If you decide to apply for a loan, you’ll have a better chance of being accepted and getting a competitive rate if your credit rating is good. The details held in your credit file can be accessed by lenders when you apply for borrowing. It shows them information about your financial history, for example your record of paying on time, your total debt, whether you’ve been bankrupt, that kind of thing.

You can see exactly what a potential lender would see by looking at your credit file. Our new tool allows you to compare credit report agencies, so you can find the best price for accessing that information.

Room for improvement?

If your score isn’t as high as you would like, how can you improve it? Here are a few key tips.

Get going

If you’ve never used credit then your file will be empty and potential lenders won’t be able to work out whether or not you’re safe to lend to. Read more…

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Congress, in their infinite wisdom, decided to throw a bone to us little people when they wrote the 401k hardship withdrawal rules into the tax code.  401k plans, like IRAs (both Roth and Traditional), are subject to a 10% early withdrawal penalty when you withdraw money before age 59 1/2.  You can choose to roll over your 401k into an IRA, but it’s still locked up until you reach retirement age (unless you qualify for certain early withdrawal exemptions or take substantially equal periodic payments, but I digress).  Also, while hardship withdrawals are allowed under the law, there is no rule saying your plan administrator must allow them.

401k Hardship Withdrawal Rules

401k hardship withdrawals are allowed only under very specific circumstances, and your and the IRS’s definition of “hardship” may be very different.  There are five overriding 401k hardship withdrawal rules:

1. The withdrawal is due to an immediate and severe financial need – You can’t take a hardship withdrawal in anticipation of some emergency 9 months down the line.  Qualifying needs will be discussed below.
2. The withdrawal must be a last resort – You must have no other funds available to fulfill the need.  For example, if you have $10,000 sitting in a bank somewhere, the hardship withdrawal will be disallowed.  It must truly be your last resort.
3. You must only withdrawal what you need – If an emergency medical procedure costs $2,000, for example, you are only allowed to withdraw $2,000.  Any amount over that will be subject to penalty.
4. You must have exhausted all taxable loan options – If your plan administrator allows borrowing against your 401k (which is bad idea), for example, you must have exhausted that line of credit before being eligible for a hardship withdrawal.
5. You can’t contribute to your 401k for 6 months after the hardship withdrawal – I suppose Uncle Sam believes if you can afford to start contributing again so soon, you didn’t really need the hardship withdrawal to begin with.

Qualifying Hardship Withdrawal Expenses

Some examples of expenses qualifying for a hardship withdrawal, assuming the conditions above are met, include…

• Non-reimbursable medical expenses for you or your immediate family (as well as your dependents)
• Purchase of a home for first-time home buyers (IRA’s have much laxer rules for this)
• Higher education costs (consider opening an education IRA instead)
• Money to pay your mortgage in an attempt to avoid foreclosure (you might consider a short sale instead)
• Home repair costs
• Funeral costs

Uncle Sam goes out of his way to make taking a hardship withdrawal as difficult as possible, and for good reason.  Practically any other option will be better in the end.  Still, it’s comforting to know the money is there in times of desperation.

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TransUnion Settlement Benefits Delivered

For the old-school readers of 20somethingfinance, you may remember a post I did about 18 months ago on the TransUnion settlement from a class action lawsuit. If you didn’t sign up to receive free benefits at that time – it’s too late (sorry).

If you did sign up to receive benefits, good news may have come (or will be coming shortly). I FIN

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In 2008 credit card fraud set a new record in the USA when it was announced that about a dozen members of a credit card fraud ring had been indicted on identity theft charges. The group had stolen millions of card numbers and other confidential information in what law enforcement spokespersons described as the biggest and most sophisticated credit card fraud and identity theft case in United States history. Despite the fact that the credit card fraud network only netted about 10 or 12 people, it involved a conspiracy that allegedly targeted such retailers as TJX Companies, BJs Wholesale Club, OfficeMax, Boston Market, and Barnes & Noble.

Credit card fraud is now blamed for about half of all financial fraud that is perpetrated worldwide, and the cost of identity theft and related credit card crimes is in the billions. Read more…

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If you’re a homeowners looking to lower your monthly mortgage payment and get a better interest rate, you may be considering refinancing your home. While refinancing your mortgage can reduce costs, it may not be the best option for many homeowners.  Your current financial situation, career status, and plans for the future will all have an impact on your decision to refinance.

When Refinancing Your Home Makes Sense

The rule of thumb is that a mortgage refinance is generally only a slam dunk when you can lower your interest rate by two percentage points or more and if you plan to stay in your home for as long as it takes you be compensated for the cost of refinancing (learn how to calculate your payback period). For instance, if your mortgage payment drops by $250 a month and after adding in the cost of closing it takes you 24 months to start seeing the savings (a realistic number), you’ll need to stay in your home for at least 2 years to make refinancing worth the trouble. If y

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