Check credit record before future employers do

If you're looking for a job, chances are you've spent a lot of time making sure your résumé is perfect. You should pay close attention to your credit record as well (USAToday.com Oct. 26).

While only 13% of companies conduct credit checks on all job applicants, almost half check credit histories for employees with financial responsibilities and senior executives, according to the Society for Human Resource Management, Alexandria, Va.

Many employers believe that credit reports contain relevant information about applicants--especially those applying for jobs where they'll have access to large sums of money or merchandise.

Here's help understanding your credit history:

• Realize the difference between credit score and credit report. Your credit score is a three-digit number that summarizes your credit history, and in many cases is the most influential factor in a lender's decision to grant you credit and at what rate, according to editors from the Credit Union National Association's Center for Personal Finance. A credit report shows a record of your past borrowing and repaying habits.
• Check your credit report yourself. You're eligible for a free credit report annually from each of the three major credit bureaus--Equifax, TransUnion and Experian--at annualcreditreport.com. Use the website to request one or call 877-322-8228.
• Know your rights. The Fair Credit Reporting Act requires employers to obtain your consent before reviewing your credit report. While you can say no, if you decline giving an employer authorization to pull your report, your chances of getting the job may decrease.

New rules affect 2011 flex spending accounts

Fall means football games to watch, maybe some raking, and, for those of us with flexible spending accounts (FSAs), it's time to plan how much to set aside for 2011.

While contributing to a health-care FSA is a great way to use tax-free payroll deductions to cover medical expenses, health-care reform will change the ways you can use funds in 2011 (Kiplinger Oct. 15).

Here are some examples:

• Over-the-counter drugs no longer qualify without a prescription. Starting in 2011, you'll no longer be able to use FSA money for non-prescription drugs, except insulin. Further, if your employer gives you until March 15, 2011, to use up the money in your account from 2010, you still won't be able to spend it on over-the-counter drugs without a prescription after Dec. 31.If you regularly use over-the-counter medications, such as pain relievers or allergy medications, ask your physician for a prescription. You may qualify for reimbursement in 2011 by submitting the prescription number along with the receipt.
• New rules may cover adult children's expenses. Since many employers have expanded the definition of dependent to include any child younger than 27 at the end of the year, you may be able to use money in your FSA for adult children's out-of-pocket expenses. Previously, this worked only if the child was a dependent for tax purposes.
• FSA limits will be lower in the future. FSA limits aren't changing next year, but the maximum limit will shrink to $2,500 in 2013. So if you're considering a medical procedure that isn't covered by insurance--such as laser eye surgery--you might want to schedule it in 2011 or 2012.

New rules for nest eggs affect 72 million AmericansNew rules for nest eggs affect 72 million Americans

Do you know exactly how much your 401(k) account costs you? You will, thanks to new rules announced Oct. 14 by the Labor Department (USA Today Oct. 14).

By Jan. 1, 2012, an estimated 72 million Americans who participate in 401(k) plans will have access to much-needed transparency--in user-friendly formats--about what their plan fees actually cost and how those fees stack up against other investments. Better yet, the new rules may result in bringing down those fees.

The new rules are intended to educate workers about more than half a dozen fees for things like administration, recordkeeping, investment advising, brokerage, and management services.

The goal of shedding light on fees is to help workers make better decisions. For example, if your operating expense is 2.5%, the new rules require that you also be told that the fee amounts to a cost of $25 per $1,000 invested. Compare that with an investment having an operating expense of 0.19%--or a cost of $1.90 per $1,000. Bottom line: The lower the fees, the better your return on investment.

Most workers don't realize that high fees eat away at balances over time. A 2006 report by the Government Accountability Office estimated that increasing fees on a worker's $20,000 401(k) account by just one percentage point could cut the plan's total value by 17% after 20 years (wsj.com Oct. 14). And for many workers, their 401(k) is the sole source of retirement income besides Social Security (National Public Radio News Oct. 15). That's why it's so important to compare fees.

Here's what you can expect by January 2012:

• Regular reporting. You'll see all administrative expenses on your quarterly statements, and they'll also be available online.
• Apples to apples comparisons. You'll see an explanation of all fees and expenses as a percentage of assets held and also as a dollar amount for each $1,000 invested.
• Performance data. You'll see information about how each investment option has performed in the past--including one-, five- and 10-year investment results--as well as comparisons with appropriate benchmarks.
• Comparison chart. You'll see a chart--or similar format--that makes it easier for you to compare each investment option.
• Glossary. You'll be given a simple, plain-English glossary of terms so you can understand your investment options.
• Website. You'll be given a website to visit for additional information.

Employment gaps and slow growth hinder job seekers

Unemployed and underemployed job-seekers continue to face an uphill battle in today's economy. Slow economic growth is leading to weak hiring even though unemployment claims fell during the first week of October to their lowest level since July (businessweek.com Oct. 14).

Those with large gaps in employment history on their resume face additional hurdles. Potential employers may view a disruption in work history as a lack of commitment, focus, or a bad work experience a job seeker is attempting to hide (wsj.com Oct. 18).

All is not lost for job-seekers with large gaps in their work histories. Here are three ways to help potential employers better understand your situation and put to rest any doubts that may arise due to resume gaps:

1. Clarify connections. No matter the reason behind employment gaps, use a brief sentence in your cover letter to help explain the situation in a positive light. Describe how your situation gives you unique insight and experience that will directly benefit your potential employer.
2. Amplify activity. Amplify entry-level stop-gap jobs, training, or other time-fillers like volunteer work. Your experience with customers or learning a new competency may have provided you with valuable skills and understanding that uniquely qualify you for a position.
3. Demonstrate development. Emphasize what you learned if you left a previous employer on bad terms. Use this as an opportunity to emphasize character growth and your ability to learn from a miscalculation. This demonstrates a level of responsibility and maturity that may separate you from other applicants.

Congratulations!

Congratulations to the following winners of gift cards at yesterday's Member Appreciation Day:

$25 Olive Garden - Diane Rivers and Christy Adkins
$25 Outback - Ken Braddy and Pat Tamburri
$25 Cheesecake Factory - Tina Loudermilk and David Grant
$25 Chili's - Karen Bell and Cordelia Wakefield
$100 Best Buy - Chris Johnson

Member Appreciation Day

Be sure to stop by the office on Thursday, October 21 for Member Appreciation Day. We'll have cookies in the morning, popcorn in the afternoon, and you can register for prizes while you're there. We'll see you then!

Change your driving habits to avoid costly repairs

It's not just your imagination: U.S. thoroughfares are bad and getting worse. According to recent analysis of Federal Highway Administration data, the average annual cost of wear and tear on your car due to rough city streets and highways is $400 a year (TRIP Sept. 22).

TRIP's report shows that San Jose, Honolulu and Los Angeles top the list of U.S. cities with more than 60% of road pavement in poor condition. As a result, drivers in those areas can expect to pay extra annual operating costs of more than $700 a car.

As if that news weren't bad enough, the prospects for short-term improvement appear dismal. The Department of Transportation estimates that planned expenditures for the next 15 years are $189 billion short of what's needed to keep streets and roads in their current condition. Making improvements will require an additional $375 billion.

While you wait for Congress and taxpayers to address those needs, here are some things you can do to minimize year-round pothole damage to your car, courtesy of the Credit Union National Association's Center for Personal Finance:

• Keep your car in shape. Resist the impulse to underinflate your tires, thinking they'll smooth your ride. Tires with less than proper pressure wear out faster and may cause expensive wheel damage. Letting your car's shocks and struts go soft can be dangerous, too; a sloppy suspension reduces your car's traction and braking ability.
• Slow down. Because force equals mass times velocity, doubling your speed doubles the amount of impact your tires and suspension must absorb. Driving slower also gives you more time to take evasive maneuvers if necessary.
• Try alternatives. Don't let force of habit blind you to choices that will prolong the life of your car. Reroute your daily commute to avoid particularly bad stretches of road. Carpool and split the cumulative wear and tear with a co-worker. Better yet, cut down on short trips and use a bicycle or public transportation when convenient.