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Government Regulations May Keep Consumers Better Informed

2008-07-01T16:48:00.000-04:00

Government Regulations May Keep Consumers Better Informed

Having a problem on your credit report can have devastating consequences. For example, if your credit report has a mistake on it that makes you appear to be irresponsible with your finances, you may not get approved for a home loan. If you are approved, you may have to pay a higher interest rate than you should have to pay. In some states, insurance companies also look at credit reports in order to determine the rates they will charge their customers. This means that one simply mistake could potentially cost you hundreds or even thousands of dollars each year.

Luckily, if the Federal Reserve and the Federal Trade Commission get their way, you might not have to worry about this any longer.

Keeping Consumers Informed

Back in 2003, Congress directed these two federal agencies to create a system that would help protect consumers from being negatively affected by erroneous information on their credit reports. More specifically, Congress wanted lenders to be required to notify consumers about the information they found on the credit report that caused them to turn down their loan applications or that caused them to get a higher interest rate.

Although it took a few years to complete, the two agencies have finally published their proposal for accomplishing this task. In fact, the proposal was published in the middle of May and is now open to three months of public comment. If all goes well, the plan may be implemented later this year.

How it Works

Through the proposed system, the process of notifying consumers about credit issues would actually be quite simple. Basically, if a lending institution pulls your information and finds that you do not qualify for its best rate, the loan officer would have to provide you with notification in one of two primary ways. These include:

• Providing you with your credit score as well as a graph showing how your score compares to other applicants as well as the factors that caused your score to be lower. The written notice would also need to provide you with information for contacting your credit bureau in order to obtain a full report.
• Providing you with a tiered pricing grid, which only has to be sent to those applicants that have a score in the lowest tiers.

While this legislation will help consumers become more aware of their possible credit problems, there are still many that are likely to slip through the cracks. For example, lenders would only be required to send notifications to those that have a score that is significantly different from the majority of applicants. Therefore, individuals applying for a mortgage loan that specializes in providing loans to people with poor credit may not qualify for notification because the majority of applicants also have poor credit. Despite its little pitfalls, however, it is definitely a step in the right direction toward keeping consumers better protected and informed.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Federal Reserve Auctions Loans to Banks

2008-06-19T16:31:00.000-04:00

Due to the economic problems that are affecting countries around the globe, many banks are reluctant to lend money to each other – let alone to consumers. As a result of this credit crunch, businesses and individuals cannot get their hands on the money they need to stay afloat. Obviously, this results in a catch 22 situation that only worsens the strength of the economy. After all, if banks are not in a situation to extend loans to consumers, consumers will not be able to purchase big-ticket items and the economy will falter. Similarly, without the help of loans, businesses cannot expand or hire additional workers.

In an effort to ease this problem, the Federal Reserve has auctioned $75 billion in loans to banks that are experiencing financial hardships. The goal is to help them overcome their credit problems so they can once again be an integral part of the economic cycle.

This program actually started back in December and this most recent auction is the 13th one to take place during that short time period. With this auction, banks were asked to pay a small 2.26% interest rate on short term loans that are good for only 28 days. In all, 73 institutions placed a bid and the Federal Reserve received bids for $95.9 billions worth of loans - $20.9 billion more than what was up for auction.

Obviously, banks are responding favorably to the program, which is meant to help them get over their credit problems. Of course, the fact that the need outweighed the available funds is not a very good sign.

The Federal Reserve has made some additional changes in an effort to alleviate the credit crunch. For example, the Federal Reserve has agreed to directly provide investment firms with emergency loans. Until now, this privilege was reserved only for commercial banks.

The Federal Reserve also lowered interest rates by one quarter percent point to 2 percent back in April. According to James Bullard, who is the president of the Federal Reserve Bank of St. Louis, the central bank does not have any immediate plans to make further cuts in interest rates.

"My sense is that the U.S. economy will be able to post stronger growth in the second half of this year despite the ongoing financial crisis and the drag from the housing sector," he said in a speech at the University of Wisconsin-Madison. "Such growth is likely to make the inflation outlook a more pressing concern for the Fed in the second half of this year."

Nonetheless, lending institutions are still struggling and are finding it difficult to extend credit to borrowers. Until this credit crunch is remedied, the economy will continue to have problems with getting back on its feet.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

TransUnion Corp May Soon Reach a Settlement for Class Action Suit

2008-06-10T10:28:00.001-04:00

In an interesting turn of events, the credit reporting bureau TransUnion Corp has settled a $10 billion class action suit. As a result of the settlement, millions of people may be able to access their credit scores for free while receiving some additional benefits that will help them keep their credit safe.

Why the Lawsuit?

For quite some time now, TransUnion Corp has been battling charges that were filed in U.S. District Court in Chicago. According to the suit, the company sold information about its consumers to a variety of retailers and lenders. The suit alleges that the information was customized to suit the needs of these lenders and retailers, who then used the information for marketing purposes. According to Federal law, the private credit information of consumers cannot be sold unless special circumstances have taken place, such as when a consumer applies for a loan. Therefore, selling this information to lenders and retailers is a direct violation of the law.

What Will Consumers Receive?

If the settlement, which still has to be reviewed in Federal court, is finalized, approximately 160 million people throughout the United States will be affected. Those that are included in the class action suit, which is thought to have the largest number of plaintiffs ever included in one class action suit, will receive free access to their credit scores. Although Federal law currently allows consumers to receive a free copy of their credit reports each year, it does not call for providing consumers with their actual scores.

In addition to receiving free access to their credit scores, the plaintiffs in the case will also receive either six months of the basic credit reporting services and a cash payment or they can choose to receive nine months of enhanced services. The basic service normally sells for $59.75, while the enhanced service includes more detailed information such as an insurance score and a mortgage rate simulator.

How Will Consumers Benefit?

All consumers can benefit from receiving free access to their credit scores and from the credit reporting service. Those that are in financial trouble because of the mortgage collapse or those facing other financial economic problems, however, will particularly benefit from the service. This is because the service provides them will immediate access to their credit information and they can find out their credit scores at any time, which means they can make wiser financial decisions. The service is also set up to notify consumers when changes take place in their files, such as when an new account is opened in their name, which is beneficial when it comes to fending off identity thieves.

Experts in the field are astounded by what TransUnion Corp is offering in the class action suit. Ken McEldowney, who is the executive director of Consumer Action, has referred to the settlement as being “mind-boggling” and “astonishing.” He went on to say, “It’s everything we tell consumers that they need to find out if they have problems with their credit. They are getting information on how to improve it and information about whether they are credit worthy.”

About the Author:
Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Reasons to Use a Business Credit Card

2008-06-03T16:22:00.000-04:00

Are you a small business owner? If so, you might want to consider applying for a business credit card. Although the interest rates on credit cards can be quite high, if you use your card responsibly and if you pay it off at the end of each billing cycle, having a credit card can be a real asset to your business. Or, if you do need to carry a balance for a period of time, you can take advantage of great introductory offers that will actually provide you with a rate that is lower than a conventional bank loan.

Obtaining Start Up Money for Your Business

Applying for a new credit card in your business’ name can be a great way to help you get the start up money you need in order to get your business off the ground. Rather than go through the trouble of applying for a conventional loan, you can use your credit card to make the purchases you need to get your business started. With many credit cards offering 0% APRs for the first twelve months of membership, you may be able to get your business started and get the card paid off before the interest rates kick in. Of course, if you don’t get the card paid off, you may face a high interest rate. So, make a solid business plan before you start making purchases.

Enjoying the Convenience of a Credit Card

There is no doubt that using a credit card to make your business purchases is very convenient. Most merchants and service providers accept credit cards for payment, which is far easier than carrying around a checkbook or cash. In addition, when you keep your expenditures on your credit card, it is easy to keep track of what you spend each month. In fact, if you choose to get credit cards for your employees, a business credit card will even break down your statement for each employee. That way, you can see precisely what your employees are spending. In most cases, you can even individualize the credit limits for each employee so you can be certain no one’s spending gets out of control.

Getting Credit Card Rewards

There are many potential financial rewards associated with using a business credit card. First, if you use a rewards credit card, you will earn points or cash back for the purchases you make. If you pay off your balance at the end of each month and you have a rewards credit card, you can actually make money with your credit card rather than lose it. In addition, many business credit cards offer discounts with merchants that business owners typically use, such as with stores that sell office supplies. Finally, the fact that your business name and logo can be put on your credit card has the reward of personal satisfaction – and may actually help you find new customers when you pull out the card and the cashier sees your logo on the side.

About the Author:
Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Should You Get a Credit Card?

2008-05-19T15:43:00.001-04:00

If you don’t have a credit card, you may be wondering if getting one is the right move for you. After all, we have all heard the horror stories involved with credit card usage – it is certainly very easy to let spending get out of control and to find yourself buried in debt. At the same time, there are many benefits associated with using a credit card as well. Therefore, in order to determine if getting a credit card is a good move for you, you should explore the pros and cons of credit card ownership.

Benefit #1 of Credit Card Ownership: Convenience

One of the greatest benefits of having a credit card is the fact that they are so convenient to use. Credit cards are accepted almost everywhere and are much easier to keep track of than cash and checkbooks. When it comes to pumping gas, you don’t even have to go inside when you have a credit card!

Drawback #1 of Credit Card Ownership: Debt

If you aren’t careful about your spending, it is easy to get yourself buried in debt. Once you add finance charges to your debt, you can find yourself paying hundreds of dollars each month for the convenience of credit card usage. Research has proven that people spend more when they use credit cards – so be careful and monitor your spending if you decide to get a credit card.

Benefit #2 to Credit Card Ownership: Protection

Having a credit card provides you with extra protection that you don’t get when you make purchases with cash, checks, or even debit cards. In fact, you are legally obligated to pay only $50 if someone takes your credit card and makes purchases with it. In many cases, the credit card company will waive the $50 as well. In addition, several credit cards offer purchase protection, extended warranty coverage, and even insurance coverage when you rent vehicles or when you travel.

Drawback #2 to Credit Card Ownership: Taxes

When it comes to taking out a loan, using a credit card isn’t necessarily your best option when it comes to saving money. Even if you happen to get a pretty good interest rate on your credit card, you may be better off using a home equity loan if you are taking out a big loan. This way, you can deduct the interest fees on your taxes. The finance charges you pay through a credit card are not deductible.

Benefit #3 to Credit Card Ownership: Rewards

Most credit cards offer some sort of rewards program. If you pay your credit card bill off at the end of the billing cycle, you can completely avoid finance charges while earning rewards with your credit card. Depending upon how much you spend, you could potentially earn hundreds of dollars each year with rewards credit cards.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Thinking About Transferring a Balance? Know What You are Getting Into Before You Complete the Transaction

2008-05-13T11:09:00.001-04:00

When you receive an application from a credit card company in the mail, it may include an invitation to transfer your credit card balances to the new credit card. Or, you may even receive periodic invitations from your current credit card to complete a transfer at a low interest rate. You may be tempted to complete one of these transfers, and it is possible that performing a balance transfer is a good decision, but you need to know exactly what you are getting yourself into before you go ahead with the transaction.

Pay Attention to the Fees

While the credit card may be offering a balance transfer rate that is much lower than the interest rate you are currently paying, there may be a number of fees associated with the transfer as well. Generally, these fees are determined by calculating a percentage of the amount you are transferring and, while there may be a cap on how much you can be charged for a balance transfer, you can still end up paying over $100 to transfer your credit card balances. When all is said and done, the money you save on interest may be less than the money you are paying toward fees. Therefore, before you complete a balance transfer, be certain to find out about the fees that you will have to pay for the transaction.

Consider the APR

When you receive that enticing offer from the credit card company, the interest rate will likely be quite low. As a result, it will seem like a great idea to transfer your balances. Don’t just look at the introductory rate, however, as the ultimate rate of the credit card may be much higher than what you are currently paying. For example, you may receive a card with an introductory rate of 0% on balance transfers, but it reverts back to the standard 19.99% interest rate after the introductory period is over. Some cards will keep the low interest rate in place until the balance is paid off, but this is not always the case. Therefore, either make certain you pay the card off within that introductory period or don’t bother to make the transfer. Otherwise, you will likely spend more in finance charges if the ultimate APR is higher than what you are currently paying.

Find a Great Deal and Make a Plan

Some people try to evade their credit cards by jumping from one card to the next. Bouncing from one card to the next in an effort to keep your finance charges down will not pay off in the long run. Sure, it will help keep your finance charges, but the only way to take care of the problem is to work out a plan that allows you to get the debt paid down. So, rather than trying to work out a plan for transferring your balances over and over again, work on creating a plan that will allow you to get the debt paid off completely.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.reliacredit.com/ . For more info and to order your credit report with FREE credit score please visit http://www.reliacredit.com/

The Credit Card Fees You Didn’t Know About

2008-05-05T15:38:00.002-04:00

Do you know that you are paying for the convenience of using a credit card, even if you don’t make your purchases in plastic? Or, do you realize that using a rewards credit card to make a purchase actually cuts into the profits of the merchant you are purchasing from? Most consumer do not know that using a credit card actually costs merchants each time that card is swiped. In fact, credit card use has been a very touch subjects for many merchants and several of them are banding together to try to bring about a change.

Understanding Interchange Fees

When a place of business decides to provide its customers with the option to pay with a credit card, that business has to set up an account with a credit card processing company. The transactions then filter through that company in order to ultimately land in the merchant’s bank account. Along the way, however, several fees are taken out of the transaction. Among these fees are interchange fees.

Interchange fees are set fees that banks charge for completing the credit card transaction. These fees are typically assessed as a percentage of the transaction amount, with the average fee being 2%. Therefore, if you purchase an item for $10 at a store, $0.20 of that transaction is paid to the bank in the form of an interchange fee.

Effects on Pricing

Although a $0.20 fee for a $10 purchase may not sound like a whole lot, these interchange fees really add up for merchants. This is particularly true with smaller “mom and pop” establishments that already have very small profit margins. If they purchase an item for $8 and sell it for $10, for example, the $0.20 interchange fee leaves them with only $1.80, but much of this goes toward paying employees and otherwise keeping the establishment running. Therefore, many smaller businesses are claiming that interchange fees – which continue to go up – are effectively running them out of business.

For smaller stores dealing with interchange fees, they are faced with a conundrum: they can choose to stop accepting credit cards, but they may cause them to lose a great deal of business, or they can simply accept the credit card fees. In an effort to try to break even, many of these merchants choose to raise their prices to compensate for the interchange fees. Of course, if they raise them too much, they will no longer be competitive and business can suffer.

Rewards credit cards pose an even greater problem for some businesses because the costs of providing cardholders with these rewards is often passed onto the merchant. American Express is notorious for having hire interchange rates because of its rewards program, which is precisely why some businesses choose not to accept American Express credit cards.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Selecting the Right Credit Card For You

2008-04-29T15:53:00.000-04:00

If you are like most people, your mailbox is overflowing each week with credit card applications. It is no secret that credit card companies are actively seeking new credit cardholder and, as a result, many are offering some pretty good deals to those looking for a new credit card. Nonetheless, that doesn’t mean all of the credit card offers are best for you. Therefore, you need to take a few things under consideration in order to make certain the credit card you apply for is the right one for you.

Take a Look at Your Financial Situation

Your current financial situation is one factor you should consider when trying to decide on the right credit card. If you have a tendency to carry a balance from month to month, for example, you should look for a credit card with a low interest rate. This way, you will pay as little as possible in finance charges each month.

Choose the Right Rewards Card

If you do pay your credit card in full each month, you should apply for a rewards credit card. With a rewards credit card, you will be able to earn points or other benefits every time you make a purchase with your card. These credit cards tend to have a higher interest rate when compared to non-reward credit cards, but that won’t be an issue if you continue to pay the credit card in full each month.

Of course, you also need to consider the type of rewards credit card you should apply for. By considering your lifestyle and examining your spending habits, you can choose the credit card that will provide you with the most rewards possible. If you tend to spend a lot of money at restaurants, for example, you should choose a rewards credit card that provides you with a greater return on these purchases and rewards you with gift certificates to your favorite restaurants.

Help Build Your Credit

If you have poor credit, you might want to consider applying for a pre-paid credit card. With a pre-paid credit card, you send money to the card ahead of time and the amount of money you send to the card becomes your available spending limit. These cards often have fees associated with them, however, so be certain to shop around in order to find the one with the lowest fees. In addition, make certain the card reports cardholder activity to at least one of the three major credit reporting bureaus. Otherwise, using the card won’t help you rebuild your credit. If the card activity is reported, on the other hand, responsible use of the card can help you rebuild your credit rather quickly.

Although many credit card offers may contain attractive introductory offers, you should take time to consider your options before you actually complete an application. In this way, you can find the credit card that is best suited to your lifestyle and that will help you keep your finances properly under control.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Tips for Avoiding Filing for Bankruptcy

2008-04-16T11:04:00.001-04:00

Are you struggling to pay your bills on time? Are you feeling overwhelmed by the debt? Do you feel as if your only choice is to file for bankruptcy? If so, you might want to take a few steps in order to avoid having to actually file. Filing for bankruptcy is a serious issue that will haunt you for years to come. Therefore, you should do as much as you possibly can before you take such an extreme measure.

Contact Your Creditors

One of the most important steps you can take is to contact your creditors directly. Many people facing financial problems choose to ignore the phone calls and to throw away the reminder notices sent by their creditors. Pretending you aren’t in debt won’t help you with the situation. Rather, you need to take a proactive approach. Don’t wait for your creditors to contact you. Instead, call them and try to work out some sort of payment plan. Most creditors will work with their clients if they explain their situation and present a repayment plan to them. Not only will this make your bills more manageable, it will also help prevent you from having to file for bankruptcy in order to get out from under your debt.

Consolidate Your Debt

In many cases, you can make it easier to repay your debt I you consolidate the debt you currently have. Consolidation can help you reduce the amount you have to pay each month and you can potentially get a lower interest rate than what you are currently paying on your debt. In order to get the best interest rate, however, you should look into consolidating your debt before you have started to fall behind on your bill payments. This way, you will still have a good credit rating and you will qualify for a better interest rate.

Talk to a Credit Counselor

If you are struggling with making arrangements with your creditors or if you are unable to consolidate your debt, you might want to consider obtaining the services o a credit counselor. A credit counselor can help you take a closer look at your current financial situation and find ways for you to overcome your debt. In addition, a credit counselor may be able to work with your creditors and find ways to reduce your interest rate or your payment amounts. This way, you will be able to get your finances back on track.

Filing bankruptcy is a decision that can cause you problems for years to come. It can make it difficult or even impossible to obtain a loan or a credit card. In addition, it can cost you hundreds or even thousands of dollars in extra finance charges because of the higher interest rates you will pay when you do get a loan. Follow these simple steps and prevent bankruptcy from happening to you.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Tips for Increasing Your Credit Score

2008-04-11T09:55:00.002-04:00

Are you planning to apply for a loan or new credit card any time soon? If so, you might want to check out your current credit rating before you complete that application. After all, if your credit rating is poor, you may find yourself spending a huge amount of money on finance charges and interest payments. In order to avoid tossing your money away because of a low credit score, you should put off the loan for a little longer and build up your credit score. By following these simple tips, you can build up your credit score faster than you may have thought possible.

Tip #1: Pay Your Bills on Time

The single most important thing you can do in order to increase your credit score is to simply pay your bills on time. Just one late payment can truly wreak havoc on your credit score. Even unusual bills, such as late fees to your library for books you returned late, need to paid. Otherwise, your failure to pay may be reported to the credit reporting bureaus and your credit score will be negatively impacted.

Tip #2: Check Your Credit Report

The federal government has determined that everyone is entitled to receive free copies of their credit reports. You can order yours by going to AnnualCreditReport.com. After you receive your free credit report, look it over for errors. Even a seemingly small error, such as showing a lower credit limit than you really have on your credit score, can have a negative impact on your credit score. Be certain to report any errors you find to the credit reporting agency as soon as possible. That way, the bureau can look into the error and make any necessary changes.

Tip #3: Pay Down Your Credit Cards

Your credit score is partially determined by your debt to credit limit ration. The more debt you have as compared to your available credit, the greater risk you become. For example, if you have a credit card with a $2,000 limit and you are carrying a debt of $1,800, this will actually hurt your credit score more than if you had a credit limit of $6,000 and you were carrying the same balance. Similarly, it is usually better to have $1,000 of debt spread over two credit cards than to have $1,000 in debt on one credit card.

Tip #4: Don’t Cancel Credit Cards

Although we all know that having too many credit cards in your wallet can be financially dangerous, it is a bad idea to cancel the credit cards that you already have. When you cancel your credit card, you lose all of the credit history you have acquired through the card. As a result, your credit rating will take a downward spiral.

Tip #5: Don’t Open New Credit Card Accounts

It is important to resist the temptation to open up several new credit card accounts. The more your credit report is accessed by lending institutions, the more your credit score is damaged. It is easy to get caught up in the thrill of applying for department store credit cards – particularly since they often provide very attractive benefits to new applicants – but the inquiries into your report makes it look as if you are trying to gather as much credit as possible. This makes you an increased credit risk to potential lenders. Therefore, you should hold off on these applications until after you have received the loan you are really wanting to acquire.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for www.reliacredit.com . For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Tips for Getting the Most from Your Rewards Credit Card

2008-04-04T12:01:00.001-04:00

Are you thinking about getting a reward credit card? If so, you are not alone. A growing number of people are deciding to take advantage of the perks that rewards cards provide. When used properly, rewards credit cards can put some extra money in your pocket. Unfortunately, many people don’t know how to take full advantage of their rewards credit cards and are actually losing more money in the process. By following these few simple tips, however, you can manage to get the credit card companies to pay you for using their card.

Tip #1: Pay the Balance in Full Each Month

This first tip is probably the most difficult one for many people to follow. A number of people have grown to depend upon their credit cards and are accustomed to carrying a balance from month to month. If your current financial situation has you in a crunch and you have to carry a balance, don’t carry one on your reward credit card.

Reward credit cards generally have a higher interest rate than credit cards without any frills. Although you may be getting a 1% cash back rebate with the purchases you make with your credit card, you may be paying 5-10% more in interest. As a result, you will actually be losing more than you gain when you use your reward credit card. If you can’t pay off all of your expenditures each month, you should only charge what you can afford to pay on your rewards credit card and place the remaining charges on a credit card with a lower interest rate.

Tip #2: Know How to Make the Most Money with Your Card

If you have more than one reward credit card, make certain you know how you can earn the most money with each one. For example, some reward credit cards pay a higher percentage of return on gasoline purchases while others pay more when you purchase groceries or travel-related items. Know the specialty area of your credit card so you use the one that will pay you the most when you make your purchases.

Tip #3: Take Advantage of Special Program Offers

Some reward credit cards specialize in offering “no hassles,” but most of these types of cards do require paying special attention to specific guidelines. For example, you might have to sign up in order to participate in some cash back programs. With some cards, you might have to sign up every three months in order to be eligible for a higher percentage rebate. If you don’t sign up, you may still receive a smaller cash back award but you won’t get as much from your credit card as you could be getting.

Tip #4: Spend Your Points Wisely

Depending upon the reward credit card, you may have the option to spend your points in a variety of different ways. For example, you might be able to get cash back with your credit card points or you might be able to trade in your points for gift certificates or other types of rewards. When you trade in the points for something other than cash, you often get a greater value for your points. For example, 1000 points may be enough to help you earn $10 but those same points may be traded in for a $20 gift certificate to a restaurant. If you enjoy eating at one of the available restaurants, trading in your points for a gift certificate will help you stretch your points further.

Tip #5: Pay Your Monthly Bills with Your Credit Card

Look over your monthly bills and see if you have the option to pay them with your credit card. By paying your regular monthly bills, such as your utilities, cable or satellite and telephone, you can make some extra cash with your reward credit card. Since you already have planned a budget that will allow you to pay these bills, you should have no problem paying off the balance at the end of each month. Paying off your utilities with your reward credit card is almost like getting free cash!

For more info and to order your credit report with FREE credit score please visit http://www.reliacredit.com/

How much does your credit score drop when a foreclosure is added?

2008-02-21T16:00:00.001-05:00

Information about the specifics of credit scoring is largely emphirical and based on trial and error. The Fair-Isaac company, who pioneered credit scoring, is very secretive about the exact working of their software.

In addition, credit scores compute ALL the information showing in your credit report each time it is calculated. Changes in your debt to available credit, other derogatory information (like late payments and collection accounts) and when these things occured are taken into account.

History, specifically what has taken place in the last twelve months, is factored a full 35%. So if the foreclosure was within that time period and was removed, your score would recover a significant amount of points. If the foreclosure was older, it would not impact your credit score nearly as much.

For more info and to order your credit report with FREE credit score please visit http://www.reliacredit.com/

Preventing Identity Theft (Tips and Activities)

2008-02-18T11:37:00.001-05:00

Prevention Tips
Reduce your chances of being a victim of identity theft by remaining vigilant in all financial matters and taking precautions to protect your personal identifiers.

Identity thieves can find ways to exploit your personal information in all avenues of your life. At work, at home, and on the Internet, your daily activities offer multiple opportunities for criminals to obtain your personal information.

Making yourself aware of the issues and information is the first step in safeguarding against identity theft. By making a slight change in your daily routine, you may be able to thwart a criminal from obtaining your personal information.

Your Personal Financial Matters
1. Order and closely review copies of your credit report from each national credit reporting agency once a year.

2. Empty your wallet of extra credit cards and IDs. Close all unused credit card or bank accounts.

3. Shred pre-approved credit applications, credit card receipts, bills, and other financial information you don't want before discarding them in the trash or recycling bin.

4. Remove your name from mailing lists for pre-approved credit lines by calling 1-888-5-OPTOUT (1-888-567-8688).

5. Remove your name, phone number and home address from marketing lists by contacting the Direct Marketing Association. This will not prevent your name from being placed on all marketing lists, but it removes your information from many of them.

DMA Mail Preference Service
P.O. Box 9008
Farmingdale, NY 11735-9008
www.the-dma.org

DMA Telephone Preference Service
P.O. Box 9014
Farmingdale, NY 11735-9014
www.the-dma.org

6. Only release your personal data (social security number, date of birth, bank account or credit account numbers, etc.), to agencies who require it for action you have initiated. Never give this information to unsolicited telephone callers or over the Internet.

7. Contact the Department of Highway Safety and Motor Vehicles and request assignment of an alternate driver's license number if it currently features your Social Security number. Furthermore, submit a request to limit access to the personal information on your Driver's License under the Driver Privacy Protection Act.

Your Daily Activities
1. Ensure that your PIN numbers cannot be observed by anyone while you're utilizing an ATM or public telephone.

2. Never leave receipts at bank machines, bank counters, trash receptacles or unattended gasoline pumps.

3. Memorize your social security number and all passwords. Do not record them on any cards or on anything in your wallet or purse.

Your Mail
1. Promptly remove mail from your mailbox after delivery.

2. Deposit outgoing mail in post collection boxes or at your local post office.

3. Contact your creditor or service provider if expected bills don't arrive.

4. Never put your credit card or any other financial account number on a postcard or on the outside of an envelope.

5. Beware of promotional solicitations through the mail or telephone that offer instant prizes or awards and seek to obtain your personal information or credit card numbers.

On the Internet
1. Use caution when disclosing checking account numbers, credit card numbers, or other personal financial data at any web site or on-line service location unless you receive a secured authentication key from your provider.

2. Don't email your personal data unless you use encryption technology

3. Be very careful when giving information on unknown web sites, especially ones found in Spam e-mails

4. Do not give out your checking account information on the internet, unless you are dealing directly with your bank's website.

5. Make sure every transaction you engage in on the Internet is over a secure connection, you should see a lock in your browser window, as well as "https" in the browser window.

6. Consider making a secondary, disposable online identity with an incorrect address, phone number using a "free" email account.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Choosing a Credit Card

2008-02-03T13:04:00.000-05:00

Shopping around for a credit card can save you money on interest and fees. You’ll want to find one with features that match your needs.

This information can help you

Understand the features of credit cards
Compare credit card features and costs
Know your rights when using your credit card
File a complaint if you have a problem with your credit card

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Why pay for credit repair services when you can do it for FREE?!?

2008-01-23T10:33:00.001-05:00

When it comes to repairing your credit, you're the best person for the job.

Credit repair scam artists will charge you anywhere from $500 to $1,500 or more upfront, and promise you everything from a new Social Security card to perfect credit.

But these companies can't do anything for you that you can't do for yourself -- for free -- and they might ultimately do more harm than good.

What should you do if you have bad credit? Here are 10 tips that are designed to improve your credit history and raise your credit score:

1. Pull a copy of your credit history. Each credit-reporting bureau is required to give you one copy once a year. You should pull copies from each of the bureaus, since they sometimes collect different data.

2. While you're there, buy a copy of your credit score from Equifax.com. Equifax offers a FICO score, also known as a Beacon score, which is from Fair Isaac, the company that created the concept of credit scoring. Most creditors will pull a FICO score, so you should see what they're seeing. Your credit score will give you a snapshot of what your credit information means to your creditors. The FICO score runs from 350 to 850. The higher the number, the better. Your target should be to have a credit score of at least 720.

3. Check your credit history thoroughly. You're looking for errors, misinformation and negative information that might count against you. File a dispute with the three credit-reporting bureaus if you spot any errors. Some credit reports have serious errors in them, so fixing these will boost your score.

4. Understand what kind of debt you're facing. Make a list of everything you owe, the interest rate each debt carries, and the minimum payment due each month. Then, prioritize your debt: mortgage, real estate taxes, credit cards and medical bills should be paid in that order.

5. Negotiate with your creditors for a lower interest rate. Paying less in interest means more of your payment each month goes toward paying down your balance. If you have a good credit score (over 720 is a starting point), you should be able to find other credit cards featuring zero percent to 5 percent in interest for the first year, or for the life of a balance transfer (check out sites like CardRatings.com and CardTrak.com to compare credit-card offers.) Just be sure you read the fine print: Some credit cards require you to charge on the new account each month or face a stiff fee.

6. Pay down the debt with the highest interest rate first. Pay your mortgage and home equity loan and lines of credit in full each month. Then, make sure you have enough cash to make all of the minimum payments due on your debt each month. Then, throw any spare cash at the debt that carries the highest interest rate first. Once you've paid down that debt, transfer all of the extra cash you're paying each month to the debt with the next-highest interest rate, and so on.

7. Pay everything on time, even if you can make only the minimum payment. The most crucial component of your credit history and credit score is your ability to pay your bills on time each month. Paying on time shows your creditors that you take your debts and obligations seriously. Even one late payment can seriously damage your credit history and credit score, even though it can take a year's worth of on-time payments to start to heal your credit history and raise your credit score. It doesn't seem fair, but that's how the credit industry works.

8. Don't charge more than 25 percent of your maximum available credit limit. If you carry a credit-card balance that is a higher percentage of your available credit limit, your credit score will go down. Why? Because creditors believe if you charge the maximum on your credit cards, it means you can't properly manage your credit. You're better off spreading out your debt between three or four different cards than having it all piled on one card.

9. Don't open and close a lot of accounts. Again, a credit score tells current and future creditors how likely it is that you won't pay back your debts. It assesses how risky a borrower you are today. Every time you apply for a new credit card, that creditor pulls a copy of your credit history from the credit-reporting bureaus. That "inquiry" gets reported on your credit history. Too many inquiries in a short period of time signals that you may be getting low on your available credit and need more cash. Even though you might be interested in getting 10 percent off your first purchase for opening a new account, it looks different to a prospective creditor.

10. Don't share credit (except with a spouse). It's easy to tell someone that you'll "co-sign" a credit card, student loan or a mortgage loan application, especially if it's someone you've known for a long time. But it's also easy to wind up in a situation where that friend or relative stops paying his or her bills (for whatever reason) and your credit will take a big hit. Once you're a co-signer for a loan, you're legally obligated to make those payments -- whether or not you can afford them. So think carefully before you agree to co-sign a loan, and nip the problem of bad credit before it begins.

Article source - Inman News http://www.inman.com/hstory.aspx?ID=65868

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

New Threats To Your Credit Score (MSNBC.COM)

2008-01-07T21:03:00.000-05:00

Everyone knows that an unpaid creditor can leave a mark on your record for years to come. But now, even your health club or local librarian can lower your score.

Most people know, and can accept, that an unpaid credit card bill can wind up in a collections account that will devastate their credit scores.

But did you know that your credit also could suffer from an unpaid parking ticket, a traffic fine you ignored or a forgotten library book?

A growing number of local and state agencies are using private collection companies to boost their revenues. More than 600 public libraries from Eugene, Ore., to Broome County, N.Y., turn unpaid accounts over to private collectors like Unique Management Services. Cities and courts hire others, including Municipal Services Bureau, to track down overdue parking, traffic and court fines.

Many collection agencies quickly report these overdue accounts to at least one of the three major credit bureaus, and the black marks send consumers' credit scores tumbling. Anyone who's had a spat with a phone company, health club or an insurer turn into a collection knows that this is a pretty big club to waive over the heads of consumers.

Article source: http://moneycentral.msn.com/content/Banking/Yourcreditrating/P121551.asp

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Credit/Debt 2008 New Year's Resolution

2008-01-01T20:57:00.000-05:00

Have you been thinking about what you’d like to change for the New Year? Most New Year's resolutions involve improving health or getting rid of a bad habit. Don't forget about improving your financial health and your bad credit habits in the new year. As you resolve to make some changes this year, add one or more of these credit/debt New Year’s resolutions to your list.

Get your free credit report

Since each of the three credit bureaus is required to give you a free credit report each year, there's no reason you shouldn't be checking it. Monitoring your credit report helps you detect identity thefts, ensure creditors are reporting your information correctly, and enables you to take action on credit/debt problems before they get worse.

Clean up your credit report

Don't take for granted that the information contained in your credit report will be accurate. Mistakes happen all the time. It;s up to you to correct those mistakes. Disputing credit report information is free and can often be done online when you check your credit report.

Get out of debt

If you don't have a detailed plan for getting out of debt, you can expect to carry the debt for the rest of your life. Once you make the decision to pay off your debt, you can begin making a plan. Even if your plan spans ten, fifteen years or more, it's better than not having a plan at all.

Make a Get Out of Debt Plan

Repair your credit

Need to fix bad credit? What are you waiting for? The New Year is as good a time as any to start repairing your credit. First, figure out what's causing your bad credit. Then, plan a solution for each of those things. Put your plan into action and you’ll be on your way to better credit.

Do It Yourself Credit Repair

Use credit wisely

Have you been using credit in a way that encourages debt? Changing those spending habits won't be so hard to do. At first, it will take conscious effort on your part. After making good credit decisions for a few weeks, you'll find that good spending habits start to come naturally.

Do's and Don'ts of Using Credit Cards

Improve your credit score

Your credit score influences whether or not you get approved for new credit cards and loans. It also affects the interest rate you pay. Lower credit scores risk denied applications or high interest rates. Improving your credit score improves your ability to get good credit card and loan terms.

Learn more about credit

Many people learn about credit by making mistakes. That wouldn't be such a bad way to learn if credit mistakes weren't so costly. Spend some time this year learning more about credit and understanding the process. You'll be surprised at how information can protect you from costly credit mistakes.

Start an emergency fund

When you have an emergency fund, you don't have to resort to credit or loans when a financial emergency arises. Building an emergency fund can take less time than paying off a credit card used to cover an emergency expense.

Pay less interest

Essentially, interest is the cost of having credit. The money you pay in interest pads your creditors' pockets when it could be padding your own. You can pay less in interest by negotiating lower interest rates or paying your balances off sooner (or both). Transferring balances to a zero percent interest rate balance transfer credit card can also temporarily reduce your interest payments.

Stop paying late fees

Paying late fees is another unnecessary expense that goes to your creditors. Not only do late payments result in late fees, you might also see a spike in your interest rate and a drop in your credit score. These negative results can be avoided by paying your credit card bills on time.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Stop, ID thief! 5 tips to protect against fraud

2007-12-20T09:40:00.000-05:00

From www.TheTodayShow.com

Chances are you just finished dropping a boatload of money on holiday gifts. You probably paid for the bulk of your purchases with a debit or credit card, particularly if you did any of your shopping online. But what did you do to protect yourself against identity theft?

Probably not much - most people rarely, if ever, look over their shoulder before handing over their credit card. Some don't even bother to double-check that a Web site is secure before typing in the digits. But with an estimated 10 million cases of identity theft each year, paying close attention to your personal information is one of the only ways of keeping your personal information, and your money, safe.

The others? Well, there are micro shredders, which I've touted in this space before. There are credit-monitoring services, which may cost more than you feel like spending with the holiday bills rolling in. Also, critics argue that they may not be all that effective either, since they're somewhat akin to a fire alarm - it can alert you to a bad situation, but often just a bit too late.

The best solution we have is probably the security freeze, recently made available nationwide by all three credit bureaus. It's basically a padlock for your credit report and perhaps the best way to keep from becoming a victim.

"A credit freeze is an order to the three credit bureaus - TransUnion, Experian and Equifax - that you do not want them selling your personal information to any third party. What this does is make your credit report unavailable to banks, credit card companies, utility and cell phone companies - anyone who might want to look at your credit report before issuing credit," explains Scott Mitic, CEO and co-founder of TrustedID, an identity-theft protection service. If lenders can't see your credit report, they can't issue a thief credit in your name.

The downside, of course, is that unless you lift the freeze, you can't get credit either. So is it worth the hassle? Here, a primer on security freezes and other ways to keep your identity to yourself.

Weigh the cost
The fee for a security freeze is going to vary by state, but $10 per bureau seems to be the norm. (Unless you've already been a victim of ID theft - then it's free.)

You'll want to put a freeze on your file at each of the three credit bureaus, because contacting just one is akin to locking the front door of your house, then leaving the back and side doors wide open. So now we're at about $30. If you have to lift the freeze because you need a new car or want to apply for a mortgage, it's another $10 a pop. Deciding whether it's worth the $60 bucks (more if you have to repeat the process) is really a matter of looking to the future. If you're happy with your house and car, and don't foresee a need for any additional credit cards or loans in the next several years, it may be worth it to place the freeze.

(Note: If you don't want to deal with it yourself, or see yourself freezing and unfreezing multiple times, a service like Mitic's, which is $109.95 for a year, may be cost effective.) But if your situation is at all in limbo - say you've just graduated from college, for example, and may be shopping for a home soon - you're probably better off fighting the identity-theft battle another way.

Know yourself
I have to admit, I kind of like credit freezes for another reason: They force you to stop and think before spending money you don't have. It can take a few days for the freeze on your credit report to lift, which is long enough for you to decide you don't really need that department store credit card after all. But if you're not the kind of person who plans in advance, you may find yourself in a sticky situation if you forget to lift the freeze and need access to credit immediately.

Consider a fraud flag instead
It's basically a note, attached to your credit report by all three bureaus, requesting that lenders contact you by phone before issuing credit in your name. One plus to a fraud flag over a freeze is that it's free. It's also a lot easier to manage than a freeze, but it may not be quite as effective.

"It's not foolproof," says Mitic. "It's not as safe or as guaranteed as a freeze because you're counting on tens of thousands of different lenders to correctly see this note, correctly call you and correctly verify your identity." Still, lenders are by law required to read and respond to a fraud flag, so it's definitely worth a try.

Arm your computer
Updated anti-spyware and anti-virus software is always worth the investment. For about $30, you'll protect yourself against programs that can worm into your computer, scan the hard drive for your personal information, and then send the findings into the waiting hands of thieves.

Pay attention
If you can't stop an identity theft - and all the protections in the world may not be enough, frankly - you can at least catch it early on. The crime generally comes with one or two red flags.

"If you start to get bills from people or companies you've never heard of, it's a strong sign that someone is impersonating you," says Gail Hillebrand, a senior attorney with Consumer's Union. She also advises going over your credit card and bank statements with a fine-tooth comb for any suspicious charges, something that is particularly important at this time of year, when we've spent more money than usual at places we may not normally shop. Any charges you don't recognize, no matter how small, should be disputed with the bank or credit card company.

With reporting by Arielle McGowen, NBC.com - The Today Show.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

What to do when your ID's been stolen?

2007-12-14T09:49:00.000-05:00

Step 1: Protect your finances
Contact the fraud departments of each of the three major credit bureaus.

Get a copy of your credit report, which is free to ID theft victims. Ask that your file be flagged with a "fraud alert tag" and a "victim's statement." That will limit the thief's ability to open new credit accounts, as new creditors will call you before granting credit, generally. Insist, in writing, that the fraud alert remain in place for seven years, the maximum, according to PrivacyRights.org.

Step 2: File a police report
You will need a police report to dispute unauthorized charges and for any insurance claims. Be persistent; your local police department may suggest that this isn't necessary, because they don't want the paperwork hassle. Also, fill out an online ID Theft complaint with the Federal Trade Commission or call 1-877-ID-THEFT.

That enters your case in the FTC's "Consumer Sentinel" database, a nationwide list of ID theft cases which can be used by law enforcement officers to find patterns and catch criminals.

Step 3: Close all compromised accounts
The list may be wider than you realize. This includes accounts with banks, credit card companies and other lenders, and phone companies, utilities, ISPs, and other service providers. Dispute all unauthorized charges - The FTC offers a sample dispute letter on its Web site. Disputes may require a sworn statement and a police report. The FTC also offers a form affidavit which can be used for the sworn statement at www.ftc.gov/bcp/conline/pubs/credit/affidavit.pdf .

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Helpful Tips to increase your Credit Score!?!

2007-11-19T12:13:00.000-05:00

Pay off debt rather than moving it around. Since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score. In other words, say you owe a total of $2,000 on four credit cards, each of which has a $2,000 limit. Your total credit limit is $8,000, of which your total balance ($2,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $4,000, and your $2,000 balance now accounts for 50 percent of that limit.

Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score since you don't have a proven track record, said Jan Davis, an executive vice president at TransUnion. What's more, a new account will lower the average age of your accounts, another factor in your FICO score.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

What elements are the most important factors of a credit history?

2007-11-06T14:24:00.000-05:00

The list below details the approximate value of each aspect of your credit report that is used to generate a credit score. These percentages should only be used as a guide:

35% - your payment history
30% - total amount owed
15% - length of credit history
10% - types of credit used
10% - new credit

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

DON’T BE TRICKED BY SCAMS THAT USE YOUR FINANCIAL INFORMATION TO COMMIT FRAUD, URGES IDENTITY THEFT ASSISTANCE CENTER

2007-10-16T14:52:00.000-04:00

Tens of thousands of consumers fall victim each month to schemes like phishing

WASHINGTON, DC, October 16, 2007— The Identity Theft Assistance Center (ITAC) urges consumers to be careful when sharing personal information, and access to your financial accounts, that can be used to commit fraud and identity theft. “Fraudsters have plenty of tactics in their bag of tricks to make you believe they are acting in your best interests,” said ITAC Executive Director Anne Wallace. “Everyone should have a healthy dose of skepticism when it comes to responding to urgent requests for personal information or access to your financial accounts.”

Wallace urges consumers to be aware of several of the most common scams:

Phishing. Phishing attacks use 'spoofed' e-mails to lead consumers to counterfeit websites designed to trick them into divulging financial data—such as credit card numbers, account usernames, passwords and social security numbers. Criminals use the names and logos of financial services companies to create authentic looking emails. “If you have any doubt about an email’s authenticity, contact your financial services company,” says Wallace.

Pretexting. Pretexting is the practice of getting your personal information under false pretenses. Pretexters sell your information to people who may use it to get credit in your name, steal your assets, or to investigate or sue you. A pretexter may call you posing as a representative of a survey firm, bank, Internet service provider, and even government agency, to get you to reveal your SSN, mother’s maiden name, drivers license number, financial account numbers and other identifying information. “The companies you do business with already have this information,” says Wallace.

Fake Checks. These schemes often involve the promise of great riches—such as foreign business offers and lotteries and sweepstakes. But it also includes work-at-home offers, where they ask you to help process payments by depositing checks or money orders intended for their company into your bank account. You send them the money and you keep the extra as your "pay.” “There’s absolutely no reason someone would give you a check or money order and ask you to wire money in return,” says Wallace. For more information, see www.fakechecks.org.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Did You Know?

2007-10-01T12:51:00.000-04:00

Credit scores are based solely on credit history and don't include in the calculation factos like race, religion, national origin, gender, age, education level or marital status.

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

The Key Factors that Determine Your Credit Score

2007-09-27T12:03:00.000-04:00

Paying your Bills
The most important factor is how you’ve paid your bills in the past, placing the most emphasis on recent activity. Paying all your bills on time is good, paying them late on a steady basis is bad. Having accounts that were sent to collections is worse. Declaring bankruptcy is worst.

Amount of money you owe and the amount of available credit
The second most important area is your outstanding debt which means how much money you owe on credit cards, car loans, mortgages, home equity lines, etc. Also considered is the amount of credit you have available. If you hold possession of 15 credit cards that have a $10,000 credit limit, that’s $150,000 of available credit. People who have a lot of credit available tend to use it, which makes them a less attractive credit risk.

Length of credit risk
The third of factor is the length of your credit history. The longer you’ve had credit, the more points you get.

Mix of credit
The best scores will have a mix of both revolving credit, such as credit cards, and installment credits such as mortgages and car loans.

New credit applications
The final category is your interest in new credit, how many credit applications you’re filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping hurts your score, is when you have previous recent credit stumbles, such as late payments or bills sent to collections

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

Credit Related Facts and Figures

2007-09-11T16:33:00.000-04:00

79% of all credit reports contain mistakes
54% of all credit reports contain personal information that is long outdated, belongs to a stranger, or is otherwise incorrect
30% of all credit reports contain accounts that are closed by the consumer but continue to be reported as open
25% of all credit reports contain errors serious enough to result in the outright denial of credit

Source: Crednology, Inc - The necessity for fair and accurate credit reporting from the three major credit reporting agencies: Equifax, Transunion, and Experian.- 24/7 Online Access http://www.crednology.com

For more info and to order your credit report with FREE credit score please visit www.reliacredit.com