45 Consumer Credit Tips for the 45-day Countdown to the Credit CARD Act
"A Tip a Day Will Keep the Bill Collector Away"
Norwalk, CT (January 8, 2009) - Carrie Coghill, Director of Consumer Education for www.FreeScore.com, suggests these 45 Consumer Credit Tips 45 days before the Credit CARD act goes into effect.
- Pay your bills on time. Delinquent payments and collections can have a major negative impact on your credit score.
- If you have missed payments, get current, and stay current.
- Be aware that paying off a collection account will not remove it from your credit report.
- If you're having trouble making ends meet, see a legitimate credit counselor.
- Keep balances low on credit cards and other forms of "revolving credit."
- Apply for and open new credit accounts only as needed.
- If you've been managing credit for a short time, don't open a lot of new accounts too rapidly.
- Do your rate shopping for a given loan within a focused period of time. Scores distinguish between a search for a single loan and a search for many new credit lines.
- Re-establish your credit history if you've had problems.
- Remember that it's okay to request and check your own credit report.
- Be sure to check your own credit report as you order your credit report directly from the credit-reporting agency, through AnnualCreditReport.com, or through an organization that provides credit reports and scores to consumers, like FreeScore.com.
- Read the fine print. If you receive an offer for a pre-approved credit card or if someone says they'll help you get a credit card, find out the details first.
- Be sure you know what interest rate you'll be paying and for how long. You also need to know about any annual fees, late charges or other fees, and whether there are grace periods for payment before interest is applied.
- Look for a credit card from someone else if the terms of a credit card offer aren't provided or aren't clear.
- Shop around. There are many different types of cards, such as secured cards, cards that can also be used as telephone calling cards, cards that allow you to both charge something and pay later, and cards that can only be used to charge merchandise from a catalog.
- Don't pay fees upfront to get a credit card.
- Don't pay someone to help you get a credit card. If you have good enough credit, you can get one yourself, and if you have bad credit, no legitimate lender is likely to give you one.
- Get help if you feel you're in over your head. Consumer Credit Counseling Service (CCCS), a nonprofit organization, provides low- or no-cost services to consumers who need a plan to repay debts and improve their credit. To find the nearest CCCS office, call them toll-free at 1-800-388-2227.
- Make sure the information is correct on all your reports. Sites like FreeScore.com will give you all three credit bureau reports – and your scores.
- Sign up for a credit monitoring service. Certain credit score reporting services offer monitoring as an additional level of protection. For information on which, go to www.FreeScore-reviews.com.
- Set goals, and put them in writing. Everyone's circumstances are different, so spend some quality time thinking about your own priorities.
- Track spending. Categorizing your spending and then scanning your list for excesses will quickly reveal your weaknesses.
- Change your attitudes about money.
- Learn how to say no to your spouse or children without feeling guilty.
- Check to see if your bank is changing how it handles overdrafts on your debit card. If you have good credit, you may want to consider applying for an overdraft line of credit to guard against your checking account being emptied.
- Turbo-charge your savings rate.
- Don't close unused credit cards as a short-term strategy to raise your score.
- Read credit card mail. It may be boring, but as a result of the Credit CARD ACT, companies are sending out valuable information about card changes. If you ignore these messages, it could cost you.
- If need be, increase your hours, or take on a side job. It doesn't have to be a permanent move, just something to get you through a rough patch.
- Pay off debt rather than moving it around.
- Get a home equity line of credit (HELOC). Interest rates are tax-deductible and much lower than credit cards. Use a HELOC to pay off high-interest debt, but be sure you can repay the HELOC, or you risk losing your house.
- Check to see whether your credit limit has been lowered. Starting in February, credit card companies cannot change fees for exceeding a credit cap unless you "opt in" or agree to pay for the convenience of exceeding a limit. If you don't opt in, as a precaution your credit card may be rejected when you near your limit.
- Trim recurring expenses. Remember that an "either/or" approach isn't necessary; often, all that's needed is downsizing, not elimination.
- Reduce, reuse, recycle, or repair. Become a do-it-yourselfer. Use your innate ingenuity to come up with ways to get what you need without having to buy new (or breaking the law).
- Know what's important. People and relationships, not possessions, are the truly valuable things in life. Cherish them, and experience what it's like to feel truly wealthy.
- Create an emergency fund by saving six months' worth of living expenses to tide you over during any job loss.
- Don't panic if you find a mistake when checking your credit report. Remember that a lot of mistakes result from simple human error, so just report them.
- Pare down major expenses. You can save on auto insurance, for instance, by increasing your deductible, taking a safe-driver course, or installing a car alarm.
- Don't take chances. If you suspect that someone else is using your identity or committing some kind of credit fraud, report it immediately.
- Spend as you earn. Overspending could lead to financial quagmires for you and your family.
- Check in with the credit bureaus if you're concerned about employer credit inquiries.
- Check your credit report before financing a major purchase, after you've been turned down on a loan, when bill collectors start calling, after your wallet has been lost or stolen, and when you're putting your financial house in order.
- Know your rights when it comes to the Credit CARD act. For instance, credit card companies will be prohibited from arbitrarily changing the terms of their contract with a cardholder, banning the so-called practice of "any-time, any-reason rate change."
- Gather information when you dispute a charge. The credit bureaus will need written proof, so gather information, both original documents and photocopies, to support your claim.
- Finally, and most importantly, pay all your bills on time.
About FreeScore, LLC
FreeScore, LLC, is a service that provides consumers with access to their credit scores, reports and monitoring. For more information, go to www.FreeScore.com.