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| Top Tips |  Column archive |
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Managing credit scores, 401(k)
Gerri Willis answers reader's questions about 401(k) plans, bank versus credit unions and credit scores.
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| For more information on managing your largest investment, check out Gerri Willis' "Home Rich," now in bookstores. |
NEW YORK (CNNMoney.com) -- 1. Recently one of my credit card companies reduced my credit limit by half. I pay more than the minimum payment each month. What else can I do to keep my score up during these hard times? - Mike, Florida
More and more credit card companies are cutting credit limits on customers. And that can hurt your credit score-especially if you charge up to half of the limit. Make sure you note the limits, the due dates and any added fees or conditions that may have been tacked onto your cards.
Good job on paying more than the minimum. What you really want to do is prioritize your credit cards so that you pay off balances on the highest interest credit cards first. Spread out your balances on a few cards from time to time. This way, credit card companies can't close down your account for inactivity.
2. We have a 401(k) plan and 100% is in the company stock. I have heard we need to diversify, and we agree. But we have no idea who to trust. Any ideas? - Twilla
You're right. Having your entire portfolio in company stock is NOT a good idea. That's because you are doubling your risk. Not only are you vulnerable to your company's stock not doing well, but if your company goes bankrupt, you'll be left with nothing. Consider spreading your risk out by investing in different stocks and bonds.
If you just want to set it and forget it, consider life cycle funds. These types of funds rebalance themselves according to your risk tolerance and your retirement date.
3. Is there an advantage to having a checking account in a credit union versus a bank? - Lora, Indianapolis
It's really up to your personal preference. Money at credit unions and banks are insured up to the same limits. But neither banks nor credit unions have escaped the credit crunch squeeze.
Generally at credit unions you can generally find better interest rates on your accounts and fewer fees - but sometimes credit unions don't have a large network of ATMS or branches. 
