PopSugar

Free Credit Report Scams Aren't Going Away

SavvySugar — Mon, 09 Nov 2009 12:00:23 -0800

By now we all know about the not-so-free nature of those FreeCreditReport.com services; a few of you even say you've fallen for its misleading practices. But even after the government publicly condemned the site, "free" credit monitoring services - which require you to sign up for a paid service, but promise you can cancel at any time - are popping up everywhere.

One friend recently had a particularly nasty experience with one of these companies while apartment hunting. To hear what happened, read more.

An apartment listing on Craigslist requested that she get her own credit report through a specific company. She filled out all the info and put in a credit card when prompted (ouch), but wasn’t able to access the free report she was promised. A week later, charges showed up on her card, but each time she called the company to cancel, she was sent to voicemail. After some Google research revealed that several fraud alerts had already been filed against the company, she reported the charges as fraudulent to her credit card company.

Savvy as we all may be, it’s easier than you think to get sucked into one of these situations. To prevent this from happening to you, keep the following tips in mind:

Only request free credit reports using AnnualCreditReport.com. You can request a free report up to three times a year, once from each of the major reporting agencies. This site will not ask you to enter your credit card number.

Type the Annual Credit Report URL directly into your address bar, rather than clicking on a link from a third party to reach the site. If you’re redirected to a site that isn’t one of the major reporting agencies (Equifax, TransUnion, or Experian), don’t continue with the process.

If at any point you’re asked for a credit or debit card number, walk away. Companies only request a credit card for one reason: they plan to charge you. Period.

Have you ever had an experience with one of these companies? Do you have any other tips to add?

Ask Savvy: Why Was My Credit Card Application Denied? Part II

SavvySugar — Wed, 26 Mar 2008 09:52:56 -0700

Dear Savvy,

I'm new at this credit thing and I'm not sure when or why I should check my credit report. I have never had a credit card (still don't) but I got denied for one a few weeks ago and I don't know why. Does checking my credit report worsen my credit score? Does getting denied for a card? How often should I check my credit report and/or score? What's the difference?! Obviously I am not financially savvy! No one ever explained to me how to manage credit so now I'm trying to get some and I'm completely lost!

To see my continued answer just read more

Your credit score is derived from the information on your credit that measures how credit-worthy you are. Your credit report contains information about how responsibly you've used credit and includes details like your history of debt repayment. Your credit score is a number that tells lenders what kind of borrower you are, and in order for a credit score to be generated you must have had credit for at least six months. The higher your score, the more favorable interest rates you'll be offered for loans and credit cards.

Even though you haven't developed a credit history, checking your credit report is a useful tool because it lets you know if you've been a victim of identity theft. If any accounts were opened using your personal information you'll know by looking at the details on your report. You're entitled to three free credit reports each year (one per national credit bureau including Equifax, TransUnion, and Experian), so a good approach is to run your report once every four months using a different credit bureau each time.

If you missed my answer to part one of this question, you can find it here.

Source

Money Tip: Get Your Credit-to-Debt Ratio Down by May

SavvySugar — Thu, 28 Feb 2008 14:06:15 -0800

Last week I mentioned that Fair Issac (the company that calculates consumer credit ratings for lenders) would be rolling out a new formula for calculating your credit score, and that some factors would be given different weights than they had with the old formula. According to CNN delinquencies (late payments) on credit cards are the highest they've been in three years, and a solid record of timely payments will continue to be an important factor in calculating your score. They also spoke with Craig Watts from Fair Issac who warns that if you're using 50 percent or more of your credit limit, your credit score will take a bigger hit than it already has when the new FICO scoring system is rolled out in May.

Source

Ask Savvy: How Do I Get My Bad Credit Under Control? Part I

SavvySugar — Fri, 09 Jan 2009 07:15:45 -0800

Dear Savvy,

I have bad credit and am trying to get it under control. Can you give me any tips on how to control it quickly? Can I get an apartment with bad credit? And is me having bad credit stopping me from getting a better paying job?

See my answer to the first part of this question when you read more.

Savvy says: Not everyone has the same credit score, but all credit scores are based on the same components: Payment history, outstanding debt, length of credit history, any new credit, and types of credit used. Payment history and outstanding debt together make up 65 percent of your total score, so if you have bad credit, chances are these are the areas you should focus on most when repairing your credit.

Your credit score won't turn around in a dash, but adopting these habits will steadily improve your score as you prove to creditors that you're a responsible borrower. Here are the most important steps in repairing your credit - commit to them and hold yourself accountable to each of these items.

Make sure your credit report doesn't have any errors that could be lowering your score. Report any errors immediately.
Pay more than the minimum payment on your credit cards until you've paid them all off. Remember that closing cards can negatively affect your debt to credit ratio, so be sure to keep them open, particularly the ones you've had the longest.
Pay your bills on time, without fail. Whether or not you've made punctual payments is the heaviest factor in your score.
If you continue using your cards, be sure to never go over your credit limit. This puts you at risk for interest rate hikes and a dent in your credit score.

Stay tuned for my answer to part two of the featured question!

Source

What to Know About the Extended Homebuyers Tax Credit

SavvySugar — Mon, 09 Nov 2009 06:00:09 -0800

Stimulating the economy is the motivation behind many discussions and decisions coming from the White House these days. The original $8,000 first-time homebuyers credit was developed with economic improvement in mind, and the measure's popularity led to President Obama signing an extension and expansion of the credit on Friday.

The tax credit was scheduled to expire on Dec. 1, but the new version comes with a later date and widens the range of those eligible to claim the credit. Learn more about the new tax credit when you read more.

Homebuyers must sign a contract before April 30 and close on the home by June 30.
The previous credit was limited to first-time buyers or buyers who haven't owned a home in the past three years. The new version has been expanded to include those who have owned a home for five out of the past eight years and want to buy a new one.
First-time homebuyers are still eligible to receive the $8,000, while existing homeowners can qualify for a $6,500 tax credit.
The income limits have been significantly raised. With the previous credit, single people making more than $75,000 or couples earning more than $150,000 didn't qualify for the full credit. Under the new version, single buyers can earn up to $125,000 while a married couple can earn $225,000 and still get the full credit.

Are you hoping to take advantage of the extended homebuyers tax credit?

Ask Savvy: How Do I Get My Bad Credit Under Control? Part II

SavvySugar — Fri, 09 Jan 2009 11:30:43 -0800

Dear Savvy,

I answered the first part of this question earlier. See my answer regarding getting an apartment and a better paying job when you read more.

Savvy says: Let's start with the question about getting an apartment with bad credit. A low credit score indicates that you haven't been paying your bills on time and puts up a red flag to landlords reviewing you as a possible tenant. Landlords want tenants who pay rent on time and all they know of your financial habits is what shows on your credit report.

I've heard that some landlords don't require credit checks, though in all of my rental experience I've never come across this scenario myself. Landlords will likely ask for a larger security deposit up front if your credit is bad, so if you're thinking of renting it's a good idea to start saving up for moving costs. Asking someone close to you to cosign your lease may be an option, but realize it's a big favor: If you don't pay your rent, your cosigner is on the hook for the payments.

As for bad credit preventing you from getting a better paying job, my answer is that if you're interviewing for a position that involves finances, confidentiality, and handling money, then your credit probably contributes to your rejection. Some companies check applicants' credit regardless of the specific position under consideration, but not all companies utilize credit checks as part of the hiring process. So, your score may be a factor in your ability to get a better paying job, but there's no way for me to say for sure.

Source

Ask Savvy: Do I Really Need to Know My Credit Score?

SavvySugar — Thu, 13 Mar 2008 09:32:14 -0700

This excellent question was posted by lemonfizz in my Ask Savvy group: I check my credit reports regularly for errors, but I've never paid extra to find out my credit score because I don't have any plans to take out a mortgage or buy a car (I live in the city and rent). Is there any other reason I'd need to know my credit score?

To see my answer just read more

The reason you need to have a good credit score is so that you can qualify for the best interest rates for things like homes and cars, but also for credit cards. Even if you’re not in the market for a new vehicle or a new abode, your credit score should still be on your radar.

Your credit score is the biggest indicator of your overall financial health, and when your credit score is generated the credit bureau running the report identifies reason codes. These reason codes are what you should be paying attention to - they tell you what the reasons are for any dings in your score.

While you’re not in any rush to borrow any time soon, attending to the reason codes now will allow you to borrow more cheaply when you’re ready to make a bigger purchase or require additional credit. So, if your reason codes are telling your credit to debt ratio is too high, you can work on getting that ratio down so that you get the best interest rates when the time comes. For now, you can treat checking your credit score like getting a physical - you just want to know you're doing everything you can to be financially healthy.

Money Tip: When Not to Use Your Credit Card

SavvySugar — Tue, 12 May 2009 13:30:13 -0700

An excellent credit score will get you the best interest rates, so you want to ensure lenders will see your score at its very best. You already know that it's a bad idea to apply for new credit in the months leading up to applying for a loan, but CNN Money has another tip regarding the credit cards you already own.

To play it safe, they recommend keeping your cards under wraps during the month before you know you'll be applying for a loan and explain that, "Even if you pay off your balances at the end of the month, there's a chance a lender might pull your score the day before those payments are recorded, making it look as though you're tapping your credit."

Simply put: keep your paws off your cards before applying for a loan for a better chance at getting the best interest rates. Simple and effective, it's a must-do in my book.

Source

Holding on to Your Credit Identity Once You're Married

SavvySugar — Thu, 17 Jul 2008 08:04:34 -0700

You may assume your husband's last name when you get married and you might even merge bank accounts. Just as you maintain an individual identity outside of your husband and your new last name, you need to protect yourself by sustaining your own credit profile. This can be accomplished even if you combine checking and savings accounts. Find out how to keep your credit identity and why it's so important when you read more.

Nobody wants to think about the end of the road when you're newlyweds, but we all know that forever does not always last that long. Maintaining your personal credit identity is a way of protecting yourself and assuring that you'll have access to credit if your married life ends. Shared credit cards sometimes make sense, but even if you go this route, keep the credit cards you had before marriage.

You can always add your husband as an authorized user, and he can do the same with his card, but you need to hold on to your premarried credit history. The credit bureaus won't calculate a FICO score for someone whose credit history has been inactive for more than six months: If your accounts go unused for a long period of time, this inactivity can work against you and leave you with limited, unfavorable credit options.

Source

Goodbye Free Stuff, Hello Better Credit Card Practices

SavvySugar — Fri, 25 Sep 2009 04:30:23 -0700

Times have changed since I was in college, and I'm not just referring to the escalating cost of tuition. Banks hawking everything from free t-shirts and water bottles to free pizza used to set up their tables around the university center attempting to attract unknowing students to sign up for credit cards. As of February 22, 2010, those banks won't be allowed to coerce young adults with free stuff in exchange for completing credit card applications.

The uprooting of these tricky tactics is part of a farther reaching credit card reform act, which also includes a clause disallowing those under age 21 to be approved for a card without a co-signer if the applicant doesn't have proof of income. The goal is to reduce the number of students who accumulate consumer debt because they don't understand the implications of using credit irresponsibly.

Did you graduate with credit card debt that could have been prevented if you were better educated about credit?