How do I Safely Invest My Money?

Investing your money, also known as asset allocation, should begin with assessing your

tolerance for risk. Some people weather the ups and downs of the stock market or have no problem purchasing real estate in an unsure economy. However, if you want to invest your money more safely, you have several options beyond stuffing dollar bills under your mattress. Remember that you should not invest any money if you still carry high-interest debt, because the interest you pay most likely exceeds any interest you would earn on your investment.

Step 1

Study your financial records to determine your budget for safely investing. Once you know your income and expenses, you can set up an automatic withdrawal from your checking account to place in the investment vehicle of your choice.

Step 2

Establish a savings account. Over the long term, funneling money into an account fully insured by the FDIC or NFCU constitutes your safest investment. Research credit unions, local banks and Internet banks to locate a high-interest savings account or a money market account. Note that accounts that yield higher interest may have minimum balance and transaction restrictions.

Step 3

Add a tiered certificate of deposit savings plan to your investment portfolio. In a shaky interest rate environment, your best hedge against losing money on a CD with low interest is to invest in a few different types. For example, you might place 1/3 of your money in a one-year CD, 1/3 in a six-month CD and another 1/3 in a three-month CD. When your CDs mature, you can seek out the new highest CD rates and terms for reinvestment.

Step 4

Diversify your investment portfolio. You pay for keeping all your money in extremely safe vehicles. The low interest you earn means that you most likely will ultimately lose money when you account for inflation. Hedge against this by setting aside a small amount of money, such as $25 or $50 per month for a slightly riskier investment, such as your workplace's 401(k) and retirement accounts that offer tax benefits and employer-matching.

Step 5

Open a money market mutual fund to absorb any extra income that you can eventually liquidate for a house payment or other major purchase. Money market mutual funds do not have FDIC insurance, but they invest in cash-like vehicles that carry little risk, such as treasury bills and bonds.

Cut Your Car Insurance Costs

Who Needs It Most

If you have a car, you need auto insurance. Most states have minimums, at least for liability, and insurers will generally suggest coverage ranges for other types of car insurance based on where you live, what you drive, and how you drive.

What to Ask Your Insurer

• Are you covered against uninsured drivers, or do you need a separate policy?

• Do you want or need roadside assistance with your policy? (If you belong to a roadside assistance club like AAA, you don't need double coverage.)

• Will your policy pay for a rental if your car is out of service?

How to Get Costs Down

• If you haven't consolidated policies with your spouse, make sure to do it. Statistics show that married couples are less of a claims risk, which means lower premiums. You also may be eligible for other discounts, so ask your insurer.

• Bundling multiple insurance policies can lower your bottom line, whether it's grouping your property, auto, and even life insurance policies.

• As cars age, the cost of repairing them rises -- so you may pay more for collision insurance on a clunker than on a new car. If it’s cheaper to replace your car than to repair it, reduce or eliminate your collision coverage.

• Consider raising your deductible (maybe you'd be responsible for the first $500 in damages rather than the first $250). The increase may be offset in the long run by lower monthly payments.

Research the insurability of any new car you plan to buy. Vintage models or often-stolen cars (like Honda Civics, which are easy for thieves to strip for parts) may cost you more than a pricier but lower-maintenance vehicle.

How do I Invest Money in the Bank?

If you are looking for a risk-free way to invest your money and help it grow, the answer might be as close as your local bank. Banks offer a number of investment options, including insured products like certificates of deposit, money market accounts and savings bonds, as well as more volatile choices like stock and bond mutual funds. Choosing the right options for your needs can allow your money to grow without undue risk.

Step 1

Check the Federal Deposit Insurance Corp. (FDIC) coverage status of the bank by visiting the FDIC website (see Resources). As long as the bank is fully FDIC-insured, your certificates of deposit, savings accounts, checking accounts, money market accounts and other bank instruments are insured up to $250,000. This FDIC coverage does not extend to investment vehicles offered by the bank, such as mutual funds and stocks. Always get a clarification on FDIC coverage before investing in any product offered by your bank.

Step 2

Decide what types of investments you are interested in. Choosing bank products that are FDIC-insured keeps your money totally safe, but the returns will not be as high as riskier investments like mutual funds. Banks sell not only guaranteed investments but riskier ones as well, and it is important for customers to know the difference.

Step 3

Request a rate sheet from a teller at your bank. The rate sheet is a list of all the accounts at the bank, both deposit accounts and loan products. The document lists the current interest rate on all those products.

Step 4

Compare the yield on liquid investments like money market accounts and savings accounts to less-liquid choices like certificates of deposit. The rates on CDs tend to be higher than either money market or savings accounts, especially if you are able to keep your money tied up for a number of years. You need to weigh the benefits of a higher rate against the inconvenience of not having ready access to your cash.

Step 5

Discuss any additional investment options with an account representative at your bank. Ask for full disclosure of any fees and expenses, as well as any commissions involved in the sale. If you are interested in mutual funds, you might be able to find less-costly investment options by working directly with a low-cost no-load mutua- fund company.

How to Invest Properly

Selecting investments is a lot like trying on clothes: What fits you really well might not look good on someone else. Some people take a conservative, traditional approach to what they wear -- and what they invest in. Others go with what is new and trendy -- the hottest clothes and the hottest stocks. When building an investment portfolio, you need to consider your stage of life, your financial objectives and your willingness to accept risk.

Step 1

Decide how much time you want to commit to investing. If you want to pick individual stocks by reviewing publications such as the Value Line Investment Survey, which includes rankings of 1,700 stocks, you will have to devote the time it takes to study potential investments. If you don’t have the time or interest in learning about stock selection, let the professionals do it for you by investing in mutual funds. These are funds with groups of stocks and bonds, and numerous types of funds are available to fit aggressive or conservative investors’ needs.

Step 2

Diversify your investments. It’s never a good idea to put all your investment capital into one or two stocks. Spreading your money over a half-dozen or more stocks or mutual funds can help limit your risk. One stock performing particularly well can mitigate the effect of another one that is dropping in price.

Step 3

Decide on an asset allocation model. It is considered prudent to own a mix of stocks and bonds and to keep a portion of your funds in cash should you need to use some of the money. A standard model is to subtract your age from 100 to determine the percentage of funds to hold in stocks. For example, a 25-year-old would have a portfolio 75 percent invested in stocks. Another traditional model is to have 55 percent in stocks, 35 percent in bonds and the remainder in cash.

Step 4

Consider your attitude toward risk. Decide whether you can accept the possibility of losing a significant portion of your investment if the stock market severely declines. If risks like these make you uncomfortable, build a risk-averse portfolio with stocks of large, stable companies, along with quality bonds and some risk-free investments, such as a savings account.

Step 5

Resist the urge to jump into the stock market with all the cash you have accumulated. Try a dollar-cost averaging strategy, investing the same dollar amount each month or quarter. This method allows new investors to become patient, long-term investors through good markets and bad rather than trying to time the swings in the market, which is difficult to do.

Step 6

Review your investments and investment strategies at least twice a year. Being a long-term investor doesn’t mean you simply buy stocks and ignore them. Sometimes, it's best to sell a stock or mutual fund that is performing poorly and redeploy the capital in a better one.

Internet investment's

THEY may not have the name recognition of a Google or a Yahoo!, but they can claim to belong in the same league. The websites of Digital Sky Technologies (DST) account for more than 70% of page-views on the Russian-language internet. Naspers is Africa’s biggest media group, both offline and online. And Tencent is China’s largest internet company by market capitalisation—and the third-largest in the world.

Now these firms are increasingly making their presence felt beyond their home markets. Between them they have invested in dozens of internet firms around the globe. The most adventurous of the three, DST, has already moved west—and paid top dollar for stakes in fast-growing American companies, notably Facebook, the world’s biggest social network.

At first glance the three firms could not look more different. DST was created in 2005 when two Russian internet investors, Yuri Milner and Gregory Finger, pooled their interests in mail.ru, a Russian web portal. Today the firm controls many of the country’s leading websites and boasts an interesting mix of owners, including Goldman Sachs and Alisher Usmanov, a Russian billionaire, who holds 27%.

Based in Cape Town, Naspers is nearly 100 years old and is the publisher of the Daily Sun, South Africa’s biggest newspaper. But it is one of the most ambitious old-media companies anywhere in its move online. It still makes most of its sales—28 billion rand ($3.6 billion) in the year to March—from print and pay-television, but it uses the cash to buy online firms.

Tencent hails from Shenzhen, near Hong Kong. Founded in 1998, it had revenues of $1.8 billion in 2009. Although best known for QQ, a popular instant-messaging service with 567m users, much of its profits come from online games and a virtual currency, called Q coins. Users purchase this with real money and use it to buy digital wares, such as virtual weapons to increase the powers of their avatars.

Despite their differences, the three firms can be seen as a block. For one thing, they are financially intertwined. Naspers owns part of mail.ru and was an early investor in Tencent, of which it now holds 35%. In April Tencent invested $300m in DST, giving it a stake of more than 10% and DST a valuation of about $3 billion. Tencent also has an interest in the Indian arm of MIH, Naspers’s internet division.

What is more, the firms are on the same mission: finding promising internet companies in countries where Western investors rarely dare to go. DST’s territories are Russia and its neighbours, most of which are home to one of its collection of companies; these include social networks such as VKontakte.ru and Nasza-Klasa.pl. Naspers has the largest portfolio of internet firms in developing countries, for instance in Brazil (BuscaPé, a comparison-shopping site), India (ibibo, a social network) and at home in South Africa (24.com, a portal). Tencent has so far been the most cautious of the three. Besides its recent investment in DST it has some minority stakes in games companies, such as VinaGame in Vietnam.

This international presence allows the firms to apply lessons they have learned in one country to another. “We spend an enormous amount of time on sharing knowledge,” says Antoine Roux, the boss of MIH. For its part, DST knows which web businesses work and how much room for growth they still have, given a country’s GDP and internet penetration. Alexander Tamas, a partner at DST, calls this “geographical arbitrage”.

In Russia DST has seen how quickly social networks can grow: latecomers to the internet, many Russians skipped e-mail and went right to social networks to communicate online. With advertising roubles in short supply, DST’s companies also experimented early with other ways of making money from social networks and online games, such as charging for services and selling virtual goods. In December it merged mail.ru with Astrum Online, a gaming firm—in effect forming a Russian Tencent. Free communication tools such as instant messaging create the audience that then pays for other services and virtual goods, Mr Tamas explains.

                                                         Tomorrow, the world

It was only a question of time before one of the three firms tried to apply these emerging-market lessons in the West. DST has been the pioneer, for several reasons. Its partners learned their trade in America. It intends to go public one day. And it saw an opportunity: after the financial crisis, conventional investors were cautious and did not fully realise how fast social networks, for instance, would grow.

One further factor was essential in helping DST to gatecrash the party of the handful of private-equity funds, such as Elevation Partners, TCV and Silver Lake Partners, which typically provide successful American internet firms with additional cash. DST’s corporate structure allows it to act quickly, and to make offers that are hard to refuse. In the case of Facebook, it agreed to what at the time seemed a high valuation, waived any right to special treatment should things go wrong and was willing to buy stock from employees. That is especially popular with young internet firms. It allows founders and key employees to make money without having to sell the company or go public prematurely. “This is an IPO substitute,” explains Mr Milner, adding that DST’s investments give firms more time to focus on their product rather than thinking about a flotation.

Will DST’s strategy work? Buying into Facebook certainly looks like a smart move. DST has spent an estimated $800m for a stake of about 10%. When Elevation Partners recently invested $120m in Facebook, that deal put the company’s value at $23 billion, implying that DST’s investment has almost trebled.

In contrast, analysts say, DST may have overpaid for Zynga, the world’s largest online-gaming service, and for Groupon, a website that aggregates buyers and gets them special deals. Yet sceptics may again underestimate how quickly both can grow and what Zynga, for instance, is worth in combination with Facebook: taken together they look much like Tencent. In May, after lengthy negotiations, both firms agreed that Facebook Credits, the social network’s currency, would be accepted in Zynga’s games.

A bigger problem for DST may be that some see it as Russian—and thus “murky”. To counter this the firm has gone to great lengths to be open, inviting executives from firms in which it wanted to invest to Moscow to look at its books. The success of this strategy is demonstrated by the quality of its recent deals and its co-investors, which include such noted venture-capital firms as Accel Partners and Andreessen Horowitz. Even so, DST’s national origin could still matter as the firm makes further investments. Authorities in Washington, dc, are reportedly worried about DST’s latest acquisition: ICQ, an instant-messaging service previously owned by AOL.

However DST fares, it seems to attract copycats. Before Elevation Partners invested in Facebook, it had already cut what is now called a “DST deal” with Yelp, a fast-growing user-review site for local businesses. And although Naspers does not intend to make any investments in Western countries, Tencent may follow DST in doing so. Martin Lau, Tencent’s president, recently said it would step up its forays abroad—which has led to talk that it may be interested in buying Yahoo!.

Conversely, the apparent success of the three emerging-market internet pioneers may prompt Western venture firms to take more interest in developing countries. Tiger Global Management, a New York hedge fund that is also a shareholder in DST, has already specialised in investing in start-ups beyond the West’s well-known technology clusters. Clearly, internet investing is going global and the West is losing its monopoly, not just in thinking up clever ideas for web businesses but in financing them.

Illegal Internet Investment Scheme

Illegal Internet Investment Scheme is a variation of illegal deposit taking activities which employs the use of internet (e.g: through emails and websites) as a primary channel for interaction, communication and transaction of business engaged in fund management and investment advice without any licence.

Illegal investment schemes are those companies or individuals that are dealing in securities, trading in future contracts, and providing fund management services and investment advice and related to securities or futures without being licensed by the Securities Commission under the Capital Markets & Services Act 2007

In addition, fund managers are required to hold a fund manager's licence under Section 15C of the Securities Industry Act 1983. 

What are the characteristics?

With the Internet becoming a common part of daily life, it should be no surprise that fraudsters have made cyberspace a prime hunting ground for new victims.

The Internet has made it simple for fraudsters to reach out to millions of potential victims at minimal cost.

Many of the online scams we see today are merely modified versions of old schemes that have been used to fleece offline investors for years.

How it's done?

• Operators of illegal internet investment schemes lure unsuspecting victims to make on-line investments or receive investment advice online, by offering investment opportunities above a market rate of return and will claim that their schemes are at zero or very low risk.
  
  
• When questioned, most illegal operators will either claim to be foreign operators that do not require licenses from Malaysian regulators to operate their business, or claim that they already have the appropriate license from relevant authorities/regulators.
  
  
• Unsuspecting victims of these schemes would be enticed as operators will pay them high returns at the initial stage and this is used as a tactic to lure and recruit new investors.
  
  
• The survival of this scheme is dependent upon the recruitment of new depositors, i.e., funds obtained from new depositors will be used in paying dividends to the existing depositors. Therefore, the scheme will fail when there is no contribution of funds from new depositors; and
  
  
• However, the operator will eventually abscond with deposits collected when he feels that the scheme is about to fail, thus leaving the depositors at the losing end. 
  
  
• These operators are not licensed to receive deposits by Bank Negara Malaysia or licensed to offer investment advice from the Securities Commission related to fund management, securities and futures.

How to Protect Yourself?

• Remember the golden rule - if it sounds too good to be true, it's probably a lie;
• Deal only with licensed financial institutions and authorised dealers;
• Check with the relevant authorities before investing/ depositing;
• Don't be pressured or rushed to invest;
• Be extra careful with investments over the internet;
• Be sceptical of any investment opportunity that is not in writing; and
• In case an investment has been made, keep copies of all the investment and communications

Tax Tips You Need to Know Now

1. It’s Best if You E-File 

E-filing can save trees, time and money for the IRS and for you. If you use tax software, the forms you need will be built right in, and if you’re owed a refund, you’ll get it faster. And, through a special LearnVest partnership, you can get H&R Block’s basic federal filing package (normally about $20) for free just by signing up for our Ace Your Taxes Bootcamp.

However, there are a few instances in which you must file a paper return. If you need to file a paper return, check out our guide to IRS forms, which will tell you which ones you need for your specific tax situation. Then, read our instructions on how to file. Note that tax refunds this year will be delayed an extra week or two, so prepare yourself.

2. If You Get One Thing Right, Make It Your Filing Status 

Filing status is important because it can determine how much you pay (or save) in taxes. Also, if you get it wrong, it will definitely stick you with a dreaded audit. (Find out what else will get you audited.)

Your filing status basically expresses how you wish to be treated by the IRS, and can determine which deductions and credits you are allowed to take, which forms you should fill out and more. To make sure you get it right, check out our handy flow chart.

3. The Magic Number Is Your Adjusted Gross Income 

As you do your taxes, you’ll see a lot of instructions like, “if your AGI is less than $100,000″ or “up to 10% of your AGI.”

Here’s how AGI works: We report our income, but then the government subtracts certain expenses, such as education tuitions or IRA contributions, to determine our adjusted gross income, or AGI. Our AGI, in turn, determines what credits anddeductions we might be eligible for, and how big they are. After taking these additional deductions, credits and exemptions (all of which are described below), we arrive at our taxable income.

Learn to fill out your 1040 and figure out your AGI here.

4. Exemptions Are a Quick Way to Lower Your Tax Bill 

Did you know that you get a sort of tax discount just for the fact that you are a contributing member of society, that you’re married or that you have children? These discounts are called exemptions, and they reduce the income amount you will be taxed on–by $3,700 each in 2011.

This is a simplified example, but say you make $50,000 and you fall into the 25% tax bracket. If you can claim one exemption, you’ll pay $925 less in taxes (because 25% of $3,700 is $925). Find out more about each exemption and when you can take it.

5. A $1,000 Credit Equals $1,000 in Savings 

Unlike exemptions in the example above, which lower the amount of income you are taxed on, credits directly reduce the amount of taxes you owe. So if you owe $3,000 in taxes, a credit will be subtracted from that. To put it another way, if you receive a $1,000 credit, that means you will pay $1,000 less in taxes. It’s sweet and simple–a rarity in the tax code.

Read about credits to find out if you can claim any of the most common ones.

6. Itemizing Your Deductions Could Save You Thousands 

One big decision you’ll have to make is about itemizing, and you have two choices. You could:

a. Take the standard deduction. If your taxes are simple, the government won’t make you go through a complicated process to get the deductions you deserve. Instead, you can use the standard deduction which–like the exemptions we mentioned above–reduces the amount of income you will be taxed on. Most taxpayers take the standard deduction, which is worth anywhere from $5,800 to $11,600.

b. Itemize your deductions. Itemizing your deductions means listing out each deduction you qualify for. People do this when the sum of all their deductions is greater than the standard amount. Some things people might itemize include medical expenses, large charitable donations and mortgage interest payments.

The standard vs. itemized decision is really a question of money and time. For some people, taking the time to itemize could save them hundreds or thousands of dollars in taxes. But if you don’t need to itemize, then doing so could take up your time without any financial benefit.

7. Audits Aren’t the End of the World 

Yes, they are frustrating. But being notified of an audit won’t bring your financial world crashing down. In order to quickly process millions of tax returns, the IRS has certain flags that will automatically trigger an audit. That doesn’t necessarily mean you’ve done something wrong, just that your return has something that might signify you’re trying to defraud the IRS or that you made more than just a simple math mistake somewhere. (The IRS will correct basic math mistakes for you.)

If you did everything correctly on your return, you should be able to prove that you are paying all of your taxes. The IRS will agree with you and leave your return the same, and the audit will be over without any fines or (heaven forbid) jail time. Phew! If you made a mistake, you may have to pay more in taxes, interest or a penalty.

Find out the top IRS audit triggers, and how to make sure you don’t get in trouble for them.

8. You Can File an Extension for Paperwork, but Not for Payment 

If you just won’t be able to file your taxes on time, the IRS understands. (Their reputation for fierceness is a bit overblown.) You can file an extension for the paperwork, which we tell you how to do here.

But, if you get an extension, you can’t put off paying the taxes you owe. You must pay what you estimate you owe. If you just don’t have the cash to pay your tax bill, there are plenty of options, ranging from using your credit card (only for low tax bills!), to setting up a payment plan. Find out what to do if you can’t pay.

9. Sometimes You Just Need an Accountant 

We love DIY projects here at LearnVest. And when it comes to taxes, some people absolutely can do their taxes themselves. But some people need the help of a professional to puzzle through the tax code.

Some situations in which you should consider hiring an accountant include:

• Taking complex deductions

• Making non-cash contributions to charity

• Being self-employed or owning your own business

• Having a big life change like buying a house or having a baby

• Trading in investments frequently

If you’re still not sure, let our quiz tell you in our free Ace Your Taxes Bootcamp.

10. Do Not Get a Rapid Refund 

If you work with a tax preparer, you might be offered a rapid or instant refund. Do nottake it.

While it may seem like you are just getting your tax refund faster, this “refund anticipation loan,” as it’s called, is actually a short-term loan—one that likely has a predatory interest rate that will take a big chunk out of your refund; think $50 or more! Read more about rapid refunds.

Shocking Things That May Hurt Your Credit Score

10. Renting a Car With a Debit Card

While many rental agencies require that you pay your deposit with a credit card, some will accept your debit card instead. However, agencies typically have a clause in the contract stating that they can pull your credit report if you choose to pay with a debit card. That credit check causes a hard inquiry, which will ding your score a few points.

A hard inquiry is when a lender, credit card issuer or other financial institution requests a credit check in order to decide whether or not to extend a line of credit to you, such as a credit card or home loan.

Each hard inquiry usually drops your credit score by a few points and will remain on your credit report for two years. The other kind of inquiry, soft inquiries, are made by people who don’t intend to take action, such as your landlord checking your credit, and won’t have any effect on your credit score.

9. Requesting a Credit Limit Increase

While it could be a good idea to ask for a limit increase on your credit card (and might help your credit score in the long run), it could also damage your score in the short-term if it initiates a hard credit inquiry. When calling to request a limit increase, make sure to ask first if it will initiate a hard or soft inquiry on your credit report. Each institution handles it differently.

8. Applying for an Account at a Credit Union

With lots of people moving their money from big banks to smaller credit unions, it’s important to know that opening that new account could cause a hard inquiry. Before applying, ask whether or not opening a new account will involve a hard inquiry into your credit report. The inquiry isn’t unique to credit unions—most institutions conduct a hard inquiry when you open a new account.

(For more on whether moving to a credit union could be a good move for you, read this.)

7. Getting a New Cell Phone

Opening a new mobile account could also initiate a hard credit inquiry. Although each hard inquiry shouldn’t drop your score too drastically, you’ll want to be careful not to initiate too many in too short a time, or else these little actions can really add up.

6. Using a Business Credit Card

It used to be that business credit card activities didn’t show up on your credit report, but that’s no longer true. These days, all major credit card issuers require that you provide a “personal guarantee” when applying for a business credit card. That means you’ll essentially be a co-signer with your company on the card. Your company may be responsible for paying the balance, but your credit will take a hit if you fail to keep up with the paperwork or they default on a payment. If you work for a small, young business and need a business card for work expenses, first ask if you’ll have to provide a personal guarantee. If the answer is yes, you may instead want to use your own credit for business expenses and fill out expense forms.

5. Not Using Your Credit Cards

If you have a credit card account in good standing that has zero activity over a long period of time, your credit card issuer could choose to close your account due to inactivity. If you’re not using it, you may not notice that your account has been closed until your credit takes a hit. The reason this would hurt your score is that it would be bad for your credit utilization ratio. For more on what that is and why it matters, check this out.

4. Disputing a Credit Card Bill

If you’re in the midst of a credit dispute, some credit score algorithms may not take the disputed credit line into account when calculating your score, so a credit check done on your profile during that time could cause your score to be lower than it would be if the disputed account were included. Why? Again, by lowering your total “available” credit line, your credit utilization ratio would change, and not for the better.

3. Using a Finance Plan for a Major Purchase

A small, local furniture retailer may offer to let you finance a purchase … but if you accept the loan, it can hurt your credit because it’s considered a “last-resort” loan, which may make you look like a higher credit risk. Additionally, your credit could suffer from the high balance being reported on your credit.

For instance, say you apply for credit to finance a $1,400 couch. You get a great offer: no payments and 0% interest for 18 months. You take a few months to start making payments, and in the interim you have a new line of credit on your credit report. The new line will essentially be maxed out, because the limit will be $1,400 and your balance will be $1,400. Your credit utilization rate, therefore, would be negatively affected.

2. Closing an Old Credit Card Account

It may seem like a good idea to get rid of an old credit card, but it will decrease the length of your credit history and increase your credit utilization rate, both of which can lower your credit score. In particular, we generally suggest you avoid closing your oldest credit card, since that long credit history is an asset you’ll want to hang on to.

1. Sitting on Unpaid Parking Tickets

Some jurisdictions turn over unpaid parking tickets to collections agencies. Having an account in collections severely decreases your credit score. More and more municipalities have been sending unpaid parking ticket information to collection agencies recently, in an effort to close budget gaps.

This year, Chicago and the suburbs of Washington, D.C. have started pursuing unpaid tickets this way. New York City, which has nearly $700 million in overdue parking fines, does this, too. To find out if your city gives unpaid tickets to collections agencies, search on its .gov homepage or call the Department of Revenue. Keep in mind that this includes parking tickets you may have incurred as an out-of-state visitor!

Why You Need a Good Credit Score

CREDIT SCORES AREN’T NORMALLY THOUGHT OF AS SOMETHING TO MAKE YOUR HEART BEAT FASTER, BUT THE TRUTH IS THAT A GOOD CREDIT SCORE IS THE SAME AS GETTING AS MUCH AS TENS OF THOUSANDS OF DOLLARS FOR FREE.

When you apply for a major loan such as for a car or a home, potential lenders will look at your credit score to see whether it is risky to lend to you or not. And if you have good credit (a score above 760), lenders will view you as a low-risk loan recipient who is likely to repay the loan. And since they don’t fear that you’ll default, they’ll be willing to charge you a lot less in interest than someone with a poor score. In fact, for the very lowest scores, lenders won’t even give a penny.

To see this money savings in action, click here. Move the slider to the left and right to see how much your mortgage, car loan or credit card interest would be, depending on your credit score.

If you want to get a free credit score, check out Credit Karma, and for a free annual credit report, go to Annualcreditreport.com.

In order to maintain a good credit score, it’s important to make sure that you find erroneous charges early. For that reason, it’s a good idea to in the My Money Center, so you can see all your transactions at a glance and monitor them regularly.

Boost Your Credit Score!

Q: How do I get my credit score?

A: Three nationwide credit agencies (Equifax, Experian, and TransUnion) are required by law to provide free credit histories to anyone who asks. Once every 12 months, you can order your report -- which will have your score -- at AnnualCreditReport.com. After finding out your score, make sure everything is accurate. Have you closed accounts that are still listed as open? Any disputes you have should be sent to both the creditor and reporting agencies, and make copies for your own records.

Q: What credit score will keep me from getting a loan?

A: A score above 620 is considered good, but 650 is better and 700 makes you more desirable when applying for a mortgage. On the other hand, a score lower than 580 will likely give you trouble. About 35 percent of your score is based on your payment history, and any old late payments (that nasty college phone bill!) will stay on your record for seven years after the original due date. The best way to improve your score is gradually: Make all your current minimum payments on time, pay any past debts, and keep card balances down to about 40 percent of your credit limit.

Q: Will applying for more credit cards improve my score?

A: In general, a safe rule is not to apply for more credit cards than you actually need. In fact, every time you apply for a card, your score will go down by five points. But if you use it and make your payments on time, those points will quickly be restored. As long as you keep your balances low (within 40 percent of your maximum) and make all payments on time, credit cards can eventually help your score improve.

Q: How long do I have before my late payments are reported?

A: Late payments are usually reported to the credit bureaus within 30 days. However, it all depends on how often your creditor presents new information to the credit reporting agencies. Remember: Any late bill is eligible to go on your record, so unless you make arrangements with your creditor not to submit it, it'll eventually appear on your report.

Q: I have bad credit. Have I ruined our chances of getting a loan?

A: Not necessarily. If worst comes to worst and rocky credit has turned you into the most unpopular loan-seeker on the block, think about applying for the loan under your spouse's name only (assuming his or her credit is in better shape than yours). It's not ideal because, with just one salary involved, you'll have less-attractive loan options with higher interest rates. But don't despair: When you've finally whipped your own credit into shape, you can add your name to the paperwork later.