Pros

• On-time payments reported to all three major credit bureaus
• No-credit-check option available
• Low payments that can be set to match your pay schedule.

Cons

• Credit score improvements are not guaranteed
• Not available in all states

What you need to know about a SeedFi personal loan

SeedFi is a financial services company offering loans that can help you build credit. It offers two options: One helps people save money and potentially build credit at the same time; the other is designed for people with an immediate financial need who also want to build credit.

We’ll delve more into those options.

Credit Builder Prime

SeedFi’s Credit Builder Prime aims to help people who want to build credit and don’t need money right away. No credit check is required.

When you sign up, SeedFi opens two savings accounts and a line of credit in your name. You choose the amount you want to pay toward the line of credit each pay period, starting with at least $10, and pay no fees or interest.

There’s no fixed term length, which adds to the plan’s flexibility. Instead, every time you save $500, you can either access that $500 or keep it and earn interest on the balance.

SeedFi reports payments to the three major consumer credit bureaus, which may help improve your credit.

Borrow & Grow Plan

SeedFi’s Borrow & Grow Plan is designed for people who need money upfront and want to start building a good payment record as well as their savings. If approved, you’ll get some loan funds immediately while the rest goes into a dedicated savings account. You’ll receive the balance of the loan once it is repaid in full. Borrow & Grow could help you build credit, as your payments are reported to the three main credit bureaus.

Loan amounts range from $1,750 to $8,000 with $300 to $4,000 available right away. Payments start at $50 per pay period, with loan terms ranging from 10 to 48 months. APRs range from moderate to somewhat high. Your actual APR is made available “as part of the online application process.”

A closer look at SeedFi credit-builder loans  

Here are a few other important details to know about SeedFi.

• Not available in all areas — To apply for one of SeedFi’s products, you’ll need to live in a state where it operates. SeedFi is available in the District of Columbia and all states except Connecticut, Hawaii, Idaho, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming.
• Fees — SeedFi doesn’t charge interest or fees on the Credit Builder Prime plan. There’s a fee up to $15 if you’re late on a Borrow & Grow Plan loan payment, but you get that fee back after repaying the loan.
• Credit check — SeedFi runs a soft credit inquiry when you check Borrow & Grow offers, so your credit won’t be affected. If you submit an application, SeedFi runs a hard credit inquiry, which can negatively affect your credit. There’s no credit check when applying for the Credit Builder Prime plan.
• Funding time — Credit Builder Prime funds can be accessed once your savings account hits $500. With a Borrow & Grow Plan, the portion of your loan that’s available immediately typically arrives “within a couple of business days,” according to the company’s website. (Keep in mind that the exact timing will depend on your bank.) The rest is available after you’ve repaid the loan.

Who is a SeedFi loan good for?

SeedFi doesn’t perform a credit inquiry when you apply for the Credit Builder Prime, so this option may be one to consider if you haven’t established credit yet or you’re having trouble getting approved for a loan elsewhere. There’s a hard credit check when applying for the Borrow & Grow Plan personal loan, though you can get prequalified and check your rate without affecting your credit. SeedFi reports payments to the credit bureaus, which could help you build a record of positive payment history.

You should also consider how quickly you’ll need money before applying. You can access a limited amount of cash right away — $300 or more with the Borrow & Grow Plan, but nothing initially with Credit Builder Prime — so that option might not cover an emergency at the outset.

How to apply with SeedFi

Applying for a personal loan is typically straightforward. SeedFi says its application takes about 10 minutes and can be completed on a desktop computer or a mobile device.

Applicants will need to …

• Be 18 or older, or the age of majority in their state
• Have a Social Security number or individual taxpayer identification number
• Have a U.S. bank account
• Have a verifiable phone number that can receive text messages
• Earn at least $10,000 per year
• Live in one of the states where SeedFi operates

Keep in mind that the application process is slightly different for each plan.

Not sure if SeedFi is right for you? Consider these alternatives.

• MoneyLion: MoneyLion may be a good option if you don’t need to borrow much and you want to build credit.
• Earnin: Earnin may be a good option if you need to borrow a small amount immediately and you’re less focused on building credit.

Credit One Bank American Express® Card: Core features

The Credit One Bank American Express® Card may be able to help people with fair credit improve or build a credit history.

Who this card is good for

If you have fair credit and are looking for a card that offers perks like cash back, travel insurance and retail protection, along with exclusive access to some lifestyle benefits from American Express, the Credit One Bank American Express® Card may be a good fit for you. But if you don’t want to pay an annual fee, you might want to consider another card.

This offer is no longer available on our site: Oportun® Visa® Credit Card

Pros

• No credit history required
• Can help establish credit
• Credit line up to $1,000

Cons

• High APR
• No rewards program

From our partner

Oportun® Visa® Credit Card

Oportun® Visa® Credit Card

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From cardholders in the last year

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The Oportun® Visa® Credit Card: A plain card with potential

The Oportun® Visa® Credit Card is a bare-bones credit card that might be able to help you build credit. You don’t need a credit history to qualify, but the card doesn’t come with any rewards.

No credit history required

If you’ve never borrowed money or taken out credit before, it can be difficult to qualify for a credit card because lenders don’t have a way to check how you’ve managed debt in the past. Oportun will check your credit reports when you apply.

But Oportun doesn’t require applicants to have a credit history to qualify for the card. This can be helpful if you’ve been locked out of credit in the past because of a limited credit history.

Credit line up to $1,000

Oportun says you’ll have a credit limit of up to $1,000, depending on the information you provide on your application. 

High APR range

The Oportun® Visa® Credit Card has a variable purchase APR of 29.9%, which is on the high end when compared to other credit cards. Late payments will cost you up to $35, too.

What else to know about the Oportun® Visa® Credit Card

Here’s some more information about the Oportun® Visa® Credit Card that you may want to consider.

• Ability to prequalify — You can check to see if you qualify for the card without affecting your credit scores.
• No rewards program — This card doesn’t offer points or cash back for making purchases.
• Not available in all states — Check to see if the card is available in your state before applying.
• Flexible payment options — Cardholders can make payments online, over the phone, by mail or in person using cash at any MoneyGram location.
• Bilingual customer service — Need help? Oportun offers customer support in both English and Spanish.

Who this card is good for

The Oportun® Visa® Credit Card might be a good fit for people with limited or no credit history. And since your payment history will be reported to the major credit bureaus, having this card and keeping it in good standing can help you establish positive credit. But to apply for the Oportun® Visa® Credit Card, you’ll have to live in a state where it’s offered and be willing to pay a higher APR. 

Not sure this is the card for you? Consider these alternatives.

• Credit One Bank® Platinum Visa® for Rebuilding Credit: This card is good for people who want to earn rewards on purchases like gas and groceries.
• First Progress Platinum Prestige Mastercard® Secured Credit Card: You may be approved for this credit card even if you don’t have a credit history.
• Petal® 1 Visa® Credit Card: This card offers a potential credit limit increase.

A derogatory mark may plague your credit reports for the better part of a decade, but there are still ways you can work to improve your credit.

Derogatory marks are negative, long-lasting indications on your credit reports that generally mean you didn’t pay back a loan as agreed. For example, a late payment or bankruptcy appears on your reports as a derogatory mark. These derogatory marks generally stay on your credit reports for up to 7 or 10 years (sometimes even longer) and damage your scores.

If you have a lower score coupled with a derogatory mark, you may have a hard time getting approved for credit or may get less-than-ideal credit terms. But the good news is that the impact to your credit of all derogatory marks decreases over time.

How do derogatory marks impact my scores?

A derogatory mark will damage your credit scores. But how much? That depends on a few factors.

A derogatory mark typically affect a higher score more than it will a lower score. Also, a minor derogatory mark, which can be caused by a late payment, generally damages your scores less than a major derogatory mark, which can be caused by something like a foreclosure.

The amount of time a derogatory mark stays on your credit reports depends on what type of mark it is. The chart below covers the different types of derogatory marks and how long they will likely remain on your credit scores.

What leads to a derogatory mark?

Here are the financial events that can lead to a derogatory mark and how long it might stay on your credit report.

How long can a derogatory mark impact my credit scores?

Derogatory marks can remain on your credit for up to seven to 10 years or more, depending on what type it is. However, your scores can start improving before that if you take steps to make your credit healthy over time. That can include making at least the minimum payment on time and keeping your balances low.

Bottom line

If you have a derogatory mark on your credit reports, it will remain there for several years and can damage your scores. But you can be proactive about making healthy credit moves.

Check your credit reports regularly, question and dispute errors on the reports, start rebuilding your credit and then let time take care of those derogatory marks.

If you’re planning to take out a loan, rate shopping makes sense if you want to compare offers and identify the best terms for your situation. The downside? It could bruise your credit.

Lenders will typically conduct a hard credit inquiry when you submit your application — and an influx of these inquiries on your credit reports may temporarily ding your credit scores.

What’s the purpose of rate shopping?

Rate shopping — the process of gathering quotes from multiple lenders and comparing offers — can help you spot better loan terms and potentially save money on interest.

Does rate shopping hurt your credit?

Because rate shopping often involves applying for several loans within a short time frame, this practice can potentially ding your credit — at least temporarily. But it depends on whether the lender does a soft or hard credit pull. 

Do soft credit pulls affect your credit scores?

Soft inquiries won’t affect your credit scores. This type of inquiry can occur when a lender prescreens you for a loan or credit card. This might happen if you apply for prequalification for a credit card, auto loan or personal loan, for example. Keep in mind that prequalification doesn’t guarantee loan approval — and your loan rate and terms may change after you submit a formal application.

How hard credit pulls affect your credit scores

Hard inquiries show other lenders that you’re looking to borrow money. These inquiries usually show up on your reports when a financial institution checks your credit as part of a lending decision. According to credit-scoring company FICO, a single hard inquiry may lower your FICO score by up to five points and remain on your credit reports for up to two years.

Tips for rate shop without hurting your credit

Do some research before you apply

Getting as much information as you can before you apply for a loan will help you weed out certain offers. Ask potential lenders about features such as the annual percentage rate, or APR, loan requirements, available loan terms and fees so you can begin to compare lenders.

If a lender offers the ability to apply for preapproval or prequalification without a hard credit pull, you get a sense of the estimated loan amount, terms and rates you might qualify for without affecting your credit. But keep in mind, you’ll still need to apply — and if you qualify, your loan terms could be different.

Limit your applications to a short window

Some credit-scoring models consider multiple inquiries within a 14-day window as just one inquiry.

But the exact window depends on the credit-scoring model the lender uses. For example, VantageScore 3.0 counts multiple credit inquiries within a 14-day window as just one inquiry, while newer FICO scores treat multiple inquiries as a single inquiry if you made them within 45 days. Since you probably won’t know which credit-scoring model the lender is using, it might be best to do all your rate shopping within 14 days.

Apply for only one loan type at a time

If you’re planning to take out an important loan soon, such as a mortgage, avoid applying for other types of loans at the same time. If you apply for other loans or credit, those hard credit inquiries will show up on your credit report as separate inquiries — even if you apply within the same 14-day time frame.

Next steps

Rate shopping could be a good move if you want to save money on your next loan. Your credit scores may drop slightly in the short term, but you could save a lot in interest and fees by comparing loan offers. Once you have the loan, you can continue building credit by making payments on-time and in full as well as keeping your credit utilization low. Only apply for credit you need and consider leaving your credit card accounts open to build a lengthy credit history.

If someone’s paid you with a check, you only have so long to cash or deposit it before you could run into problems getting the bank to honor it.

Maybe you tucked that check into a pocket and forgot about it, or you’ve been stuck at home for months — you know, because of a worldwide health crisis — and couldn’t figure out your bank’s mobile deposit process. If you delay cashing or depositing the check for too long, it could “go stale,” and you might be scrambling to cash it months later.

So, how long is a check good for? It can vary, but generally, checks older than six months may be difficult to cash or deposit. Follow this guide to learn why that is and what options you may have if you’re hanging onto an old check you want to cash.

• How long is a check good for?
• How long are different types of checks good for?
• What should I do if a check I received goes stale?
• What should I do if a check that I wrote hasn’t been cashed yet?

How long is a check good for?

Federal law doesn’t require banks to honor checks that are more than six months old. Beyond that, banks can set their own policies — some financial institutions will still process a stale-dated check if it believes the funds are still good. Others may refuse to honor it. That goes for checks you write and the ones you receive.

Businesses and government agencies may also set further time limits on a check. For example, they might add “void after 90 days” on a check to limit how long it can be cashed. But banks can choose whether to honor that date, too.

How long are different types of checks good for?

The type of check affects how long it’s good for. Here are some main examples.

• Personal check — Banks have no obligation to honor personal checks more than six months after the date written on the check. If you need to cash a check after that point, a bank can decide to either honor or decline it.
• Cashier’s check — There’s no set “expiration date” on these checks because it depends on the bank and the state where the bank operates. But a cashier’s check that sits too long may become subject to the state’s abandoned property laws.
• Treasury check — Government checks issued by the U.S. Treasury Department, such as federal tax refund checks and other government benefits, are valid for one year from their issue date.
• Certified check — These do not have an expiration date, but they’re subject to state laws regarding abandoned property.
• Traveler’s check — This type of check functions like cash, and you can buy them from a bank. These never expire.
• Money order — Domestic money orders don’t expire, but cashing one late could cost you. The issuing company may deduct a fee from the check amount if you don’t cash the money order within one to three years.
• Business check — Every business can decide how long the recipient has to cash the check. The business may put an expiration date on the check, and if you miss the time frame, you’ll need to ask the company for a new one.

What should I do if a check I received goes stale?

It’s a good idea to cash a check as soon as possible. But if you forget about it and the check resurfaces months later, you still have options.

First, look at the date on the face of the check. Was it written more than six months ago? Head to your bank and explain the issue. Some banks may be willing to cash a stale check. But the bank may not be able to cash older checks if the writer of the check closed their account, placed a stop order on the check or has insufficient funds.

In these cases, one option is to reach out to the check writer and ask them to reissue the check. If you’re not able to work things out with the issuer, you might consider talking with an attorney about getting a substitute check some other way, maybe by taking the issuer to small claims court.

Some checks are so old that they may fall under “abandoned property” laws. Financial institutions must hand over unclaimed money to the state after a certain period, usually five years. The state will hold on to the money until you file a claim for it that proves you’re the rightful owner of the property. 

What should I do if a check that I wrote hasn’t been cashed yet?

When you write a personal check, the recipient generally has six months to cash it. It can be a frustrating experience if the receiver waits too long: You might forget about your obligation to honor the check and risk an overdraft if there’s not enough money in your account.

Contact the recipient if it’s approaching the six-month mark and the check hasn’t been cashed yet. Figure out if they’ve been intentionally holding the check, misplaced it or just forgot about it. You may need to send a replacement check if the original one is missing. If you can’t reach the recipient, you may need to put a stop payment order on the original check — an action that could result in fees from the check recipient if they’re a creditor.

What’s next?

It’s a good practice to cash checks you receive as soon as possible. While you generally have six months to do so, it might be best to set a rule for yourself. For example, you’ll cash checks within one week of receiving them, then follow up to make sure the funds hit your account.

To avoid a bounced check (and accompanying check fees), be sure to balance your checking account regularly. Check your online account for transactions you may not recognize, and keep an eye on outstanding checks that haven’t been cashed yet. Being proactive about your account can help you keep any checks from going stale. 

A returned check is the paper equivalent of a declined credit card.

But while the worst result of a declined credit card might be a bit of embarrassment, a bounced check can have bigger consequences. Banks and the merchants generally can charge fees to handle returned checks, and you could even wind up in legal trouble.

But there are steps you can take to remedy a bounced check. Here’s what you can do if you wrote a bad check or you received one — and how to avoid this situation in the future.

• What is a returned check?
• What are some consequences of having a check returned?
• What should I do if I have a check returned?
• What should I do if I receive a bad check?
• Next steps: Tips to avoid bouncing checks

What is a returned check?

Generally, a returned check is one that a bank declines to honor — typically because there’s not enough money in the check writer’s account to cover the amount of the payment. You might know this situation as a “bounced check,” while the bank calls it “nonsufficient funds,” or NSF.

When might a check bounce?

When you don’t have enough funds in your checking account to cover a check, then the check can bounce. This is typically an honest mistake. For example, you may have forgotten that you scheduled an automatic payment, or an expected deposit didn’t hit your account in time.

There are other reasons a check might be returned. A financial institution may return the check if you ask the bank to stop payment, if the recipient tries to deposit it months after the date written on the front, or if you post-date a check. And if any critical information is missing on the check, such as a signature, the bank might reject it then, too.

Some people might intentionally write a check despite knowing they don’t have sufficient funds in their account to cover it. This is generally against state law.

What are some consequences of having a check returned?

Whether you intended to write a bad check or not, having a check returned can cause you trouble. Here are some of the problems you may encounter.

Bank penalties and consequences

Your bank may charge nonsufficient funds, or NSF, fees and take them directly out of your account, even if it causes your balance to dip below zero. NSF fees vary by bank, but a Bankrate survey found the average is around $33. The bank may also decide to close your account, which could hurt your chances of joining another bank or credit union.

Charges from check recipient

You’ll also likely owe a returned check fee to the merchant or person who received the check. Depending on the state, the recipient may charge you between $20 and $50 or a percentage of the check amount, according to payment processing company VeriCheck. The payee may also take other action, such as suspending a service.

Negative banking history

Generally, financial institutions don’t report returned checks to the national credit reporting agencies. But they may report bounced checks to specialty reporting agencies, such as Early Warning Services and ChexSystems. These agencies specialize in checking information. Having a negative record with these agencies may make it harder for you to open a bank account in the future.

Legal penalties

You might also find yourself in trouble with the law. In some states, intentionally writing a check without having the funds in your account could be considered a misdemeanor or a felony — and there are penalties. The details depend on local laws and the circumstances, such as the amount of the check and whether you eventually paid the money as agreed.

Potential credit hit

Financial institutions usually don’t report bounced checks to credit bureaus such as Equifax, Experian and TransUnion. But the payee might. For example, if the check was for a loan payment, the lender may treat it as nonpayment and could eventually report the missed or late payment to the credit bureaus. The negative information on your credit reports may lower your credit scores.

What should I do if I have a check returned?

If you wrote a bad check, it’s important to act right away.

1. Make a deposit to cover the payment and any bank fees. Merchants may submit bounced checks for payment more than once. Put money into your account to cover the amount in case the merchant resubmits the check. And you’ll want to have enough in the account to cover any bank fees that might arise.
2. Communicate with the payee. Hopefully, you can tell the payee you’ve made a deposit to cover the returned check and any associated fees. Or, if you’re not able to pay right away, you may be able to negotiate a payment plan with the payee. Either way, it’s important to communicate with the recipient to help minimize the negative impact of a bounced check.
3. Address bank fees. Banks can take fees directly out of your account. But you can ask your bank to waive the fees. It’s not obligated to let you off the hook, but if you’ve got a good history with your financial institution, it may make an exception. You’ll never know unless you ask.

What should I do if I receive a bad check?

The returned check could be an honest mistake — and in that case, it should be easy to sort out. But if you can’t get payment, the law is generally on your side. Here are some steps that may help you recover your money if you receive a bad check.

• Contact the check writer. Look for a phone number and current address listed on the check. Then, contact the check writer and ask them to pay the money as agreed. You may be able to work things out with a phone call. But if that doesn’t help and you think things are headed to court, you may need to send a letter demanding payment — some states require you to contact payors by mail when a check bounces.
• Try depositing the check again. Ask the check writer if it’s safe to redeposit the bounced check. Or, you can contact the bank on which the check is drawn to see if funds were added in the account to cover the payment.
• Seek legal action. If you still haven’t received payment, then you may need to take the check writer to court. The process varies by state or local law. In some states, you may be able to sue right away for the amount of the check. Or, you may need to send a letter before suing if you’re also seeking damages. Pursuing a criminal complaint may also be an option.

Next steps: Tips to avoid bouncing checks

You might not be able to do anything about a check that’s already bounced — except make good on the payment — but there are steps you can take to prevent this from happening in the future. 

• Balance your account. The best way to avoid returned checks is by monitoring your bank account to keep an eye on deposits, fees, automatic payments, debit card transactions, and other types of payments or withdrawals. Many banks offer online tools to help people monitor their checking accounts.
• Avoid post-dating checks. Your state may allow post-dating, or writing a check for a later date when you expect funds to hit your account. But banks and credit unions can deposit your check as soon as they receive it — they have no obligation to hold it, according to the Consumer Financial Protection Bureau. So it’s a good idea to write checks only when you know the funds are in your account.
• Opt into overdraft protection. When you opt into overdraft protection, you allow the bank to cover transactions even if it causes your balance to drop below zero. The bank will usually charge a fee for this service, which averages about $11. Without overdraft protection, the bank will simply decline the transaction — but the merchant might charge you a fee for the bounced payment.
• Link your checking account to your savings account. Linking your accounts will allow your bank to draw money from your savings account if you don’t have enough in your checking account to cover a transaction. But be aware that banks may charge a fee for linking accounts. And you’ll need to keep an eye on both account balances to ensure you don’t run out of funds in either.
• Keep a cushion. It can be difficult to keep track of the money coming in and out of your account, and mistakes are bound to happen. One way to prevent surprise overdrafts is to keep extra money in your account at all times.

If your car’s been repossessed, the good news is that you may be able to get it back. The not-so-great news? It takes time and money.

Your lender can take your car if you break the terms of your auto loan agreement, like missing payments or — in some states — failing to get enough car insurance. If your car hasn’t been repossessed yet but you’re financially squeezed, reach out to your lender immediately. It may be able to work out a more affordable payment plan with you so you can avoid a car repossession.

If you’ve been visited by the repo man already, you may be able to get the car back by catching up on missed payments, paying off the whole loan plus repossession costs or bidding on your car at auction. Read on for ways you may be able to get a car back after repossession.

• Can I get my car back after a repossession?
• How much will I have to pay after a repossession?
• Can I get my personal property back after a repossession?
• Next steps after a car repossession

Can I get my car back after a repossession?

A car repossession can be a double setback — it leaves you without a way to get around and can damage your credit. You may be able to get your vehicle back, but you’ll likely need to come up with some cash first. Contact your lender to understand your options. State laws vary, but here are some options you may have.

Reinstate the loan

In some states, you may be able to reinstate your loan, which means bringing the loan current by paying the past-due amount, plus any costs associated with repossession, like towing and storage fees. The lender should tell you how much is due and give you a timeline to pay it, typically 10 to 20 days after your vehicle was repossessed. 

Depending on your financial situation, you may or may not be able to get enough money in such a short time frame. Before you try to gather the cash, consider whether you’ll be able to afford the car moving forward, taking into account both car payments and ownership-related expenses.

The average annual cost of owning a small sedan is about $7,114 per year, according to AAA’s 2019 Your Driving Costs report. If you own a large sedan, medium SUV or pickup, the annual cost rises to more than $10,000. If your budget is too tight to fit loan payments, insurance, fuel and maintenance, you could wind up in this situation again down the road.

Redeem your loan

Your lender may also let you redeem your loan, which means you pay the full amount you owe. Be prepared to cover your past-due payments, the remaining balance on the car loan and any costs related to the repossession, such as towing and storage. Ask the lender for the payoff amount and a list of the repossession costs.

This option is more expensive than reinstating the loan, since you’re paying off the outstanding balance with a lump sum. Once the loan is redeemed, you won’t have monthly payments. But you’ll still need to insure and maintain the car, so consider whether you can afford these costs before going this route.

Buy back your car at auction

If neither of these options works for you, your lender may keep the vehicle as compensation for your debt or resell the car to recoup its losses. 

In some states, your lender must let you know about its plans. If the lender plans to sell the repossessed car at a public auction, it may be required to tell you the time and place so you can attend and bid on the car. The same goes for a private sale — the lender may need to disclose the date of the transaction.

How much will I have to pay after a repossession?

How much you have to pay after a repossession depends on whether the lender sells your car and how much it gets in the deal.

If your lender sells your car for less than what you owe, you may have to pay the difference. This is known as the “deficiency balance,” and it includes the remaining loan balance, missed payments, interest and any repossession fees. For example, if you owe $7,000 on the car loan and the lender sells it for $5,000, you’d be on the hook for paying the $2,000 difference plus any loan fees you owe.

If the lender sells the car for way less than its fair market value, this could be a sign that the sale wasn’t done in a “commercially reasonable manner,” and you may be able to dispute the high deficiency balance in court. On the flip side, if the lender sells your car for more than you owe on your loan, plus any repossession costs, you’re entitled to the surplus.

Your financial situation could take a turn for the worse if you can’t pay the deficiency balance. The lender may charge off the debt or send it to a debt collection agency, which will contact you to get the debt. Both the collection account and the repossession would show up on your credit reports, which can hurt your credit. In a worst-case scenario, the auto lender or collections agency could take legal action against you to get the money.

Can I get my personal property back after a repossession?

In most states, the repossession company must allow you to pick up anything you left inside your car — though you’ll need to arrange a time that works for the repossession company.

Start by checking the laws in your state, then contact the repo company or your lender to ask about the process. In some states, the company may charge you a “reasonable” storage fee, but the Consumer Financial Protection Bureau recommends seeking legal advice if the lender or repossession company demands payment in exchange for returning your personal items.

It’s a good idea to make your own list of what’s in your car, along with estimated values. When you pick up your items, make sure everything’s there and check for damage.

It’s also worth noting that a repossession agent can’t commit a “breach of the peace” when taking your car. If, for example, your garage door was closed at the time of repossession and the repossession company damaged the door by forcing it open, the company may need to pay a penalty or compensate you fairly for your property. 

Next steps after a car repossession

It’s important to know your rights after your car’s been repossessed. If you have questions about your rights or your state’s consumer protection laws, reach out to your state attorney general, state consumer protection office, a local legal services office or a private attorney.

The repossession process can be difficult and could leave you feeling powerless. Take action by focusing on rebuilding your credit. A repossession can stay on your credit reports for up to seven years and cause your credit scores to drop. But making on-time payments, paying down debt and limiting the number of new credit accounts that you open are some of the things you can do to build up your credit. 

After a loved one dies, unpaid medical bills are probably the last thing you want to think about. But if a bill collector contacts you about medical bills after the death of a loved one, you may wonder if you have to pay.

Generally, any debts a deceased person leaves behind get paid out of the individual’s estate. If there’s not enough money or assets in the estate, debts typically go unpaid. That means relatives are usually not required to pay their deceased loved one’s debt — but there are some exceptions. For example, surviving spouses in community property states may have some responsibility to pay off debts (more on that below).

Looking specifically at medical debt, your obligations may depend on your relationship to the deceased and the laws in the state where your loved one lived.

• Who’s responsible for debt after death?
• Do I have to pay my spouse’s medical debt?
• Do I have to pay my parent’s medical debt?
• What can I do about debt collectors?

Who’s responsible for debt after death?

When someone dies, they may leave an estate, which is generally all the money and property the person owned when they passed away. If the deceased person had debts, they’ll be paid out of the estate, either through any bank accounts the person had or by selling their assets.

An executor (someone named in the deceased person’s will to handle their affairs) will be responsible for ensuring the bills get paid out of the estate. In cases where the deceased person didn’t have a will, the courts may appoint an administrator or someone else to do the job.

The executor must prioritize debts for payment based on federal and state laws. If there isn’t enough money to cover the debts, creditors may look for someone else to pay the bills. But, in most cases, no one is legally obligated to use their own money to pay off a deceased person’s debts.

There are exceptions, though.

You may be liable for a loved one’s debt if …

• You co-signed for the debt, such as a loan.
• You’re a joint account holder for a credit card. This would make you responsible for paying off any balance. If you’re simply an authorized user of the credit card, then you usually won’t have to pay for the credit card debt.
• The deceased person was your spouse and you live in a community property state — or the deceased was your parent and state law requires you to pay a certain kind of debt, such as healthcare costs. (More on this shortly.)
• You were the executor, or other responsible representative, of an estate and you didn’t follow state probate laws as required.

What is an ‘insolvent estate’?

If the deceased person’s debts exceed the value of the assets in the estate, it’s considered an “insolvent estate.” Because there’s not enough money in the estate to pay the medical bills and other debts, those debts may go unpaid.

Do I have to pay my spouse’s medical debt?

If your spouse passes away with medical debt, will you be responsible for it? That depends on many factors, including the state where you lived as a married couple.

If you are the executor or responsible person for your spouse’s estate, it’ll be your job to pay their debts out of their estate. 

And if you and your spouse resided in a community property state, you may be personally responsible for paying your late spouse’s debts, including medical debts, whether or not their estate can cover them. That’s because in community property states, most assets gained and debts incurred by one spouse during the marriage are owned or owed by the marital “community,” or both spouses. 

Community property states include Alaska (if a special agreement is signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Oklahoma (if a special agreement is signed), South Dakota, Tennessee, Texas, Washington and Wisconsin.

But if you don’t live in a community property state, and your late spouse’s estate isn’t sufficient to cover their debts, in most cases you won’t be responsible for your spouse’s remaining debts, including medical debts.

Do I have to pay my parent’s medical debt?

If you share responsibility with your parent for a debt — such as co-signing a loan or a nursing home contract — you may be responsible for that debt after your parent passes away. But in some states, it’s also possible (but highly unlikely) that an adult child could be held responsible for paying their deceased parent’s unpaid medical bills even without shared responsibility for the debts.

That’s a scary prospect, but don’t panic. The first thing to know is that this depends on whether your parent died in a state with a filial responsibility statute or filial support law.

Under these laws, adult children may be held responsible for financially helping a parent who can’t support themselves, including paying for their medical care. Some of these laws even extend to close relatives, meaning adults could be expected to care for others in their family.

But while many states still have laws like these on the books, there’s little uniformity in how they apply. And some states may make exceptions for adult children who can’t afford to pay their parents’ debts, or if the parents abandoned the child when they were a minor.

Other states may simply not enforce their filial support laws.

If you live in a state with a filial responsibility statute and have a deceased parent who left behind medical or healthcare debt, it may be a good idea to talk to an attorney about what your obligations could be.

Also, if your parent received Medicaid, the program can seek repayment for certain services from the time your parent was 55 until death. The state where your parent died may try to recover the payments, but it can only recover the money from the assets, if any, in your parent’s estate.

Can a creditor seize a deceased person’s life insurance to pay a bill?

Probably not. Assets like life insurance policies, which pay out to beneficiaries, generally aren’t included as assets for estate purposes. So when an insured person dies, the payout from the policy belongs to the beneficiary of the policy, and not the deceased person’s estate.

What can I do about debt collectors?

Although debt collectors can contact the parents of a minor child, a spouse, a guardian, or an executor or administrator to discuss a loved one’s medical debt, they must follow rules under the Fair Debt Collection Practices Act.

This means they can only contact you during certain times, and they must end communication with you if you make that request in writing. This won’t relieve you of debts if they’re your responsibility, but you can ask the debt collector to work only with your attorney.

Also, check your credit reports to see whether the debt collector improperly reported your spouse’s debts under your name. Contact the credit reporting company and dispute the information. You can also file a complaint about the debt collector with the Federal Trade Commission.

What’s next?

Medical debt doesn’t disappear when a person passes away. Usually, medical debt, along with other debts, will be paid out of the person’s estate. But if the deceased person didn’t leave sufficient assets to cover all their debts, bill collectors in some cases may look for someone else to pay.

If a debt collector contacts you about someone else’s unpaid medical debt, it’s important to know your rights and responsibilities.

Here are some steps to take.

You can ask for proof the deceased person owed the debt and why the debt collector believes you’re responsible for it. You can also ask an estate law attorney to help you determine if you’re responsible for the debt. Some attorneys offer free or reduced-cost legal advice, so look for legal aid offices or legal clinics in your area.

If you’re legally accountable for paying the bill, the creditor may be willing to negotiate a lower payment, waive fees or put you on a payment plan. You may also be able to deduct the medical expenses on your taxes.

A general credit counselor may also be helpful.

When you’re looking to get a new set of wheels, you may be anxious to get rid of your old car — even if you still owe money on it.

But trading in a car with a loan could cost you if you have negative equity, meaning you owe more on your loan than your car is worth. Let’s take a look at your potential options — whether you have positive or negative equity — and how to trade in a car with a loan balance.

• Can I trade in my car if it’s not paid off?
• How do you trade in a car with a loan?
• Alternative to a trade-in
• Ask an expert about trading in a car with an outstanding loan

Can I trade in my car if it’s not paid off?

In general, you can trade in your car for a new one even if you’re still making payments on it. But first it helps to know how much equity you have in the vehicle. That’s the difference between your car’s current value and the amount you owe on the loan. Depending on those two factors, you have either positive or negative equity. If you have negative equity in your car, there may be some financial considerations to make before deciding to trade it in. Let’s dive into both types.

Positive equity

If your car is worth more than you owe, you have positive equity. As the name implies, positive equity is a good thing. When you trade in your vehicle, the dealer may apply any equity you have toward the purchase of the new vehicle. This reduces the amount you need to finance.

Negative equity

If you owe more on the loan than your car is worth, you have negative equity — and you’re not alone.

Looking at new-car sales with vehicle trade-ins in the last quarter of 2023, 20.4% were negative equity trade-ins, according to Edmunds data — with an average of $6,064 remaining on the loan. While it may be tempting to trade in your car with negative equity, it can be easy to get upside down on your new car loan. If your vehicle has negative equity and you want to trade it in, you’ll need to decide which is your best option.

• Roll the negative equity into your new car loan. While this option may be convenient, it increases your new loan amount, which means you could pay more in interest over the life of the loan. And going this route typically means borrowing more than your new car is worth, which puts you at greater risk of becoming upside down again. 
• Pay the difference between the trade-in value and your remaining balance. If you have the cash on hand, you can pay the difference between what you owe on your current loan and what the dealer is offering you for your trade-in. This can help keep your new loan amount lower.
• Delay the trade-in. You might also wait to trade in your car until you pay off your car loan or — at the least — are no longer upside down.

How soon can you trade in a financed car?

You can trade in a financed car any time, but you may want to wait a year or more — especially if you bought a new car. Cars depreciate over time. A brand-new car can decrease in value by 20% or more within the first year of ownership, then loses value more slowly in the following years. Depending on the size of the down payment you made on your loan and how quickly your car has lost value, you may find that you have negative equity in the vehicle almost immediately.

How do you trade in a car with a loan?

It pays to get a good trade-in value — the higher the amount, the more you can potentially use toward your new car purchase. Here are some steps to take. 

1. Collect the necessary documentation

You should always check what the specific required documents are for the dealer you’ll be working with. But you’ll likely need the information on your current car loan and a valid driver’s license to trade in your vehicle. Some other documents you may need to trade in your vehicle are your vehicle registration or your car’s history and maintenance reports.

2. Research the value of your trade-in vehicle

Knowing your car’s estimated fair market value can help you get a sense of what a dealer might offer on your trade-in and give you some negotiating power. Websites such as Kelley Blue Book and Edmunds have tools that can help you estimate your car’s trade-in value based on information including the year, make and model of your car, and the number of miles on its odometer.

To get a better sense of whether you have positive or negative equity, you should compare your car’s estimated trade-in value to your loan payoff amount. This includes your loan balance plus any interest and fees that have accrued, so it may differ slightly from your loan balance. Contact your lender to find out your payoff amount.

If you have positive equity, you can use what the dealer offers you for your trade-in to pay off your existing loan and use any leftover money as a credit toward the new car purchase. But if you have negative equity, you’ll need to decide whether to postpone your trade-in, pay down your existing loan or roll your loan balance into the new car loan.

3. Compare trade-in offers and negotiate

Contact a few dealers to get trade-in value estimates. If you feel a dealer is offering a low-ball price, you can negotiate using the car value estimates you researched. Getting multiple estimates can help you make sure you get the best deal for your situation.

Keep negotiations for the new car purchase and your trade-in separate. Some dealers may try to mark up the price of the new car to make up for a high trade-in amount. If you have negative equity and decide to roll your current loan balance into your new loan, be sure you understand the total loan amount, annual percentage rate, loan term and your new monthly payment before agreeing to a deal.

4. Close the deal

Once you’ve agreed on a value for your trade-in vehicle and the new car’s price, it’s time to close the deal. Read the sales contract carefully — it should spell out your new loan amount, the loan term, interest rate, monthly payment and any other spoken promises made during negotiations. It should also detail how any negative equity is being handled. Some dealers may advertise that they’ll pay off your car loan — no matter what you owe on it — and instead just fold the negative equity into your new loan.

Alternative to a trade-in

Trading in your car at the dealership isn’t your only option. You can also sell your car to a private buyer, though you may need to let your lender know first. While it may take longer, you’ll likely get more money for your car in a private sale than with a dealer trade-in, which could help offset any negative equity.

Ask an expert about trading in a car with an outstanding loan

Meet the expert: Brian Moody, executive editor for Autotrader, has more than 15 years of experience as an automotive journalist.

Is it a good idea to trade in a car when you’re paying off a loan on the same vehicle?

“Generally speaking, no. It’s not a good idea to trade in a car when you still owe money on the loan you purchased to buy that car. It is possible, but the dealership is simply going to add the remainder of the loan to the price of your new car. Make sure your loan allows you to pay it off early. If not, the dealership may pass that fee on to you.”

What should consumers be aware of when trading in a car with a remaining loan?

“Your new loan will simply roll the unpaid part of your old loan into the overall price of the car. That means you’re paying more for the car and for the financing.”

Do you have any negotiating power when trading in a car with a loan?

“Maybe. If you have a very popular and desirable model, that might help. Also, if you owe very little on the old car, you will still have some negotiating room. Remember, there’s no free money. The dealership is in business to make money selling things, not getting you out of a car where you previously overpaid.”

What’s next?

Understanding your car’s estimated value and how much you owe on it are important first steps in trading in a car with a loan. Trading in a car with negative equity could end up being an expensive move in the long run.

If you can’t afford to finance the car you want because you need to roll over some negative equity, consider trading in your current car for a less-expensive one. While you’ll still need to carry over the negative equity from your current auto loan, your total loan amount will be lower — and you may pay less in total interest on the loan.

This article was fact-checked by our editors and Jennifer Samuel, senior product specialist for Credit Karma.

Tax season, tax year, Tax Day — you may hear those terms a lot in the first few months of every year and wonder what they all mean

Tax season is the time frame when you typically prepare and file your federal income tax return, and it usually lasts from January to mid-April. Tax Day is the day your federal income tax return is due, April 15 for most people. The actual filing deadline can shift in any given year though, as a result of holidays, weekends and other circumstances. For example, in 2020, Tax Day was extended until July 15 because of the coronavirus pandemic.

Tax year may be a bit harder to grasp. While tax season is the period when you’re preparing to file your federal income tax return (with Tax Day being the day it’s officially due), the calendar year in which you earned the income you’re reporting is known as the tax year. Let’s take a closer look at the difference between tax season and tax year.

• When is tax season vs. tax year?
• Why is this important?
• What are some things to know about tax season?

When is tax season vs. tax year?

A tax year is a 12-month accounting period in which most taxpayers earn income, track expenses, and either pay taxes on that income or have taxes withheld from their paychecks. Most people treat the calendar year as their tax year, but there are situations when someone’s tax year can differ from calendar year.

The term “tax season” really refers to the tax filing season — the time frame during which you can file a tax return to report your income and expenses from the most-recent tax year and pay any remaining tax you may owe.

The tax season for the most-recent tax year begins when the IRS starts accepting and processing those tax returns, which can vary from year to year. In 2020, tax season for the 2019 tax year began on Jan. 27. While there’s nothing to stop taxpayers from filing earlier than the start date, the IRS will put those returns aside until processing officially begins.

The last day to file taxes, sometimes called Tax Day, is usually April 15 for most people (July 15 in 2020). The tax-filing deadline can get moved by a day or two each year if April 15 falls on a weekend or holiday.

Why is this important?

Understanding when tax season is can help ensure that you file on time or request an official extension if you need more time to file. And you’ll need to include information about the correct tax year on your return.

If you don’t file your income tax return correctly and on time, you could face IRS penalties and extra interest charges. Here are a few scenarios where you may be charged penalties or interest.

• You don’t file on time. The IRS can charge a penalty if you don’t file your return by the tax deadline (whether that’s April 15 or an extended due date). The penalty is typically 5% of the unpaid tax for every full month or partial month your return is late. But the penalty can be as much as 25% of the tax you owe.
• You may need to do your federal return before your state. Some states use federal adjusted gross income from your federal return as the starting point for calculating your state income tax obligation. And some states won’t accept a state return if their processing systems can’t verify that there’s a matching federal return.
• You don’t pay on time. Even if you get an approved extension for filing your taxes, you still must pay any tax you owe by April 15. If you don’t pay on time, the IRS charges a penalty of 0.5% of the unpaid taxes for every month or partial month that they go unpaid, up to 25% of the amount you owe.
• You don’t pay enough taxes throughout the year. You’re supposed to pay tax throughout the year — either through payroll withholding or quarterly estimated tax payments (or even both). If the payments you make throughout the year don’t add up to at least 90% of the total tax you owe for the current tax year, or 100% of the tax you paid for the prior year (whichever is less), then you could face an underpayment penalty unless you meet the criteria for a penalty exception.

What are some other things to know about tax season?

Understanding the difference between tax season and tax year is an important bit of knowledge. But like most things tax-related, there are additional things to know about how a tax season works.

What do you need for tax season?

Many people probably start thinking about their taxes in January. But you might not have all the forms you need to file your taxes at that point. That’s because businesses aren’t required to send W-2 and 1099 forms, two potentially essential forms for tax filing, before Jan. 31.

In January, be on the lookout for your tax forms and start gathering the documents you need to file taxes. If you’re filing your tax return electronically, you’ll also need a copy of the prior year’s tax return.

When should you file?

That’s really up to you, as long as you file before the deadline. There are several advantages to filing as early as possible, though.

• The IRS is less busy earlier in the season. That means it could potentially process your income tax return — and refund — quicker.
• The sooner you file, the sooner you can get any refund you’re owed. The IRS says it issues most refunds in about 21 days from the date you file. Your state tax refund will depend on your state, as each has its own timeline for issuing refunds. And keep in mind that the IRS says that e-filing, combined with having your refund directly deposited into your financial account, is the fastest way to get a refund.
• Filing earlier reduces tax ID theft risks. Tax identity theft, which occurs when someone files a fake tax return in your name, affects thousands of taxpayers every year. By minimizing the amount of time identity thieves have to act, filing early can help reduce the chances they will file using your Social Security number or taxpayer identification number before you do.

Refunds may be delayed for some filers

To reduce the chances of tax-related identity theft, the IRS may put certain taxpayers’ refunds on hold. For example, if you claim the earned income tax credit or the additional child tax credit, you might not get your refund until after mid-February in the year that you file. The IRS will hold your entire tax refund, not just the EITC or ACTC portion.

The IRS typically announces these rules ahead of tax season, so you can know what to expect. And you can always track your refund using the IRS “Where’s My Refund” tool.

Bottom line

Tax season normally consists of the first few months of each year, and you can file your return for the most-recent tax year at any time during the season — including the last minutes of Tax Day. But it’s not a good idea to wait until the last minute to think about your taxes.

The amount of federal income tax you pay throughout the year not only affects how much, if any, refund you’ll get but also how much money you take home in your paycheck each month. You can adjust the amount that’s withheld from your wages by updating your W-4 form.

Not sure what changes to make? The IRS Tax Withholding Estimator can help ensure you have the right amount of tax withheld from your paycheck.

Relevant sources: IRS News Release: IRS Opens 2020 filing season for individual filers on Jan. 27 | IRS: Tax Years | IRS News Release: 2017 Tax Filing Season Begins Jan. 23 for Nation’s Taxpayers, Tax Returns Due April 18 | IRS News Release: 2018 Tax Filing Season Begins Jan. 29, Tax Returns Due April 17; Help Available for Taxpayers | IRS News Release: Reminder: Oct. 15 deadline approaching for taxpayers who requested extensions | Social Security Administration Deadline Dates to File W-2s | IRS: Where’s My Refund? | IRS: Refund Timing for Earned Income Tax Credit and Additional Child Tax Credit Filers | 1040 and 1040-SR Instructions for 2019 Tax Year | IRS Tax Topic No. 306 Penalty for Underpayment of Estimated Tax | Form 2210 Instructions for 2019 | IRS Tax Withholding Estimator

Jennifer Samuel, senior tax product specialist for Credit Karma, has more than a decade of experience in the tax preparation industry, including work as a tax analyst and tax preparation professional. She holds a bachelor’s degree in accounting from Saint Leo University. You can find her on LinkedIn.

You may not know what a credit bureau is, but the credit bureaus probably knows a lot about you — more specifically, details about your financial life.

Credit bureaus are consumer-reporting companies that gather and compile your financial information. They sell that information to lenders, landlords, employers and others who use it to help them decide whether to offer you a lease, loan, job or other financial product.

While there are dozens of consumer-reporting companies across the U.S., many people have heard of the Big Three: Equifax, Experian and TransUnion. But why are these credit bureaus so important to your financial health? Read on to learn more.

• Why are credit bureaus important?
• What are the three main credit bureaus?
• What can credit bureaus do?
• What are some other credit bureaus?

Why are credit bureaus important?

Knowing how credit bureaus work can help you understand your overall credit and how to check that the bureaus are sharing the correct information about you.

Credit bureaus, also called credit-reporting agencies, don’t actually make lending decisions — their primary job is to gather information about you. That can include details about open credit lines, such as auto loans, mortgages, credit cards and student loans, and your payment history and monthly balances.

Credit bureaus can also check public records to see whether you’ve had any bankruptcies, civil lawsuits, foreclosure, tax liens or other types of collection accounts. All of this information is put into a statement called a credit report.

Lenders and other entities, such as employers, insurers and landlords, may be able to request your credit reports to help them get a picture of your credit history. But credit bureaus won’t give your information to just anyone. Thanks to the Fair Credit Reporting Act, companies must have a legitimate business reason, called a “permissible purpose,” for requesting your credit reports. 

It’s important to check your credit reports regularly to make sure there are no errors about your personal and financial information. This may also help you catch any fraudulent accounts opened in your name. (We’ll get back to checking your credit reports later on.)  

What are the three main credit bureaus?

The three main consumer credit bureaus are Equifax, Experian and TransUnion. Creditors, such as lenders and debt collection agencies, voluntarily supply the bureaus with consumer account information. Not all creditors report account information to all three bureaus, so your credit reports may not match exactly.

That’s also why your credit scores, which measure how likely you’ll be able to pay the creditor back in time, might vary. A credit score is based on the information in your credit reports, so if that info varies, then so will your credit scores. Credit-scoring companies FICO and VantageScore both calculate credit scores on a scale of 300 to 850. And take note: Industry-specific scores may follow a different scoring scale. A higher score typically indicates that your credit history is pretty positive, and it may show the creditor that you’re more likely than not to pay back your debts.

What can credit bureaus do?

Credit bureaus must follow the Fair Credit Reporting Act, which outlines several consumer protections. Here are some of the important ones to keep in mind.

• Disputes — If you see an error on your credit reports, whether it’s from a typo or potential identity theft, you can dispute the information. The credit bureau must verify, correct or delete the disputed information, usually within 30 days. With Credit Karma’s Direct Dispute™ feature, you can dispute errors on your TransUnion credit report.
• Negative information — Derogatory marks, such as late payments and civil lawsuits, can only be listed on a credit report for seven years. Bankruptcies may stay on your reports for up to 10 years in some cases. If the credit bureau doesn’t remove the information after this time frame, you can request to have it removed.
• Access to credit reports and credit scores — You can request a free credit report from Equifax, Experian and TransUnion at least once every 12 months. You can also request your credit scores, but you may have to pay for them.

What are some other credit bureaus?

Dozens of consumer-reporting agencies, sometimes called “specialty agencies,” collect different types of information about consumers. For example, some track information about your rental history, like whether you’ve ever been evicted, while other agencies track and report any insurance claims you’ve made.

The Consumer Financial Protection Bureau maintains a list of consumer-reporting companies with details about what information they collect and how to request your report. Here are just a few of them.

• National Consumer Telecom & Utilities Exchange — Gathers information about consumer utility accounts, such as connection requests and payment history
• Innovis — Offers credit reports that contain your personal info and credit history
• Experian RentBureau — Tracks rental-payment histories from property owners and makes it available for tenant-screening reporting companies
• ChexSystems — Gathers and reports information on checking and savings accounts
• LexisNexis C.L.U.E., or the Comprehensive Loss Underwriting Exchange — Collects insurance policy and claims information that insurance companies can use when setting your premiums

What’s next?

The CFPB recommends checking your credit reports at least once a year. But you can check your free credit reports from Equifax and TransUnion, along with your VantageScore 3.0 credit scores, at any time with a free Credit Karma account. You can also request a free credit report from each credit bureau every 12 months at AnnualCreditReport.com.

The credit bureaus collect a lot of info about your financial life, but understanding how they work and how to read your credit reports can help you stay on top of your credit.