this process I was spending twice the amount that I currently do on groceries and eating out. So I started shopping for groceries once a week and I downloaded a grocery app that allowed me to save money each time I purchased food.

I don’t feel like I’m missing out on going out to eat or having my favorite foods — I’ve just embraced some new strategies so that I don’t eat my money up!

4. Uncover Savings

I decided to embrace traveling less, and when I did travel, I looked at ways to make travel less expensive. I very rarely stay at hotels and prefer to use Airbnb and hostels (with my own private room) because those accommodation options are much less expensive — they cost around $30 a night versus $80 to $150 a night in a hotel.

I still travel to cool places — this year I spent two weeks in San Diego, and the year before that I spent two months in Australia. But now I work hard on figuring out my expenses before I do anything, and I pay with cash.

You don’t do a financial audit to give yourself a hard time — in fact, just the opposite. Financial audits are great because they give you clarity and a direction for what your next steps should be.

During one of those audits, I discovered that I was spending $1,200 a year (around $105 a month) on my cell phone service. But I don’t like to talk on the phone all that much. Not to mention, $1,200 a year is the equivalent of a trip to South America for three weeks with airfare! I side-hustled like a rock star and paid up to get out of my contract, and then I switched to a pay-as-you-go service that averaged me around $30 a month. This created a savings of $900 a year. Cha-ching!

If this is the first time that you’ve done a financial audit, don’t be scared! Just have fun putting money back into your pocket.

[Editor’s Note: Remember, it’s important to keep an eye on your credit, too, since your standing can affect your ability to score an affordable loan. You can view two of your free credit scores, updated every 14 days, on Credit.com.]

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This article originally appeared on Credit.com.

How a Balance Transfer Affects Your Credit Score

If you’re struggling with credit card debt that you just can’t seem to get out from under, one of the best ways to break free from that debt is to use a 0% balance transfer card. Doing so saves you money in the long run since you won’t be paying interest charges while you work on paying down that balance.

What You Need to Know

First, applying for a new credit card of any kind can end up dinging your credit just a little. That’s because credit card issuers do what’s known as a “hard inquiry” to determine if you qualify for their product. That check of your credit can have a small and temporary effect on your credit scores, but it’s typically more than offset when you’re approved for the new card because your credit utilization improves with the new line of credit. And as soon as you start whittling away at your outstanding debt with your new balance transfer card, your credit is likely to improve even more. (If you don’t know where your credit currently stands, you can get your two free credit scores, updated every 14 days, on Credit.com.)

The five big factors in determining your credit score include your credit utilization, payment history, types of credit, credit inquiries and the age of your accounts. Here’s an explanation of each and how they are potentially affected when you apply for and use a balance transfer credit card:

The 5 Components of Your Credit Score

1. Credit Utilization What it Is: This is basically the amount your currently owe on your revolving credit accounts, and makes up 30% of your total score. If you keep your balances to less than a 30% of your limit, and preferably 10%, you’ll be doing your credit scores a huge favor. How it’s Affected: Suppose you owe $10,000 on Card A, which has a limit of $12,000. You’re using 83% of your available credit. But now you open Card B and move all $10,000 onto it (it has a limit of $10,000). You are now using a total combined available credit of 45% (a combined $22,000 on both cards). The new lower credit utilization could help boost your credit score.

2. Payment History What it Is: This is the most important part of your credit scores and counts for 35% of your total. That’s why it’s so important to make your payments on time and avoid having your accounts go into collections at all costs. How it’s Affected: If you made regular, on-time payments on the old card, and continue to make regular, on-time payments on the new card, you shouldn’t see any change here.

3. Types of Credit What it Is: This is worth 10% of your score and in this area, diversity is key, so having a good mix of credit cards, auto loans, mortgage loans and even personal loans will help give you a good score. How it’s Affected: Since you probably already have a credit card if you’re looking to transfer a balance to a new card, you likely won’t see much, if any, difference here.

4. Credit Inquiries. What it Is: This area makes up 10% of your credit scores. Too many credit inquires at the same time can drop your score. How it’s Affected: Applying for a new card will put an inquiry on your credit. As long as you’re not applying for multiple cards, a single inquiry will have a very small effect.  Probably only dropping your score by less than 5 points.

5. Age of Credit What it Is: The longer you have been responsibly using credit, the better your score in this area. It accounts for 15% of your total score. How it’s Affected: Once you get your new card, hang on to your old one. Don’t cancel it. Here’s why: You want to keep your oldest cards open so that your active credit has as long a history as possible. Plus, if you close the old card, you won’t get the benefit of a score boost in your credit utilization, as explained above.

Your Credit & Balance Transfer Cards: The Bottom Line

Opening a new account and transferring the balance over should save you money in the long run, and have a positive impact on your credit score — so long as you don’t transfer your old balance and then turn right away and charge up a new one. Don’t expect a huge jump at the very beginning, but as you continue to pay down your balance by making timely payments, you should see some incremental improvement.

But is a balance transfer right for you? There’s no one-size-fits-all answer here. It depends on the size of your debt, the interest rate, your income, your current credit score, and how soon you think you can wipe out your debt.

Some of the credit cards with the longest 0% introductory APR offers on balance transfers include:

  • The Citi Diamond Preferred leads the pack with 21 months interest-free financing for balance transfers and purchases.
  • The Discover it card, also offers 21 months interest-free financing on balance transfers and six months for purchases
  • The Citi Double Cash card offers 18 months interest-free financing on balance transfers
  • The Chase Slate card offers 15 months interest-free financing, plus no transfer fee if you transfer your balance within 60 days of approval

One consideration is whether you can pay off your debt during the 0% introductory APR period. If you feel your debt is too big to pay off in 15, 18 or even 21 months or you’re worried about running up a balance on both cards, you could consider taking out a personal loan to pay it off. You won’t get the 0% interest offer, but you will likely get a significantly lower overall interest rate than the credit card will offer after the introductory period ends and you’ll have a set date that your debt will be paid off by. (You can learn more about getting an unsecured personal loan here.)

Whatever decision you make, you can rest assured that applying for an using a balance transfer credit card won’t severely damage your credit so long as it used it as intended. And, if used properly, there’s a very good chance your credit score will improve.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

 

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This article originally appeared on Credit.com.

6 Solid Tips for Veterans in Need of a Loan

U.S. military members transitioning out of service can find themselves facing many unique money challenges. After all, duty to one’s country can understandably push personal money management to the back burner. Fortunately, there are steps veterans can take to secure the funding they need to achieve their financial goals.

Here are some tips for veterans looking to secure a mortgage, small business loan or other types of financing.

1. Know What Federal Benefits Are Available …

There are programs out there designed to help veterans and their families overcome the various money challenges that can arise when a family member is on active duty. For instance, veterans are eligible for VA home loans, which often feature no down payment, no mortgage insurance and flexible underwriting requirements. And there are various grants, loans and business development programs backed by the U.S. Small Business Administration that can help former military members and budding entrepreneurs.

Veterans can get acquainted with the general benefits available to them on the Veterans Benefits Administration website. Prospective entrepreneurs can begin looking into business financing by checking out the Small Business Administration’s Office of Veterans Business Development online.

2. Research All of Your Options

That’s not to say veterans should limit themselves to federal loan programs. For instance, when it comes to mortgages, “to be sure, VA loans aren’t the right fit for every veteran,” Chris Birk, a Credit.com contributor and director of education for Veterans United, a VA loan lender, said. “Understanding all of your mortgage options is also key to getting the best deal possible. Even veterans with sterling credit and a 20% down payment would benefit from comparison shopping between conventional and VA loans.”

3. Consider Financial Institutions That Cater to Vets …

If you do decide to go for a VA loan to buy a home, consider finding a mortgage lender who knows the ins and outs of that type of financing.

“VA loan market share has soared over the last decade, but it’s still a niche product for many lenders and real estate professionals,” Birk said. “Working with companies and professionals who know the ins and outs of VA loans can help ensure veterans get the most from this benefit.”

Similarly, you can look into finding a credit card issuer or bank that caters to former and current military members. (We’ve got a list of some of the better military credit cards here to help you kick off your search.)

And there are several startups, venture capitalist funds and, even, angel investors out there that offer small business financing exclusively to veterans and military members that may prove worthwhile, depending on your financial situation.

4. … But Be Sure to Assess Your Finances Holistically

We say “depending on your financial situation” because it’s important to consider factors beyond your status as a veteran when making money decisions. Take credit cards as an example. Ultimately, the right one for you will be influenced by your current financial situation or goals. For instance, if you’re trying to pay a lot of debt, you might want to look into a balance-transfer credit card. 

The same thing applies when exploring other financing opportunities — just because you’re a veteran doesn’t mean products designed for veterans are going to be the ones that best need your financing needs.

5. Watch Out for Scams

Due to the money challenges some veterans face (often related to spending extended periods of time out of the country or relocating frequently), they often find themselves on a scammer’s radar. That’s why it’s a good idea to vet any business you’re thinking of getting a loan from before filling out applications. You can start by conducting a thorough search online or checking a company’s status with the Better Business Bureau.

6. Brush Up Your Credit

A good credit score can make all types of financing more affordable, so it’s a good idea to see where you stand before applying for a loan. You can get a free credit report snapshot, along with two free credit scores, updated every 14 days, on Credit.com. You can also pull your full credit reports from each of the major consumer credit reporting agencies for free each year at AnnualCreditReport.com. 

If you need to build credit, you can look into credit-builder loans or secured credit cards, which help people with thin files establish a history of using credit wisely. If you need to improve your credit, you can focus on paying down high credit card balances, disputing credit report errors and limiting applications for new credit, all of which can hurt your credit score.

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This article originally appeared on Credit.com.

7 Ways to Save at Home Depot

If you work in the home improvement field or love do-it-yourself projects, there’s a good chance you’ve spent some significant time and money at Home Depot, one of the country’s largest suppliers of home improvement merchandise. But enthusiastic Home Depot shoppers know that, even after hunting down great deals, the bill can quickly spiral out of control at the register.

Luckily, there are many tricks that can save you a lot at Home Depot. Here are seven ways you can cut costs on your next expedition. 

1. Discounted Gift Cards 

Websites like Cardpool.com and Raise.com provide discounted Home Depot gift cards that save you a percentage of the total gift card value. For instance, as of writing this, Raise.com had gift cards discounted with up to 5.1% off their total value. 

2. Hunt for Coupons & Deal Alerts

You can look out for Home Depot flyers and coupons in your mailbox or in the store, but you can also get alerted to special promotions, deals and offers by signing up for Home Depot’s email or text alerts. Signing up right now will also get you $5 off your next purchase of $50 or more. 

3. Work the Low-Price Guarantee 

Home Depot offers a low-price guarantee for both online and in-store purchases. For online purchases, Home Depot will match any competitor price, including the item price and shipping costs. For in-store purchases, Home Depot will beat competitor prices on identical items by 10%. You’ll have to bring the ad, printout or photo to the cash register when you check out. Several exclusions apply to this policy, including custom products, open-box merchandise and auction pricing. 

4. Rent Equipment 

For equipment you’ll only use once or twice, you might want to evaluate the cost of renting versus buying. Many items can be rented on an hourly, daily or weekly basis at a fraction of the cost. For instance, we found a $188 leaf blower that can be rented for $23 a day. If you only need to blow leaves once a year, this can be a much more cost-effective option. 

5. Visit the Clearance Section

Many Home Depot locations have clearance sections located throughout the store (although they can sometimes be hard to find). Check out the far reaches of the store for deeply discounted items. 

6. Consider a Home Depot Credit Card

Home Depot offers a credit card (we’ve got a full review here) to help their customers finance home improvement projects. Home Depot is currently offering an introductory 0% annual percentage rate (APR) for all purchases of $299 or more if you pay off your balance in six months. They also offer cardholders up to 24 months of interest-free financing for special categories such as roofing supplies or custom kitchen cabinets.

If you were already planning on charging your Home Depot purchases to a credit card, you could avoid interest by taking advantage of these offers (although you can also avoid interest by paying off your balance in full each month).

Remember, before applying for any credit card, it’s a good idea to check your credit scores to see where you stand. You can get your two free credit scores, updated every 14 days, right here on Credit.com.

7. Join the Garden Club 

Avid gardeners should take a look at the Home Depot Garden Club, an email and text alert club that delivers special garden promotions and offers right to your inbox or mobile device. Plus, Home Depot is currently offering $5 off your next purchase of $50 or more when you sign up.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly. Related Articles

This article originally appeared on Credit.com.

Sean Talks Money: How to Give Your Child Excellent Credit

My sister Megan called me recently asking for advice on picking a new credit card. Because she’s a college student and only 19, I assumed she’d qualify only for a student or secured credit card, so I spent 10 minutes talking her ear off about those options before I bothered asking whether she knew what her credit score was.

Her answer? 778, well into the “excellent credit” range many top-tier credit cards require. I was floored. My baby sister’s credit score was only 20 points lower than my own, despite my having a regular job, bill pay history and quite a few credit accounts to my name.

After some digging, I learned that my parents had basically gifted her near-perfect credit by the time she graduated high school. Here’s how they did it and how you can try to do the same for your kids.

How it happened

Looking at Megan’s credit score dashboard at NerdWallet reveals some interesting stats:

  • The oldest credit card on her report is older than she is, at 23 years and 7 months.
  • The average age of her accounts is 7 years and 2 months. (Seven years ago, my sister was 12.)
  • 12 open accounts.
  • An unblemished payment history.
  • Over $100,000 credit line.
  • Four hard inquiries in the past year, which is above average, suggesting that her score could rise even further once the impact of those “hard pulls” dissipates.

»MORE: Understand your credit score

Those stats aren’t errors. They just reflect the potential power of “authorized user” status.

My parents didn’t have a master plan when they added Megan as an authorized user of their cards. They did so simply because giving her direct access to their cards was easier than giving her cash when she went on school trips, attended dance camps, or just stepped out for gas or groceries.

Fortunately for Megan, my parents have had many years of impeccable credit hygiene, and she automatically gained that same benefit as an authorized user of their cards. As a result, my sister has amazing credit, even though the longest-serving card she herself owns is just 1 year and 5 months old.

“The first time I found out my credit score was when I applied for an apartment and they requested my credit information,” Megan told me. “I remember sitting at the desk in my dorm room, and once I found out, I immediately called my mom and then I ran around and told all of my roommates. Sadly they didn’t share the excitement since they had no idea what a credit score was.”

Should you do this for your children?

This may sound odd, but you can add your children of any age as authorized users on your credit cards. Here are the caveats you should keep in mind:

  • The authorized user approach makes sense only if you can add your children to a card in good standing, meaning you’re paying the bills on time and keeping the balance low. Any mistakes you make on your card, such as missing a bill or charging a high percentage of your credit limit, would damage your children’s credit score.
  • If you’re concerned about what your children might do with access to your credit line, then simply don’t give them the actual cards. Add your children as authorized users and then — when the mail comes — shred the cards or bury them in your sock drawer. Your children will get the credit benefit regardless of whether their card is ever used; the credit bureaus don’t know the difference.
  • FICO and VantageScore, the two biggest credit scoring companies in the U.S., aren’t enamored of the idea of credit piggybacking. They’re working on newer versions of their credit-scoring algorithms to lessen the positive impact of being an authorized user, so your children may not benefit as much as my sister did. That said, lenders tend to be rather slow to adopt the newer credit scoring algorithms, so this may not have much real-world impact for a while.
  • If you trust your children with access to your money, you’ll also need to trust that they’ll protect your credit card information. Make sure they know credit card security basics, like to use it only at reputable websites and businesses, and to never leave cards lying around in public sight.

My mom, Kristen, has some additional advice: “Make sure your child understands the importance of credit and that it isn’t free money. They can go and buy something on credit and it be pretty easy, but they have to understand that the charge has to be paid.”

If you have a card with solid payment history, consider adding your children as authorized users. It can help them build their credit and learn other financial skills that will serve them well when they’re no longer under your roof.

Sean McQuay is a credit and banking expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards and banking products more effectively. If you have a question, shoot him an email at asksean@nerdwallet.com. The answer might show up in a future column.

Online Medicine: What to Know Before You Sign Up

By Cheryl Welch

Learn more about Cheryl on Nerdwallet’s Ask an Advisor

The world of health care is changing rapidly thanks to new advances in technology. Innovations such as patient portals and telemedicine allow patients and doctors to connect in new ways. However, there are pros and cons to both services.

Patient portals

Medical practices across the country are rolling out patient portals, which are secure websites where patients can view, download and share their health information, including blood work and lab results. They can also contact staff and doctors via a messaging system and request medical records, prescription refills and appointments — all 24/7.

Mary*, an RN in New York, loves using patient portals. She typically works overnight shifts and isn’t awake during normal business hours, so the service allows her to take care of medical tasks when it’s convenient. For example, she receives an appointment time within three days of requesting one via the portal.

Still, other patients, even the most technologically savvy, find these portals to be unfriendly. And some note that some portals aren’t mobile friendly, limiting their usefulness for patients on the go. They can also come with hidden costs. Another client, Ashley, was offered access to a free patient portal and told to email her child’s pediatrician with any questions — but later received bills for $50 per email.

Telemedicine

Some medical practitioners also offer telemedicine, or patient appointments via telecommunications technologies such as Skype. This service increases access to medical care in underserved regions and remote areas. It can also cut down on costs associated with traditional health care.

It’s a new process, but some states — including New York — already require insurance companies to cover telemedicine as they would in-office services. But doctors don’t necessarily advertise this to their patients. Visits can cost as little as $25 and help patients avoid in-person visits for routine ailments, but many don’t know they have the option.

Patient portals and telemedicine can benefit both patients and medical personnel, but doctors should do a better job of making both user-friendly, cost-effective experiences and publicizing their availability. In the meantime, patients should ask their practitioners and insurers about online medical services, including the costs involved, before diving in.

*Names have been changed to respect the privacy of the patients interviewed.

Cheryl Welch is the president of Hudson Valley Medical Bill Advocates.

Six Steps To Maximize Your Tax Refund

MoneyTips

Does your preparation for tax day start with a trip to the liquor store, or perhaps a one-way ticket to Costa Rica? Taxes are unpleasant, but drinking or fleeing the country is not the answer. Tackle your taxes head-on with solid preparation, and the experience may turn out to be more pleasant than you thought it would be. Here are a few tips to help you with your tax preparation and increase your chances of getting the biggest refund you deserve. 1. Start Immediately – Procrastination is just going to make things worse. Pressure will increase as tax-filing day draws nearer, and it is more likely that you will have problems finding vital paperwork or will make mistakes filling out your form. Get started on your taxes as early as you can and gather some positive momentum. 2. Organize Your Paperwork – Hopefully you have been storing and organizing important tax documents and necessary receipts throughout the year — but if so, you probably would not be reading an article about how to prepare for tax day. Start by gathering the basic tax documents. Last year's tax return, W-2 forms, 1099-MISC forms for any independent contracting work, other 1099s forms for things like bank accounts and brokerage statements, and 1095 forms to prove health insurance status. After securing all the basic documents, move on to receipts for all itemized deductions. Speaking of deductions.... 3. Explore Deductions – You may not even realize how many itemized tax deductions that you have, and simply assume the standard deduction is the best choice. Review the instructions for Schedule A and IRS Publication 529, "Miscellaneous Deductions" to see all the options available to you. Do not forget about "above-the-line" deductions like educator expenses and health savings account (HSA) deductions. You can take those deductions whether you itemize or not. 4. Max Out Your Retirement Contributions – Even though it is now 2017, you can still make contributions to your IRA until the tax-filing deadline in April and credit those contributions to your 2016 taxes — as long as your contributions for the year stay within the $5,500 limit ($6,500 if you are over fifty years old). Schedule your retirement contributions in a way that brings you the greatest tax advantage. 5. Consider Tax-Preparation Software – Do you prefer to file your own taxes? You may want to consider tax preparation software to see if it can help you avoid potential errors and identify other sources of deductions. Software is available in a wide range of capacities that can match the complexity of your tax situation, and prices are generally reasonable. If you made below $64,000 last year, you can prepare your taxes for free using the Free File tax preparation software available on the IRS website. 6. Seek Professional Assistance – Complex tax situations are best left to the professionals. You may be able to do your own taxes adequately, but a competent tax professional may be able to find you enough refunds to pay for their services and then some — and even if they cannot, you can enjoy greater peace of mind by not having to struggle through the tax forms yourself. Research a tax professional carefully, and do not just choose one based on advertising (certainly not on promises of the highest refunds). Check their certifications, experience, and online reviews of their services. Note that lawyers and accountants may be qualified to sign tax returns without having any experience in doing so. What's that smell? It is the sweet smell of successful preparation for tax day. That sure beats dealing with hangovers, or starting your new life in Central America. Need to file your taxes? Check out this site. Photo ©iStockphoto.com/ideabug

Originally Posted at: https://www.moneytips.com/how-to-maximize-your-tax-refund

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