Traditional and Roth IRAs are the widely preferred investment plans as both these plans offer to allow the income to grow tax free by deferring the taxes. The amount deposited in the IRA accounts are levied with no taxes on the dividends or capital gains made through its contributions.
Merits of Traditional IRA:
Anyone who has an earned income is allowed to contribute with a maximum limit of his annual earned income. An individual is not compelled to any one type of investment and is free to choose from a range of options like stocks, annuities, mutual funds, bonds, etc. The investment grows tax-deferred until retirement at the age of 59.5 which gives an advantage of paying less taxes if the tax bracket is lower ate the time of withdrawal. The contributions can be made right until mid-April of the next financial year to make payments into IRA giving a longer period to add savings to the account.
De-merits of Traditional IRA:
Once the age of 70.5 years is crossed, one is compelled to take the Required Minimum Distributions (RMDs) failing which heavy penalties will be charged.
This plan may not be useful to save tax if already covered by another retirement plan at work based on the income slab and tax rates.
A high penalty of 10% will be levied in case an individual chooses early withdrawal before 59.5 years of age.
It restricts the investment towards certain insurance contracts, precious metals, antiques, etc.
Merits of Roth IRA:
It offers many early withdrawal plans like withdrawing up to $10,000 for first time home buyers, for paying study expenses of self or dependents, etc. The contributions into this IRA is made after amount after being taxed at salary/income source. There are no fixed withdrawal deadlines and hence the amount can indefinitely be allowed to grow indefinitely. In case of early withdrawals, the contribution amount can be withdrawn penalty free if the Roth account has been at least five years old and the individual is 59.5 years of age.
Demerits of Roth IRA:
The contributions to this plan are not tax-free as compared to traditional IRAs. As these form a part of gross income, it puts an individual in a higher tax bracket or makes him ineligible for several related tax benefits. The contributions toward these IRAs are limited to certain limits which restricts the amount that can be invested if the income grows beyond the eligible limits. The tax on contributions can become a burden if an individual on a higher tax bracket is trying to convert a portion of his Traditional IRA into a Roth IRA by requiring him to pay large amount towards a one-time tax deduction.
Each IRA has its own advantages and disadvantages. One must be wise to choose the IRA plan based on his financial situation and after consulting a financial expert to talk him through the various conditions considering the individual’s capabilities.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.