What’s a Hard Credit Check, And Why They’re Valuable

I talk a lot about “hard” and “soft” credit pulls. I don’t think I’ve ever actually seen these terms used by FICO officials, so it may be kind of confusing. Money geek slang, who knew? A credit check, also known as credit pull or credit inquiry, is (logically) when a third party wants to examine at your credit history.

A “soft” pull is one that does not affect your credit score. You can get 1,000 of these and it won’t matter as they are not visible to other people checking your credit. These are often done without your knowledge as long as they have a “permissible purpose by law”, and may include:
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Summer Internship or Summer Entreprenuership?

What should I do with extra time this summer?

1) Get an internship that will look better on my resume and help get a real 9-5 job. Make decent money.

2) Continue working to grow my freelance business, and perhaps try some new ideas out as well. Make as much money as I work hard enough or smart enough to make.

I realize there are a million shades of grey I’m leaving out, but I think the real question is do I really want to work for myself. Hmm. Maybe try both?

Researching Bridgeway Funds and BRSIX

bridgeway.gifAfter reading about how micro-cap stocks are a great way to improve your risk-adjusted return, I decided to read up more on BRSIX – Bridgeway Ultra-Small Company Market Fund. I thought Bridgeway was just another boutique mutual fund company, with sexy funds chasing hot sectors. Well, I was a bit right, but also found a lot more.

After reading some more , it appears Bridgeway Funds are known for their brutal honesty and their ethics. From this Statesman article, they were voted the most reputable company by financial advisors, even over Vanguard and Calvert. This is displayed by their code of ethics and the following (also from the article):
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Carnival of Investing Page Is Up

The new Carnival of Investing page is up. I’m excited to be the new home of the Carnival, as I really think investing is the next frontier that I need to learn about since I don’t have any debt anymore and am increasing our net worth regularly each month. Gotta put that money to good use!

Thanks to Consumerism Commentary, Canadian Capitalist, and AllFinancialMatters for offering to host the next few weeks. I’m still looking for new hosts! You don’t have to have hosted before, but it may get you a date preference or something. It’s a great way to bring new and different readers to your blog.

Only Buy Insurance For The Big Stuff

These days you can buy insurance for anything. Your new digital camera. Your cell phone. Your rental car. Your newborn baby. This Slate article titled ‘Risky Business: Should you ever buy rental car insurance?‘ sums up my thoughts on insurance in general very well – you should only purchase insurance to protect you from something really significant.

Examples include the death of a spouse that you depend upon for income or care, your house burning down, and needing serious medical care. After that, what constitutes ‘significant’ will be more of a personal decision. For some, $1,000 may be significant, while for others it may be a drop in the bucket.
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Emigrant Direct up to 4.65% APY

Emigrant Direct has raised their rates again. If you’re opening an account, don’t miss out on your up to $20 bonus through signing up with Emigrant Direct here!

401ks: How Does Your Employer Match Up?

My last post got me to thinking – How many companies match 401ks, and how much? My old employer matched 100% up to 6%, with full vesting in 5 years. Here is some 2006 data via a press release from a company called Aon Consulting:

This study also shows that 85 percent of organizations make contributions to employee 401(k), 403(b) and 457 plans to a certain level. In fact, 29 percent of companies offer a 100 percent match on employee contributions, while 7 percent provide a 75 percent match and 39 percent of employers match 50 percent of employee contributions. The level to which companies provide a match varies, based on employee contribution. More than 40 percent of organizations match employee contributions of 6 percent or more of pay, 16 percent match pay contributions between 5 percent and 6 percent, and 18 percent of companies match employee contributions between 4 percent and 5 percent of pay.

Good News: Wife Is Getting A 401k!

Several of you mentioned that I should increase my wife’s 401k contributions after her recent raise. Great advice, but alas, she had no 401k. We were a 401k-less family. I say were because it looks like soon her employer is giving her one! Details are a bit fuzzy, but it looks like she gets a 100% match up to 1.5%. Not going to win any employer-of-the-year awards, but hey it’s progress. I really hope the administrator is Vanguard or Fidelity, but I as long as the fees aren’t onerous and there are some index funds I’ll be happy.

$89 million dollars of employer matches were left on the table in 2003. I hope none of y’all out there are giving up your 401k matches. It’s the quintessential free money! Money gurus agree: Everyone should be contributing to max out the employer match even if you have credit card debt. Where else can you get an instant 50-100% return on your money (depending on your specific match)?
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Credit Score Myths – Don’t Cancel Old Accounts

Credit scores remain all the rage, but there are a lot of misconceptions out there. Four common ones are outlined in this MSN Money article titled ‘4 Credit-Scoring Myths‘. What’s the first myth? That closing credit cards will help your score.

No, no, no. For the umpteenth time: Closing accounts can never help your credit score, and may hurt it… It?s true that having too many open accounts can hurt your score. But once you?ve opened the accounts, you?ve done the damage. You can?t repair it by shutting the account, and you may actually make things worse… The credit score looks at the difference between your available credit and what you?re using. Shut down accounts, and your total available credit shrinks, making your balances loom larger, which typically hurts your score.

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Drive A Lot? Use the Citi Driver’s Edge MasterCard

I’ve realized that I am in the minority when it comes to driving. I put on maybe 6,000 miles a year. Many people log over 20,000 miles on their car every year! If you are one of these road warriors, I just got e-mailed about the Citi Driver’s Edge Platinum Select MasterCard (Thanks JW). It looks great in multiple ways:

» You get rewards just for driving. You?ll earn $1 in Drive Rebates for every 100 miles you drive?up to $500 in Drive Rebates a year. Drive 20,000 miles a year? That’s $200 a year just for driving! To track miles and get rebates you just mail in your receipt whenever you get an oil change or other receipt.

» 6% cashback on gas for the first year. Obviously driving a lot = $$$ for gas. Assume you get 20 miles per gallon. Driving 20,000 miles, that’s 1,000 gallons. At $3 a gallon, that’s $3,000. Times 6%, that’s another $180 cashback on gas alone.

» You also get 6% back at supermarkets and drugstores for the first year (3% after that). That beats out the Citi Dividend Card (which I have) for the first year. You earn 1% on everything else. Here is Citi’s example chart of how this could add up:

Rewards Table

» There is a cap of $1,000 per year, which is significantly higher than the $300 or the Dividend card as well and allows you to rack up more cash.

Come to think of it, this is not a bad card just to keep around. If you drive 10,000 miles in a year, that’s still $100 a year just for
driving. There is also no annual fee. What other card does that?

Rebates do expire if you don’t make a purchase in a year or if you don’t redeem within 5 years. Not too harsh. It’s all spelled out in the fine print on the application, so be sure to save a copy.

There is also a 0% APR balance transfer offer with this card, and as such is for people with good credit. But do not use it if you want to get these rebates. Remember, all payments go towards the balance at lowest interest rate.

What’s the catch?
The DriveRebates are redeemable as straight cash only towards car expenses. But that’s any car expenses – buying a car, leasing a car, oil changes, new tires, repairs, etc.

But, they can also be converted to ThankYou points. Each $1 in Driver?s Edge rebates is equivalent to 100 ThankYou Points, or put another way $100 in rebates can be converted to a $100 Gift Card at Target, Chevron, Gap, etc. Note: If you have student loans, you can still get straight cash towards those.

I think the easiest way to cash in on these points is just to get gas cards. Sure, you won’t be able to get 6% back anymore by buying with this credit card, but even after accounting for that you’re still getting 5.64% back which is still very good.

Hmmm…
As I write this, I’m convincing myself more and more to apply for this card. Even if I only drive 6,000 miles a year, that’s $60 – which will basically pay for all my oil changes and tires every year.

Update: I applied for this card myself, going to redeem for either gas or a set of tires.

Big Fat Check From eBates

Well, it’s actually only for $42, but that’s what eBates calls their rebate checks. eBates and other similar sites were discussed previously.

ebates.jpg

You can wring out the most cashback at each separate store by checking out EvReward first, but the thing with these programs is that since you always have to wait at least two months before getting your promised money, so you want to deal with a reputable site. Free money!

Bogle Has A Blog

Catching up on e-mails, I see that that Jack Bogle, index fund pioneer and founder of Vanguard, has a blog now called the Bogle eBlog. It doesn’t look like it’s going to have many personal anecdotes, more like a ‘Recent News’ type of thing. Too bad. Thanks Jonathan for the tip.