Go bank shopping online
From time to time, Kathy Kristof answers questions from readers. This is one of those times.
Dear Kathy: Can you guide me to a bank that pays the highest interest? What I would like to do is put in a good lump sum and also be able to pay my bills through this account.
Answer: The best savings rates are always a moving target because banks change the rates they pay based on market conditions and their need for cash. That’s why I’d prefer to lead you to a good Web source for rates rather than a specific bank. The great thing about Web sources is that they regularly update their data and often provide links to the banks’ websites so you can open an account online.
My favorite rate-shopping site is BankRate.com. At the top of its home page is a series of tabs, each labeled with a different type of bank account or product. Clicking on the “Checking & Savings” tab brings up a chart that shows the national average rates for different types of checking and savings accounts. You can either click on the type of savings account you want -- such as checking or money market account -- or go to the bottom of that chart, where a link allows you to search for rates in your area.
You’ll get another prompt that asks whether you want the site to sort the information by interest rate, state or type of account, such as traditional checking or Internet-based checking. The rates you see may vary dramatically depending on how you sort the data.
For instance, a recent search showed that EverBank was offering an interest-bearing checking account with a 3.4% rate. But if you searched for money market accounts that offer check-writing privileges, the same bank offers a 5% rate. Just make sure your needs suit whatever restrictions are on the account.
I should note that BankRate.com makes its money from advertising by banks seeking your business. But banks don’t have to buy an ad or pay a fee to be included in BankRate’s rankings, says Greg McBride, a BankRate Inc. analyst. Any bank that offers deposits in all 50 states and whose rates are available to new customers is included. A bank does have the option to pay for a link to its website from BankRate, but that doesn’t affect the bank’s place in the rankings, McBride says.
Dear Kathy: I recently got my Equifax credit report and FICO score for the first time. My score is 757, which FICO says is “very good.”
Under “Key Factors Affecting Your Score,” the report mentions “the length of time your accounts have been established is relatively short.” (Only time will improve that!) And “The amount owed on your accounts is too high.”
That last statement has me confused. I have two revolving accounts, which I pay off every month. I have never carried a balance. On my older account, which is about 3 1/2 years old, I have a credit limit of $500 and a typical current month’s balance of $46. On my other account, I have a limit of $22,000 and a current balance of $309. Together, my combined balance of $355 is only 1.6% of my combined credit limit of $22,500. How can a balance that uses up such a small part of my available credit possibly be considered “too high?”
Yes, I realize that my score of 757 is already good. But having made the effort to get as high a score as possible, it irks me that I am being penalized, if only by a few points, for supposedly having too high a balance.
Answer: The FICO model is always going to tell you something that you can do to improve your score, but when it resorts to saying your balance is high when you’re using just 1.6% of your outstanding credit, it’s “scraping the bottom of the barrel” for score-hiking advice, said Craig Watts, a spokesman for Fair Isaac Corp., which designed the FICO scoring model.
The biggest factor that affects your score is time, he added. You’ve obviously been extremely responsible with credit during the nearly four years you’ve been using it. If you keep it up, your score will naturally rise as you establish a longer credit history.
But don’t stress about it. Once you hit a score of 750, you’re already getting nearly every lender’s best rates. Boosting your score above that level might be good for your pride, but it’s kind of like getting an A++ instead of an A+ in high school. That second plus is cute but doesn’t mean much.
Also realize that a credit score is merely a snapshot of a moment in time. You could get another score tomorrow and it might be a bit higher or a bit lower, depending on your balances when the report was run.
Dear Kathy: I read your story on earthquake insurance and retrofitting and wonder where I could find a contractor who could shore up my chimney and check to see whether we should be doing anything else to protect our house from a quake.
Answer: I posed your question to Richard Hess, a structural and civil engineer in Los Alamitos, who suggests that you start searching the Yellow Pages or the Internet for contractors. (The phone book has a category for contractors who specialize in “alterations, foundations and framing.”) Interview several to see whether they’ve done quake retrofitting. When you’ve narrowed your search to a just a few contractors, check them out with the Contractors State License Board at www.cslb.ca.gov.
If your house needs more than anchor bolts or a little bracing, you may need to hire an engineer, he said. (They can be found in the Yellow Pages under “Engineers -- Civil, Structural or Consulting.”) Again, check them out to make sure they’re licensed and experienced. In this case, the licensing agency can be found at www.dca.ca.gov/pels.
If you want a referral to a structural engineer, Hess recommends www.seaint.org, the Structural Engineers Assn. International website.
Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof@latimes.com. For past Personal Finance columns, visit latimes.com/kristof.
