By EMMET PIERCE
Moving can be difficult and stressful, but it's essential to put your financial house in order before you change addresses.
This is especially important for people who move frequently, such as military personnel and their families.
If you move without ensuring your bills are paid in full, your unpaid debts could damage your credit rating, warns Mikel Van Cleve, director of personal finance advice at USAA, an insurance company that offers services to former and current members of the military and their families.
How moving can affect your finances
When creditors report your delinquent payments - payments that arrive after their due date - to credit reporting companies, it can lower your credit score, Van Cleve says. This can make it difficult for you to obtain loans or open new credit card accounts.
Cary Siegel, the author of "Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By" says a record of late payments will follow you when you move to a new location.
In addition, most states allow insurers to use your credit information as a factor when setting rates for auto, homeowners and renters insurance policies.
Tips for getting your finances in order before you move
Here are five tips for making sure your finances are in order before you move.
1. Review your credit reports.
When you move, your credit history and score may be a part of setting up your new life. For example, if you're applying to rent an apartment, your landlord will likely check your credit.
If you have to switch auto insurance because your insurer doesn't serve your new state, your new auto insurer may base your rate on your insurance score, which is based on your credit history.
By reviewing your credit report and scores, you can determine whether your credit health is in good shape before you make these changes.
Credit Karma offers free access to your Equifax and TransUnion credit reports anytime.
2. Set aside money for out-of-pocket moving expenses.
As soon as you think you'll be moving, start setting aside money for such things as rental home deposits, a moving truck, and costs like groceries and gas.
He recommends setting aside at least $1,000 in cash for a move within the U.S and $3,000 for an overseas move.
3. Set up a forwarding address.
Before you move, set up a forwarding address with the U.S. Postal Service so bills will be sent to your new address. This will reduce the risk of overdue debts being turned over to collection agencies or recorded on your credit history.
"You want to make sure the people you owe money to know how to reach you," says economist Eric Tyson, author of the book "Personal Finance for Dummies."
Also, if bills are sent to your old address, someone could use the information they contain to attempt to steal your identity and apply for credit cards in your name.
4. Contact utilities and service providers.
Don't forget to contact your cable, water and electricity providers well before your move so these utilities will be discontinued. If you forget to do this, the new residents may run up bills on your accounts, Tyson warns.
"You don't want to get stuck with somebody else's bill," he says.
Siegel says you should keep a written record of your conversations when you call utilities and cable companies to discontinue services.
"Make sure you write down whom you spoke with and when you spoke with them," he says. That way you have written record of your actions if you're later challenged.
5. Contact your insurance company.
It's important to let your insurance company know when you move, Siegel says. Your auto insurance may cover you if you move to a different city, but it may not if you move to a different state. Regardless, you'll need to notify your carrier of your change of address so you'll continue to receive bills and correspondence.
Be aware that where you live is often one of the factors used to set your car insurance rate. For example, if you move into a neighborhood with fewer traffic accidents, your insurance rates may drop. However, if you move to a neighborhood with a high rate of car theft, your rate may increase.
If you have a renters or homeowners policy, you will also need to notify your insurer about your move so that they can make any necessary changes and update your contact information.
Moving can be stressful and hectic, but it's important to take some time to put your finances in order before you leave. If you fail to do so, you could miss paying bills and risk damaging your credit history.
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