Don’t let your credit die of neglect

Certified financial planner David Rae says he used to think that “anyone who could draw breath” could get an auto loan. Then one of his millionaire clients tried to buy a car — and failed.

The 42-year-old client was turned down for a loan because he had no credit scores , says Rae, who is based in Los Angeles.

Nineteen million American adults are “unscoreable,” lacking enough recent credit history to generate credit scores, according to the Consumer Financial Protection Bureau. They either have “thin” files, with too few accounts, or “stale” ones that haven’t been updated in a while. In my latest for the Associated Press, find out how having no scores can cost you.

Thursday’s need-to-know money news

Today’s top story: 4 ways to curb your online shopping enthusiasm. Also in the news: 13 last-ditch ways to avoid the poorhouse in retirement, why you should freeze your child’s credit, and 8 inspirational stories of people who overcame debt.

4 Ways to Curb Your Online Shopping Enthusiasm
Back away from the mouse.

13 Last-Ditch Ways to Avoid the Poorhouse in Retirement
There’s still time.

Why You Should Freeze Your Child’s Credit
Identity theft starts early.

8 inspirational stories of people who overcame debt
Learning from those who have been there.

Tuesday’s need-to-know money news

Today’s top story: How bad credit can increase your car costs. Also in the news: Owning Bitcoin creates a complex tax situation, 13 last-ditch ways to avoid the poorhouse in retirement, and the top 7 tax deductions and credits people forget.

Good Driver, Bad Credit: What Makes Your Car Costs So High
It’s not just the monthly payment.

Owning Bitcoin Creates a Complex Tax Situation
Taxing cryptocurrency.

13 Last-Ditch Ways to Avoid the Poorhouse in Retirement
Before it’s too late.

Top 7 Tax Deductions And Credits That People Forget
Leave no deduction behind.

Q&A: Managing debt with credit counseling

Dear Liz: I contacted a company to help me resolve my debt. They present themselves as a nonprofit organization and seem to offer a possible solution by reducing the interest rate I’m paying on my credit cards. How do I determine the trustworthiness of this and other such organizations?

Answer: If the organization is affiliated with the National Foundation for Credit Counseling, then it’s a legitimate credit counseling agency. These agencies offer debt management plans that typically allow people to pay off their credit card debt over three to five years at reduced interest rates. People enrolled in the plans make monthly payments to the counseling agency, which then distributes the money to the creditors. Fees vary by agency, but the cost to set up a plan is typically less than $50 and the monthly fee around $35.

Debt management plans are not loans or debt consolidation. They’re also not a way to settle your debt for less than you owe. They’re a potential solution for people to pay off what they owe over several years.

Credit counseling got a bad name in the 1990s when a bunch of companies masquerading as nonprofits got into the business of offering debt management plans. Many siphoned off money that was meant for creditors or failed to pay creditors at all. The IRS cracked down and cleared out many of the worst offenders.

You can visit www.nfcc.org to see if the agency is listed and to get its contact information. (It’s best to get the information directly from NFCC, just in case you’re dealing with a copycat.)

Before you sign up with a credit counselor, though, you also should consult with a bankruptcy attorney. Credit counselors may try to steer you away from bankruptcy, and you’ll want an attorney to review your situation to help you understand if bankruptcy may be a better option.

Friday’s need-to-know money news

Today’s top story: Seeking smart, funny – and a credit score above 700. Also in the news: Wellness travel helps you tune up or tune out, what you need to know about investing in IPOs, and a major tax mistake to avoid if you have student loans.

Seeking Smart, Funny — and a Credit Score Above 700
Your credit score could impact your dating options.

Wellness Travel Helps You Tune Up or Tune Out
Getting in touch with what matters.

What You Need to Know About Investing in IPOs
Proceed with caution.

Got student loans? Don’t make this major tax mistake
Don’t forget to deduct your interest.

Wednesday’s need-to-know money news

Today’s top story: Love that home’s view? See how much more you’ll pay. Also in the news: 3 months, 3 housing trends, how one woman ditched her debt, and how to get rid of bad marks on your credit report.

Love That Home’s View? See How Much More You’ll Pay
Comes at a cost.

3 Months, 3 Housing Trends: Seller’s Market, Higher Rates, HELOC Comeback
The 2018 housing market so far.

How I Ditched Debt: Tenacious Focus on the Goal
One woman’s triump over debt.

How to Get Rid of Bad Marks on Your Credit Report
Fighting back.

Monday’s need-to-know money news

Today’s top story: How to help your partner’s credit without harming your own. Also in the news: Why Millennials can count on Social Security after all, 3 smart ways to supercharge your travel rewards, and the worst financial mistake a grandparent can make.

Help Your Partner’s Credit — Without Harming Your Own
Start by talking about it.

Millennials Can Count on Social Security After All
Good news!

3 Smart Ways to Supercharge Your Travel Rewards
Spend strategically.

This is the worst financial mistake a grandparent can make
No matter how well-intentioned.

Why you should freeze your child’s credit

For years, identity theft expert Eva Velasquez warned parents that freezing their children’s credit reports was difficult, problematic and probably unnecessary.

Velasquez, chief executive officer of the nonprofit Identity Theft Resource Center, has since changed her mind. Or rather, the sheer volume and severity of database breaches — including last year’s breathtakingly huge compromise at Equifax credit bureau — changed it for her. She now recommends that parents “strongly consider” credit freezes for their kids.

“The landscape has changed,” Velasquez says.

In my latest for the Associated Press, how to protect your child’s credit.

Tuesday’s need-to-know money news

Today’s top story: How to guard your cash from debit card fraud. Also in the news: How good credit can open doors when renting your first apartment, how to prepare for the inevitable stock market crash, and when to write up a financial agreement with your partner.

Debit Card Fraud Still Rising; Here’s How to Guard Your Cash

When Renting Your First Place, Good Credit Can Open Doors
Don’t let your score determine your options.

Will the Stock Market Crash? Yes. Here’s What to Do Now
Taking preventative action.

When and How to Write Up a Financial Agreement With Your Partner
Taking a big step.

Q&A: How to get a higher credit limit after the card company turns you down

Dear Liz: I asked for a credit limit increase on my Visa card from $5,000 to $20,000. I was turned down because of not enough income. I was very disappointed and wonder what if anything I can do to reverse the situation.

I am a 77-year-old retired widow who owns my home with no mortgage. My annual income is around $50,000 from Social Security and my required minimum distributions from IRAs. I have no debt. My investments and savings obviously don’t count. I was about to charge $12,000 in airline tickets and wanted to take advantage of the cash back on the credit card. I always pay my credit card bill in full every month. I feel discriminated against.

Answer: Imagine you’re a lender and one of your customers suddenly demands that you quadruple the amount you’ve agreed to lend her, with the resulting credit line equal to 40% of her income. That might give you pause.

Or perhaps not. Credit card issuers have different policies about when to grant or deny credit, and those policies can change over time as they try to manage the risks of their lending portfolios. Also, issuers may be less generous to their longtime customers than they are to the new customers they’re trying to attract.

Understanding all that can help you formulate a game plan to get what you want. One option is to call the issuer, explain your situation and ask for a temporary credit line increase so you can book those tickets.

Another (and certainly more lucrative) option would be to apply for a new credit card with a fat sign-up bonus from a different issuer. Several cash-back cards offer rewards of $150 to $200 once you spend a certain amount within the first few months, and you would meet that requirement easily with your ticket purchases.

If you’re willing to consider something other than a cash-back card, you can check out travel rewards cards that offer points or miles. Several have bonuses that can translate into $400 or more of free travel.

Applying for a new card might temporarily drop your credit scores a few points, but that shouldn’t be a concern if you’re not planning to apply for a major loan in the next few months.