CREDIT-BASED INSURANCE SCORING

A bright financial future is predicated upon making good decisions today. It is well documented the significant role that credit plays in that financial future: lending decisions, rates/fees offered on those loans, employment, and insurance ... The belief is that your ability to manage credit can be used to predict future financial behavior. It has been known for quite some time that insurance companies have used credit history data to aid in predicting insurance risk. It has only been recently 'shared' how that information specifically is used to determine if you qualify for coverage, and at what rate ...

"Your insurance score is a snapshot of your insurance risk at a particular point in time. It is a number based on the information in your credit report that shows whether you’re more or less likely to have claims in the near future that will result in losses for the insurance company. As with all Fair Isaac scores, the higher your score, the less risk you represent." The insurance score that most companies use is created by Fair Isaac and is referred to by different names at the different credit reporting agencies — InScore at Equifax, the Experian/Fair Isaac Insurance Score at Experian, and the Fair Isaac Insurance Risk Score at TransUnion.

How is Your Insurance Score Created?
-- 40% - Previous Credit Performance
-- 30% - Current Level of Indebtedness
-- 15% - Length of Credit History
-- 10% - New Credit/ Pursuit of New Credit
-- 5% - Types of Credit Used

OTHER INSURANCE SCORING RESOURCES.
- Get the facts on credit-based insurance scoring.
- Improving your insurance score.
- Insurance scoring facts & fallacies.
- Obtain insurance underwriting history - free.
- Property and auto claims history - free CLUE Report.
- What is not in your insurance score?

[FREE] ONLINE FINANCIAL MANAGEMENT RESOURCES

As more and more people are living paycheck to paycheck (over 40% of households at last count!), more and more resources are surfacing to assist consumers with day-to-day money management. Many of these free resources are geared specifically to novice managers; below is only a sampling of the available resources with a few notes about each...

You'll note that the majority of these were not mentioned in my blog a year and a half ago on free budgeting tools. One of the underlying strengths of many of these new systems is their strong support networks - think of them as a Jenny Craig or Weight Watchers for your personal finances.

CLEAR CHECKBOOK.
- Account updating through many mobile services.
- Personalized reminders and alerts.
- Set spending limits.
- Scratch pad for notes, goals, price comparisons, etc.
- Simple editing features.

GEEZEO.
- Geezeo Blog.
- Numerous 'learning' resources.
- Product marketplace - compare various financial offers.
- Provides access/linking to investment accounts as well.
- Social network/financial support group.

I-EXPENSE ONLINE.
- Geared to detail-oriented individuals.
- One-click access to features.
- Test things with a guest account first.
- Tips section can be browsed for budgeting suggestions.
- Weekly progress chart.

MINT.
- Continually offering new and improved features.
- No bookkeeping required.
- Notifies you of account fees and finance charges.
- Provides solutions based upon personal spending patterns.
- Secure - uses same encryption banks use for data protection.

QUICKEN ONLINE.
- Connects to over 5,000 financial institutions.
- Live Community Forum.
- Sends reminders to a cell phone or e-mail (iPhone compatible).
- Transactions for accounts automatically download each night.
- View bills, spending details, account balances and transactions.

WESABE.
- Leverage smart decisions to an entire community.
- Personally targeted money tips.
- Share your money saving tips and goals with others.
- Some of the best user forums on the web.
- Translates "bankspeak" into friendly transaction descriptions.

YODLEE.
- Account sharing (w/ accountant, financial advisor, etc.).
- Connectivity to over 11,000 data sources.
- Consolidated view of all financial accounts.
- Expense, budgeting, and other analytical charts.
- Most comprehensive online solution.

GIFT CARDS

As the holidays approach, the topic of gift cards seems to always come up ... Despite the naysayers, people in general seem to love gift cards. Last year, gift cards were the second most popular gift to give (According to December 2007 issue of Consumer Reports Money Advisor); listed as the number one gift women wanted to receive (number three on the list for men). A Get Rich Slowly blog post outlines a growing concern of people and gift cards - what to do when stores go broke.

An AP article from earlier this year estimates that over $75 million in gift cards are at risk of becoming worthless pieces of plastic this year [from store and restaurant closings]. Kwame Kuadey, the author of GiftCardBlogger.com, a blog about gift cards, offers helpful suggestions if you find yourself in such a predicament:

- Get on the phone. Call the nearest store to find out if they are still accepting gift cards. Some, like Linens 'n Things, can continue to redeem gift cards by petitioning the bankruptcy court.

- If they are accepting, use immediately. They may not redeem for full value (i.e., Sharper Image customers that received 50% of value), but something is better than nothing. If they are not accepting gift cards, you can hope for:

- Competition. Do a google search to find out if competitors are running special promotions targeting gift card holders of the bankrupt company. For example, when Bennigans went out of business, Texas Roadhouse offered a promotion where holders of Bennigan's gift cards could exchange them for a free entree certificate that was good for any item on their menu. It is not an uncommon strategy to try to 'lure' new customers.

- Take them to court. Obviously you are low on the totem pole (essentially treated as an unsecured creditor) in the courts eyes. While odds are slim, it is your right [to take them to court].

- Go to the government. This would be a good strategy if the gift cards held are from local, small businesses. In this instance, contact your State Attorney General. Recently in St. Louis, a local spa (Spa 151) went out of business leaving several hundred gift card holders with worthless gift cards. More than 300 consumers filed complaints with the Attorney Generals office. The Missouri AG was able to get the former spa owners to pay over $100,000 to redeem the cards and certificates.

- The best offense. The last piece of advice offered is to be proactive. You don't need to be a financial analyst to know if a company is struggling. Store closings and layoffs are clear signs of a company that is having issues. The example he shared was Circuit City - a company that has shed thousands of employees, hundreds of stores, and has a stock price today of 26 cents.


ADDITIONAL GIFT CARD RESOURCES.
- Gift Card Buy Back
- Gift Card Tips & Tricks
- GiftCardBlogger.com
- Gift Certificates & Gift Cards
- Pros & Cons of Gift Cards
- SwapAGift.com