Understanding the Ins and Outs of nYour Credit Score

As recent as a few years back, the term "Credit Score" was not very commonly used in our society. While there were who understood the term and its purpose, the mass majority, although realizing that there was a system out there that their credit, they did not have a term to stick to it.

Today, however, due to a number of factors such as increase Identity Theft and mass media marketing campaigns there are very few who are not aware of the term Credit Score. The goal of this article is to add understanding on the personal to the recognition of that term.

A Credit Score is a number between 300 and 850 based on a statistical analysis of an individual's credit activity. It is used to represent the credit worthiness of an individual. How likely that the individual will pay his or her debts. A credit score is based on their credit report information which is typically sourced from credit bureaus and credit reference agencies, typically from the three major credit bureaus.

Lending institutions, such as banks, finance companies, mortgage lenders, and credit card companies, use an individual's Credit Score to evaluate the potential risk posed by lending money to that individual. Lenders use Credit Scores to determine who qualifies for a loan, at what interest rate the loan is issued, and what credit limits are determined.

The use of credit scoring prior to granting credit is a trusted system throughout the industry. Credit scoring is not limited to banks, however. Organizations, such as mobile phone companies and government departments employ the same techniques.

While there are many others, such as NextGen, VantageScore and the CE Score, The most widely known score in the United States is FICO, which is most widely used in the mortgage industry. FICO is an acronym for Fair Isaac Corporation, the company that provides the most well-known and most widely used credit scoring system in the United States.

The FICO score is calculated by applying statistical methods, developed by Fair Isaac, to information in one's credit file and is primarily used in the consumer banking and credit industry. FICO scores show how likely it is that a borrower will default. No public information is available to determine what the scores mean in terms of statistics. A separate score, BNI, is used to indicate likelihood of bankruptcy.

As stated, banks and other lending institutions use Credit Scores as factors in their lending decisions. Whether credit is denied or approved, what interest is charged, what income level and asset verification is required is all based on an individual's credit score.

The FICO score actually uses slightly different scoring methods to rate a consumer's suitability for three different types of credit; mortgages, auto loans, and consumer credit. Each reflecting the different credit risks of these various types of lending. It is not unusual for these scores to differ by as much 50 points or more for the same borrower.

There are three major credit reporting agencies in the United States. Although often times inaccurately referred to as "credit bureaus", these agencies; Equifax, Experian and TransUnion, also calculate their own credit scores. These additional scores differ depending on what they are meant to predict, what statistical methods used to determine a score, and what information is used and how it is weighted.

These additional Credit Scoring Systems are numerous and are agency specific. For example, Beacon, Beacon 5.0, Beacon 96, and Pinnacle scores are available only from Equifax. Empirica, Empirica Auto 95, Precision Score, and Precision 03 are available only from TransUnion. And, Fair Isaac Risk Score at Experian.

These various Credit Scores are developed for the different agencies by Fair Isaac, each differs and are periodically updated to reflect current consumer repayment behavior habits. The NextGen Score is a scoring model designed for consumers.

In an effort to make credit scoring more consistent across the board, in 2006 the big three credit reporting agencies introduced Vantage Score. Vantage Score uses a different number range from the FICO score. It ranges from 501 to 990 and also assigns letter grades from A to F to specific ranges of scores.

A consumer's Vantage Score may differ from agency to agency, but the difference would be entirely due to differences in the information reported to the various agencies, not due to differences in scoring systems. Since FICO is still widely used by lenders, the agencies continue to offer FICO scores (or their closest equivalent) as well.

Most credit scores use a multiple-scorecard design. Each version may use individual scorecards, and an individual potential borrower is typically compared with other previous borrowers. In other words, a borrower with one 30-day late payment will be scored against a population with some similar delinquency. A borrower with two 30-day late payments will be scored against a population with like credit faults. The individual is then graded according to which variables indicate a risk within that group.

Nearly all large banks also build and use their own systems for credit scoring purposes, and are often times in conjunction with outside scoring formulas.

The systems used to generate credit scores are subject to federal regulations. The Federal Reserve Board's Regulation B, which implements the Equal Credit Opportunity Act, expressly prohibits a credit scoring system from considering any "prohibited basis" such as race, color, religion, national origin, sex, or marital status. It also stipulates that credit scoring systems must be "empirically derived" and "statistically sound".

In addition, if an adverse action, a denial of a credit application, is taken as a result of the credit score then the specific reasons for the denial must be provided to the individual denied. The statement "credit score not high enough" is insufficient. The reasons for denial must be specific; "too many delinquencies 60 days or greater" and such.

Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history. Although the exact formulas for calculating credit scores are closely guarded secrets, the Fair Isaac Corporation has disclosed the following components and the approximate weighted contribution of each:

• 35% punctuality of payment in the past (30 Days Past Due)


• 30% the amount of debt, expressed as the ratio of current revolving debt to total available revolving credit


• 15% length of credit history


• 10% types of credit used


• 10% recent search for credit and/or amount of credit obtained recently

These percentages offer a limited guidance in understanding a credit score. For example, the 10% of the score allocated to "types of credit used" is undefined, leaving consumers unaware what type of credit mix to pursue. "Length of credit history" is also a murky concept; it consists of multiple factors two being the oldest account open and the average length of time an account has been open.

Interestingly, although only 35% is attributed to punctuality, if a consumer is substantially late on numerous accounts, his score will fall far more than 35%. Bankruptcies, foreclosures, and judgments affect scores substantially, but are not included in the very vague pie chart provided by Fair Isaac.

A FICO score generally has a max of 850 and a minimum of 300. It exhibits a left-skewed distribution with a median around 723. The performance of the scores is monitored and the scores are periodically aligned so that a lender normally does not need to be concerned about which score card was employed.

Because the three major credit agencies have their own, independent databases, each of us actually has three credit scores for any given scoring system. As these databases are independent of each other, they may contain entirely different data. Many lenders will check an applicant's score from each bureau and use the median score to determine the applicant's credit worthiness.

As a result of the FACT Act (Fair and Accurate Credit Transactions Act), each legal U.S. resident is entitled to one free copy of his or her credit report from each credit reporting agency once every twelve months. To guard against inaccurate information or fraud more often than yearly, one can request a report from a different credit reporting agencies available on the net. This information is available from a number of websites across the net that offer an free credit report and use of their services for 30 days. After which, there is a monthly fee involved. The fee is nominal compared to the necessity of protecting your credit in today's highly technological society where identity theft is becoming more prevalent.

In a time where identity theft and credit fraud in on the rise, the fee these firms charge seems like a small amount to pay to protect your credit and your good name. Having a good Credit Score is becoming more and more prevalent in our society. Here are a few examples of how:

In September 2004, TXU (a Texas utility company) announced it would begin setting individualized electricity prices based on credit score. However, due to negative press and pressure from the Texas Public Utility Commission, the plan was not implemented.

Credit scores are often used in determining prices for auto and homeowner insurance. Recently, some of the agencies that generate credit scores have also been generating more specialized insurance scores, which insurance companies then use to rate the quality of potential customers. These scores are unavailable to consumers.

Many employers reserve the right to do a credit check of job applicants, in the same manner they reserve the right to drug test potential employees. the fact is that your Credit Score is important. Rebuild-Credit.us is a sight committed to providing consumers with quality information concerning credit, how to get it, and how to maintain a quality credit score. It is recommended you take the time to visit them and read through the numerous articles and reports there.

Should You Get A Gold Or Platinum Credit Card?

What are the benefits of having a gold or platinum credit card?
If you're looking for credit, be wary of some 'gold' or 'platinum' card offers promising to get you credit cards or improve your credit rating.

While sounding like general-purpose credit cards, some 'gold' or 'platinum' cards permit you to buy merchandise only from specialized catalogues. Marketers of these credit cards often promise that by participating in their credit programs, you will be able to get major credit cards (such as an unsecured Visa or MasterCard), lines of credit from national specialty and department stores, better credit reports, and other financial benefits.

Rarely, however, can you improve your credit rating or get major credit cards by buying 'gold' or 'platinum' credit cards. Often the only major credit card you might get is a secured credit card that requires a substantial security deposit with a bank. In addition, many of these credit-card companies do not report to credit bureaus as they promise, and their cards seldom help secure lines of credit with other creditors.

Such 'gold' and 'platinum' credit-card offers usually are promoted through television or newspaper advertisements, direct mail, or telephone solicitations using automatic dialing machines and recorded messages. People who live in lower-income areas often are the target of these sales pitches.

Watch out for...

Be wary of 'gold' and 'platinum' card promotions that:

Charge upfront fees, without saying there may be additional costs.

Some 'gold' or 'platinum' card promoters charge $50 or more for their cards. Only after you agree to pay this fee are you told there's an additional fee, sometimes $30 or more, to get the merchandise catalogues. Yet, these catalogs are the only places you can use the cards.

Use '900' or '976' telephone exchanges.

Ads for 'gold' and 'platinum' cards may urge you to call numbers with '900' or '976' exchanges for more information. You pay for phone calls with these prefixes -- even if you never get the 'gold' or 'platinum' card. The cost for these calls can be high.

Misrepresent prices and payments for merchandise.

You're not allowed to charge the total amount when you buy merchandise from 'gold' or 'platinum' card catalogues. Instead, you often must pay a cash deposit on each item you charge -- an amount usually equal to what the company paid for the product. Only after you pay your deposit can you charge the balance. Also, catalogue prices can be much higher than discount store prices.

Promise to easily get you "better credit."

Marketers of 'gold' and 'platinum' cards often claim its easy to get major credit cards after using their cards for a few months. In fact, the only major cards you usually can get through these marketers are secured. A secured card requires you to open and maintain a savings account as security for your line of credit. The required deposit may range from a few hundred to several thousand dollars. Your credit line is a percentage of the deposit, typically 50 to 100 percent.

How to protect yourself

Follow these precautions to avoid becoming a victim of 'gold' and 'platinum' card scams:

Think twice about any offer to get "easy credit."

Is It Easy to Establish Credit History?

It goes without saying that you won't be able to get the best credit products with advantageous features without good credit history. However, building hood credit history is not so easy as it may seem. It requires a lot of time and efforts.

Today many people face the problem of establishing sufficient credit history. It may seem quite easy to apply for a plastic. However, there is no guarantee that this or that credit card will be useful for building good credit. The fact is that plastics for no credit score are not so good, as those for good or excellent credit history. What is the best choice for people with no credit? In fact there are several tips for people who plan to establish credit. Learn how to build credit history and use your plastics responsibly.

It's true that it is almost impossible to get the best credit card, if you have no credit history. As a rule, creditors are extremely particular about this very point. And it is a kind of the endless circle: for obtaining plastics you need payment history, and to establish your credit history you need to carry credit cards. Nevertheless, you still have an opportunity to establish your credit history, even if most creditors are not willing to give you plastics.

Mind that there are banks and credit card companies specializing in credit products for people with bad or no credit history. And these credit products can be a helping hand for people who do their best to build a solid credit history. For example, credit cards from First PREMIER bank can be the best choice for you. Having these plastics you may be sure that all your credit activity will be reported to 4 credit bureaus.

Remember that since you don't have credit history, your creditors will take other factors into account. These factors help them to estimate your creditworthiness. For instance, one of these factors can be your employment history. Your steady income, the way you hold your job, and periods of your unemployment will be more important for your creditors than the words about your trustworthiness and responsibility.

Secured credit cards can also help you to establish your credit history. One of the peculiarities of these plastics is that to activate your account you are to deposit a sum of money in the bank. This amount of money will determine your credit line. These credit cards will prevent you from getting into debt, as you won't be able to spend more than you deposited.

So, no credit history is not a problem. You still have a chance to establish your credit history and build your financial future.

Credit Information

You undertake credit, when a body or a nice person you commits a sum of money.
There are two major extractions of credit. Mortgage loans or hook*s and retired or bull market loans coexistent cope with a specific object or objects - for example, a new junkheap or a home and The revolving credit card payments through can radiate you access to a certain amount of loose change, you can run through* as you push, to a idea range of businesses and old man retail relief.

Repayment
The loans regularly are commercial in stable doses within an agreed time period. The mortgages or home loan can be paid off see to protean doses, but greatest personal write-offs expound proportionate, scantly equal redemptions. If you score* to make uncommon big buy, when you go at* to correspond a uncollectable bill, have to flap* a new write-off. The spinning credit means that you have square had access to the amount of your credit rampart that has not been spent. Every installment payments you pay off a human of the pending debt, the small change of the credit gully you are repro* available to drain. So, if you have a credit limit of $1,000, spend $300 and $100 off, in consequence you have available for $ 800 to spend.
Irrespective of which type of loan you choose, be sure you recompense the instalments on time, unequal you may renovation depletion allowance sanctions.

Scene*
In order to meet the lending risk and to enact a gravy* from their money, lenders generally charge interest merited on write-offs and revolving debenture. That should keep in mind time immemorial you calculate on your installments.
For example, if you borrow $ 100 and the stunt is payable in annual index of chaff 10%, the tot up* incur debt will be 110$. This is megastar as spare interest.

For example, if you owe $ 100 and charged 10% compounded annually at the end of the highest grade year will owes $ 110. In the second year, the banker will bid 10% of time was total, and will add it to a pending debt, and so it ought to 121 € and so make. The venture may be more a thousand times any time - one day, one week, one remote ages and so on.

Loans to render fixed amount of interest calculated in publicist and farther to the little by little. There is often a fine, if you want to settle the pending debt earlier than they collective.
Unoften you can avoid paying interest, if you pay improv* total amount you proximate to date to be paid the first instalment.

More loan article http://write-off.elakbar.net
More stock http://www.canon-library.net and http://www.findingit.net

How To Use The Fair Credit Billing Act (FCBA) To Your Advantage

Have you ever been billed for merchandise you returned or never received?

Has your credit card company ever charged you twice for the same item or failed to credit a payment to your account? While frustrating, these errors can be corrected. It takes a little patience and knowledge of the dispute settlement procedures provided by the Fair Credit Billing Act (FCBA).

The law applies to "open end" credit accounts, such as credit cards, and revolving charge accounts - such as department store accounts. It does not cover installment contracts - loans or extensions of credit you repay on a fixed schedule. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.

What types of disputes are covered?

The FCBA settlement procedures apply only to disputes about "billing errors." For example:
- unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
- charges that list the wrong date or amount;
- charges for goods and services you didn't accept or weren't delivered as agreed;
- math errors;
- failure to post payments and other credits, such as returns;
- failure to send bills to your current address - provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and
charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

To take advantage of the law's consumer protections, you must:
- write to the creditor at the address given for "billing inquiries," not the address for sending your payments, and include your name, address, account number and a description of the billing error.
- send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.

Send your letter by certified mail, return receipt requested, so you have proof of what the creditor received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.

What happens while my bill is in dispute?

You may withhold payment on the disputed amount (and related charges), during the investigation. You must pay any part of the bill not in question, including finance charges on the undisputed amount.

The creditor may not take any legal or other action to collect the disputed amount and related charges (including finance charges) during the investigation. While your account cannot be closed or restricted, the disputed amount may be applied against your credit limit.

Will my credit rating be affected?

The creditor may not threaten your credit rating or report you as delinquent while your bill is in dispute. However, the creditor may report that you are challenging your bill. In addition, the Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants who exercise their rights, in good faith, under the FCBA. Simply put, you cannot be denied credit simply because you've disputed a bill.

Ever Have A Problem With Your Credit Card Company?

What do you do if your credit card bill is incorrect?

What happens if you complain, but you are found to be wrong? You need to know what your rights are.

What if...

...the bill is incorrect?
If your bill contains an error, the creditor must explain to you - in writing - the corrections that will be made to your account. In addition to crediting your account, the creditor must remove all finance charges, late fees or other charges related to the error.

If the creditor determines that you owe a portion of the disputed amount, you must get a written explanation. You may request copies of documents proving you owe the money.

...the bill is correct?
If the creditor's investigation determines the bill is correct, you must be told promptly and in writing how much you owe and why. You may ask for copies of relevant documents. At this point, you'll owe the disputed amount, plus any finance charges that accumulated while the amount was in dispute. You also may have to pay the minimum amount you missed paying because of the dispute.

If you disagree with the results of the investigation, you may write to the creditor, but you must act within 10 days after receiving the explanation, and you may indicate that you refuse to pay the disputed amount. At this point, the creditor may begin collection procedures. However, if the creditor reports you to a credit bureau as delinquent, the report also must state that you don't think you owe the money. The creditor must tell you who gets these reports.

...the creditor fails to follow the procedure?
Any creditor who fails to follow the settlement procedure may not collect the amount in dispute, or any related finance charges, up to $50, even if the bill turns out to be correct. For example, if a creditor acknowledges your complaint in 45 days - 15 days too late - or takes more than two billing cycles to resolve a dispute, the penalty applies. The penalty also applies if a creditor threatens to report - or improperly reports - your failure to pay to anyone during the dispute period.

An important caveat

Disputes about the quality of goods and services are not "billing errors," so the dispute procedure does not apply. However, if you buy unsatisfactory goods or services with a credit or charge card, you can take the same legal actions against the card issuer as you can take under state law against the seller.

To take advantage of this protection regarding the quality of goods or services, you must:
- have made the purchase (it must be for more than $50) in your home state or within 100 miles of your current billing address;
- make a good faith effort to resolve the dispute with the seller first.

The dollar and distance limitations don't apply if the seller also is the card issuer - or if a special business relationship exists between the seller and the card issuer.

Other billing rights

Businesses that offer "open end" credit also must:
- give you a written notice when you open a new account - and at certain other times - that describes your right to dispute billing errors;
- provide a statement for each billing period in which you owe - or they owe you - more than one dollar;
- send your bill at least 14 days before the payment is due - if you have a period within which to pay the bill without incurring additional charges;
- credit all payments to your account on the date they're received, unless no extra charges would result if they failed to do so. Creditors are permitted to set some reasonable rules for making payments, say setting a reasonable deadline for payment to be received to be credited on the same date; and
- promptly credit or refund overpayments and other amounts owed to your account. This applies to instances where your account is owed more than one dollar. Your account must be credited promptly with the amount owed. If you prefer a refund, it must be sent within seven business days after the creditor receives your written request. The creditor must also make a good faith effort to refund a credit balance that has remained on your account for more than six months.

Suing the creditor

You can sue a creditor who violates the FCBA. If you win, you may be awarded damages, plus twice the amount of any finance charge - as long as it's between $100 and $1,000. The court also may order the creditor to pay your attorney's fees and costs.

If possible, hire a lawyer who is willing to accept the amount awarded to you by the court as the entire fee for representing you. Some lawyers may not take your case unless you agree to pay their fee - win or lose - or add to the court-awarded amount if they think it's too low.

How Do You Establish A Credit History?

Getting credit can be a real Catch-22. You need credit to get credit. If you don’t have credit, you can't get credit. What do you do?


If you’re denied a loan or credit card because you have no credit history, consider establishing one. The best way is to apply for a small line of credit from your bank or a credit card from a local department store. Make sure you list your best financial references. Make payments regularly and make certain the creditor reports your credit history to a credit bureau.

If your spouse dies

Under the Equal Credit Opportunity Act (ECOA), a creditor cannot automatically close or change the terms of a joint account solely because of the death of your spouse. A creditor may ask you to update your application or reapply. This can happen if the account was originally based on all or part of your spouse’s income and if the creditor has reason to believe your income alone cannot support the credit line.

After you submit a re-application, the creditor will determine whether to continue to extend you credit or change your credit limits. Your creditor must respond in writing within 30 days of receiving your application. During that time, you can continue to use your account with no new restrictions. If you’re application is rejected, you must be given specific reasons, or told of your right to get this information.

These protections also apply when you retire, reach age 62 or older, or change your name or marital status.

Kinds of accounts

It’s important to know what kind of credit accounts you have, especially if your spouse dies. There are two types of accounts - individual and joint. You can permit authorized persons to use either type.

An individual account is opened in one person’s name and is based only on that person’s income and assets.

If you’re concerned about your credit status if your spouse should die, you may want to try to open one or more individual accounts in your name. That way, your credit status won’t be affected.

When you’re applying for individual credit, ask the creditor to consider the credit history of accounts reported in your spouse’s or former spouse’s name, as well as those reported in your name. The creditor must consider this information if you can prove it reflects positively and accurately on your ability to manage credit. For example, you may be able to show through canceled checks that you made payments on an account, even though it’s listed in your spouse’s name only.

A joint account is opened in two people’s names, often a husband and wife, and is based on the income and assets of both or either person. Both people are responsible for the debt.

Account “users”

If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, a creditor who reports the credit history to a credit bureau must report it in your spouse’s name as well as in yours (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of any other authorized user.

If you’re denied credit

The ECOA does not guarantee you’ll get credit. But if you’re denied credit, you have the right to know why. There may be an error or the computer system may not have evaluated all relevant information. In that case, you can ask the creditor to reconsider your application.

If you believe you’ve been discriminated against, you may want to write to the federal agency that regulates that particular creditor. Your complaint letter should state the facts. Send it, along with copies (NOT originals) of supporting documents. You also may want to contact an attorney. You have the right to sue a creditor who violates the ECOA.

Negative Credit Can Affect Your Job Search

Many employers run credit checks before hiring new employees.


Bad credit can affect your ability to get more credit. Did you know it also can affect your ability to get or keep a job? Employers often use a credit report when they hire and evaluate employees for promotion, reassignment, or retention.

The military has been doing this for years for personnel that require a security clearance. They run background checks with local police, the FBI, and financial institutions. The military does not want to grant a security clearance to individuals with a history of bad credit. This would make them a risk of stealing classified material and selling it to cover their debt.

Add in the current sub-prime lending mess and thousands of foreclosures, you can see why employers are concerned that their new employees have pristine credit. No one wants to hire someone that may be a risk due to huge credit card debt or a mortgage in default.

According to the Fair Credit Reporting Act (FCRA), which is enforced by the Federal Trade Commission (FTC) and your state Attorney General, an employer must get your permission to look at your credit report. If you don’t get a job because of information in your report, the employer must show you the report and tell you how to get a copy from the consumer reporting company. There is no charge for the report if you request it within 60 days of getting notice that you did not get the job.

The FCRA requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. To order your free annual report from one or all national consumer reporting companies, the annual credit report web site, call toll-free 877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281. Do not contact the three nationwide consumer reporting companies individually. They provide free annual credit reports only through 877-322-8228, their web sites, and Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281.

According to the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To protect your rights under the law, contact both the consumer reporting company and the information provider to dispute any information.

It is hard enough to find or maintain a good job without having credit worries spoil it. Keep your credit record clean; check it often, and good luck with the job search.

What Do You Do When You Finally Pay Off Your Credit Card Debt?

After you pay off credit card debt, you may want to consider putting all of your credit cards in the blender and turning them into mulch. The weight of the credit card debt is finally off of your shoulders and you don't want to go through it again.

The problem is, it is darn near impossible to live without a credit card or two. Otherwise, how do you buy online, book a flight, or rent a car? You can still use a credit card after you have taken care of your debt, just do so in moderation.

Credit card debt is a very big problem that is being faced by a lot of people who have been irresponsible and undisciplined in the use of their credit card. Though some might have landed up with credit card debt due to some unfortunate event or emergency in their life, most people carry a credit card debt due to their own financial mismanagement.

There are a lot of ways to pay off credit card debt and a lot of people do achieve this feat. Surely, to be able to pay off credit card debt is really a great achievement in itself for not everyone is able to pay off credit card debt. It takes a lot of discipline, restraint, planning and perseverance to finally pay off credit card debt. However, there is more to paying off credit card debt then just being able to pay off your credit card bills.

What happens to your life after you pay off your credit card debt successfully? As mentioned before, of all the people who try to pay off credit card debt not everyone is successful. However, some people fail after they have succeeded in paying off credit card debt. These are those people who let themselves loose and go on a spending spree as soon as they pay off credit card debt.

Soon, these people again end up with a credit card debt and are again trying to pay off a stack of bills. So, it’s not enough to just pay off credit card debt, it’s equally important to maintain a debt-free status even after you pay off credit card debt; only then can you enjoy a stress-free life in the world of credit cards.

So learn your lessons well and do not let yourself wander down the path to more credit card debt. Most of the rules that you followed when you were trying to pay off credit card debt, will also hold good after you have paid off your credit card debt.

Here is a quick synopsis of things that you should take care of even after you pay off credit card debt:

1) Do not overspend. Giving in to the sale offers for something that you don’t really need, is a big mistake that leads to overspending

2) Always remain within 70% of your credit limit.

3) Make credit card bill payments in time and in full.

4) Don’t hold more than 2 credit card accounts (two are enough for anyone)

These are just very basic things you can do to keep your credit under control; you can add more based on your own experience and knowledge.

Do You Qualify For a College Student Credit Card?

Credit card companies are looking for loyal customers and have started marketing to high school and college students.

College credit cards are the credit cards that have been specially designed for college students. College credit cards are more popularly known as student credit cards. College credit cards allow the students to experience the benefits of credit cards much earlier in their life.

Through college credit cards, the college students are able to learn more about credit cards and their use. In fact, for most of the students, their college credit card is their first credit card that acts as a gateway to the world of credit cards. Some other students might have previously used supplementary credit cards linked to their father’s credit card account; however, for such students too, their college credit card is the first one that is truly theirs.

College credit cards are not very different from other types of credit cards in the basic sense; they function in the same way as any credit card would. However, there are some differences, which basically arise from the fact that college credit cards are used by people who have no prior experience with credit cards and who perhaps don’t understand the concept of credit cards completely.

So, the credit card supplier is at risk with issuing credit cards (college credit cards) to such people whom he is not sure about. Most of the students don’t have a credit history either. In such a case, the supplier of college credit card cannot be sure of receiving the credit card bill payments in time (and even receiving them at all).

To counter such risks, the supplier of college credit card requires the parent of the student to co-sign the college credit card application form as a guarantee. Moreover, the credit limit on college credit cards is generally around $500-$1000 per month, which is lower than what it is for other credit cards (this credit limit is generally sufficient to fulfill the typical needs of a student).

Another risk mitigation instrument used by the college credit card suppliers is the interest rate or APR. The APR on college credit cards is generally higher than that for other credit cards. Again, this is done to dissuade the students from overspending on their college credit card (and finally not being able to pay their credit card bills).

However, if we were to look at these impositions in a positive sense, we would find that these are actually in favor of the student (who is still getting trained to take on the real world of credit cards). Moreover, college credit cards also help the students in establishing a (good) credit history which is another important benefit that becomes handy when the student needs any type of loan at a later stage in his/her life.

So, college student credit cards are really something that every student should consider going for. As long as the cards are not misused, getting a credit card while still in college can be a very good learning experience.

Credit Card Rates And APR's

Do you know how much you are really paying in credit card interest?

What’s the thing that is most prominent on any credit card ad? Well, it’s the credit card rate (or the APR, as we know it). The credit card rate is the most publicized thing in the world of credit cards.

A lot of people just compare the credit card rate of various credit cards and just go for the one that is offering the lowest credit card rate (or APR). Credit card rates are, in fact, one of the most important factors in the selection of a credit card (though not the only factor). Therefore, a proper understanding of credit card rates is even more necessary.

So, what is a credit card rate or APR? Very simply, credit card rate is the rate of interest that the credit card supplier will charge you with on the amount you owe them. The credit card supplier will charge you an interest only if you don’t make full payments in time.

Annual percentage rate (APR) is an expression of the effective interest rate that the borrower will pay on a loan, taking into account one-time fees and standardizing the way the rate is expressed. In other words the APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit granted. APR is intended to make it easier to compare lenders and loan options.

When you receive your credit card bill, it specifies the full amount you owe the credit card supplier. It also specifies the minimum payment that you must make (by a particular date), in order to avoid incurring a late fee and other inconvenience. You have the option of making either a full payment or just the minimum payment. If you make a full payment (by the due date), you are not charged any interest.

However, if you decide to go with the minimum payment or some amount that is lesser than the full amount, the credit card supplier will charge interest based on the credit card rate and the balance amount. This credit card rate is the interest rate that you agreed with them at the time of applying for the credit card. The credit card rate or the annual percentage rate, as is obvious, is an annual interest rate.

The credit card suppliers use this annual credit card rate to calculate the monthly credit card rate and then they calculate the interest on the balance amount that you owe them.

The balance amount here is simply = Full amount – (payment made by you). This interest is added to your balance for the next month (at the time of next billing cycle). If you again make a partial payment, the new balance is calculated again and the credit card rate (monthly one) applied to it for calculation of new interest; and it keeps going on and on until you make the full payment.

That’s how credit card rate acts in this vicious circle. So, credit card rate is termed as the most important consideration in choosing a credit card.

American Express Blue Or Green Credit Cards

Green or Blue? Which American Express card is right for you?

Also known as AMEX, American Express is easily one of the most recognized names in the world of credit cards. Even though many people have Visa or MasterCard credit cards, they are still interested in AMEX. With Visa, MasterCard, and AMEX being the most popular and preferred types of credit cards, they are all great although there are also differences between them as well.

Both Visa and MasterCard are methods of payment. Both will allow different businesses to accept credit card payments using their systems. Neither of the two issue credit cards on their own behalf, instead they rely on banks throughout the world to issue the credit cards for them, provide the credit, and then charge the interest. Your credit card bill goes to the bank, as Visa or MasterCard doesn’t see any of it.

AMEX, on the other hand, is very different. American Express has their own payment system, and they also issue their credit cards directly to consumers. Unlike Visa and MasterCard, AMEX runs the entire show. Therefore, when a credit card says American Express on it, you instantly know who has issued the card, what payment system it has, and everything else you would need to know.

Even though MasterCard and Visa are used more throughout the world, American Express is always expanding their networks. Visa and MasterCard are used in over twenty five million locations over the world, including third world countries, which makes them global credit card payments. AMEX on the other hand, doesn’t quite reach this degree. It is a great credit card, although it isn’t used around the world in areas where the other 2 dominant credit cards are.

You can get AMEX credit cards with rewards, although you’ll need to be careful where you look and what you select. Normally, with Visa and MasterCard, you’ll have to look at hundreds of banks before you can find the best choice. With AMEX, you can look at their website and find out what they offer and what type of APR you’ll have to pay. Most of the time, you can find a credit card with low interest and a great spending limit - providing you have good credit.

AMEX also has several advantages that it offers customers in North America and Europe. The credit card is accepted widely in both areas, offering you credit cards with great features and very attractive looks. AMEX offers you great rates, good rewards, and excellent customer service as well.

American Express also offers you Blue, which is a newly introduced credit card that offers you increased security, no annual fee, and 0% APR for the first year or so. Depending on your credit, you may be able to get an extended period with no interest. After that time has expired, you pay low fees, which make it a great credit card for anyone looking for a deal. Blue is the newest card from AMEX, and will rapidly become one of the best due to its amazing features.

In the world of credit cards, American Express is one of the best. They offer you a variety of different credit cards, designed to meet just about everyone’s needs. You find them online or through a local provider, although online is the preferred way to go. Simply fill out your application, and if you have good credit, you’ll be approved. Before you know it, you’ll have a credit card from AMEX and be ready to experience life in the fast lane.

What Do You Need To Know to Apply for a Credit Card?

All credit cards are not the same. You need to find one that matches you and your spending habits.

Since finances, especially money is one of the major concerns of many people, a wide array of financial management services and financial options emerged. One of the most visible among the unending line of financial management services there are is the credit card.

When people apply for a credit card, there is always a reason. It can be for managing their finances, needing extra money or in preparation to a big expenditure. But, no matter what the reason is, people apply for a credit card because of the ultimate convenience it brings.

By now, you may have had your share of ‘pre-approved’ credit card offers in your virtual and physical mail. Since people are quite vulnerable when they apply for a credit card, some credit card issuers lure these people by giving low introductory APR, no annual fee offers among numerous perks. The tendency of this so many alternatives and “value” deals is to sway the person who wants to apply for a credit card.

There are undeniably endless lists of pros and cons when you apply for a credit card, but if you really have decided to apply for a credit card, these are some of the helpful tips that can guide you on your credit card shopping journey.

Actually, there are three easy steps you should follow if you have decided to apply for a credit card. First, surf the net and do some research on credit cards. By doing this, you can familiarize yourself with different credit card terms and types. Second, you can compare numerous credit cards that would best serve your needs and lastly, you may now apply for the credit card of your choice by filling out a credit card application by visiting a bank representative or through online.

In order to find the right credit card fast and easy, first, before you apply for a credit card, make sure you mastered the credit card terms. When you apply for a credit card you must know what a “credit card” really is. Being a form of borrowing that involves charges, credit cards usually have underlying credit terms and conditions affect your overall cost.

So, it’s best to compare terms and fees before you apply for a credit card and agree to open an account. Some of the important terms to be understood well include the annual percentage rate or the APR.

When you apply for a credit card, you must know how the APR affects your credit account. Being a measure of the cost of credit expressed as a yearly rate, the APR should be disclosed before you apply for a credit card so that you would not be obligated on the account and on your account statements later on. Aside from APR, the periodic rate must be disclosed to the card holder before they completely apply for a credit card so they would have an idea of their outstanding balance and finance charge for each billing period.

Other important terms to know before you apply for a credit card are free period or “grace period,” annual fees, transaction fees and other charges, other costs and feature, and balance computation method for the finance charge like average daily balance, adjusted balance, previous balance, and two-cycle balances.

If you’re not that type of person who is patient enough to research on all these terms, make sure that before you apply for a credit card, the issuer will give an explanation how the balance is computed and it must appear on your monthly billing statements.

Self Help May Be Best When It Comes To Credit Repair

Should you seek assistance from a credit card repair company or attempt to fix your credit yourself?

You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:

“Credit problems? No problem!”

“We can erase your bad credit — 100% guaranteed.”

“Create a new credit identity — legally.”

“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.

This article explains how you can improve your creditworthiness and gives legitimate resources for low or no-cost help.

The Scam

Everyday, there are companies nationwide that appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.

The Warning Signs

If you decide to respond to a credit repair offer, look for these tell-tale signs of a scam:

companies that want you to pay for credit repair services before they provide any services.

companies that do not tell you your legal rights and what you can do for yourself for free.

companies that recommend that you not contact a credit reporting company directly.

Don’t Despair With Credit Repair

Having credit card debt may seem like the end of the world, but, there are steps you can take to repair your poor credit.

Just because you have a poor credit report doesn’t mean you won’t be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.

If you’re not disciplined enough to create a workable budget and stick to it, work out a repayment plan with your creditors, or keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable. For example, just because an organization says it’s a “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

If you are considering filing for bankruptcy, you should know about one major change to the bankruptcy laws: As of October 17, 2005, you must get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting.

Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

Consolidating your debt, paying your bills on time, cutting on the frivolous expenses, and preparing a budget for your discretionary income will help you overcome the mountain of credit card debt.

It may look bleak – even impossible – but if you stick to your plan, you will be able to dig yourself out of this hole.

Get On The Road to Financial Recovery (Part II)

Learn how others can help you help yourself on the road back to financial recovery.

What Others Can Do for You

Credit Counseling. If you are unable to make satisfactory arrangements with your creditors, there are organizations that can help. An organization that you can call is a Consumer Credit Counseling Service (CCCS) agency. These local, non-profit organizations affiliated with the National Foundation for Consumer Credit (NFCC) provide education and counseling to families and individuals.

For consumers who want individual help, CCCS counselors with professional backgrounds in money management and counseling can provide support. To promote high standards, the NFCC has developed a certification program for these counselors. A counselor will work with you to develop a budget to maintain your basic living expenses and outline options for addressing your total financial situation. If creditors are pressing you, a CCCS counselor can also negotiate with these creditors to repay your debts through a financial management plan. Under this plan, creditors often agree to reduce payments, lower or drop interest and finance charges, and waive late fees and over-the-limit fees.

According to the NFCC, about 35% of those counseled are able to help themselves after budget counseling sessions; 30% require a debt repayment program, 7% are referred to legal assistance, and 28% are referred to other resources (e.g., programs for treating compulsive behavior such as alcohol, drug or gambling problems) or decide not to participate at that time. About 65% to 70% of the individuals who start the debt repayment plan complete it successfully.

After starting the debt repayment plan, you will deposit money with CCCS each month to cover these new negotiated payment amounts. Then CCCS will distribute this money to your creditors to repay your debts. With more than 1,100 locations nationwide, CCCS agencies are available to nearly all consumers. Supported mainly by contributions from community organizations, financial institutions, and merchants, CCCS provides services free or at a low cost to individuals seeking help.

Personal Bankruptcy. Bankruptcy is a legal procedure which can give people who cannot pay their bills a fresh start. A decision to file for bankruptcy is a serious step. You should make it only if it is the best way to deal with financial problems.

There are two types of bankruptcy available to most individuals. Chapter 13 or "reorganization" allows debtors to keep property which they might otherwise lose, such as a mortgaged house or car. Reorganizations may allow debtors to pay off or cure a default over a period of three to five years, rather than surrender property.

Chapter 7 or "straight bankruptcy" involves liquidation of all assets that are not exempt in your state. The exempt property may include items such as work-related tools and basic household furnishings, among others. Some of your property may be sold by a court-appointed official or turned over to your creditors. You can file for Chapter 7 only once every six years.

Both types of bankruptcy may get rid of unsecured debts (those where creditors have no rights to specific property), and stop foreclosures, repossessions, garnishments, utility shutoffs, and debt collection activities. Both types also provide exemptions that permit most individual debtors to keep most of their assets, though these "exemption" amounts vary greatly from state to state.

Bankruptcy cannot clean up a bad credit record and will be part of this record for up to ten years. It can, for example, make it more difficult to get a mortgage to buy a house. It usually does not wipe out child support, alimony, fines, taxes, and some student loan obligations. Also, unless under Chapter 13 you have an acceptable plan to catch up on your debt, bankruptcy usually does not permit you to keep property when the creditor has an unpaid mortgage or lien on it.

Bankruptcy cases must be filed in federal court. The filing fee is $160, which sometimes may be paid in installments. This fee does not include the fees of your bankruptcy lawyer.

Choosing a bankruptcy lawyer may be difficult. Some of the least reputable lawyers make easy money by handling hundreds of bankruptcy cases without adequately considering individual needs. Recommendations from those you know and trust, and from employee assistance programs, are most useful.

Some publicly funded legal services programs handle bankruptcy cases without charging attorney fees. Or these programs may provide referrals to private bankruptcy lawyers. Keep in mind that the fees of these attorneys may vary widely.

Possible Pitfalls

You may encounter credit counselors who aren't helpful. For-profit or non-credentialed counseling organizations often make promises that they cannot or do not keep. Be especially careful when asked for a large sum of money in advance. To check the organization's reputation, contact your state Attorney General, consumer protection agency, or Better Business Bureau.

"Credit repair" clinics and "credit doctors" have been frequently criticized for promising that they can remove negative information from your credit report. Accurate information cannot be changed. If information is old or inaccurate, you can contact a credit bureau yourself and ask that it be removed.

Risky refinancing options. When already in financial trouble, second mortgages greatly increase the risk that you may lose your home. Be wary of any loan consolidations or other refinancing that actually increase interest owed or require payments of points or large fees.

A Final Word: Don't lose hope, even if you despair of ever recovering financially. You can regain financial health if you act. Pursuing the options presented in this article can put you on the road to financial recovery.

Credit Card Debt And Security Risks

An individual who is financially overextended is at risk of engaging in illegal acts to generate funds.

Credit card debt can push people over the edge and cause them to do things they wouldn’t normally do. They don’t see any light at the end of the tunnel and resort to desperate means to try to fix their credit problem.

Amount of debt determines, in part, how stressed and desperate a person is as a result of financial problems. However, what caused the debts and how one deals with these financial obligations tells more than amount of debt about a person’s reliability, trustworthiness, and judgment.

If a person is not at fault for the financial problems and is dealing with them in a reasonable manner, security concern is substantially alleviated. On the other hand, debts caused by irresponsible or impulsive behavior or by gambling, alcohol abuse or drug abuse are a serious concern. A person who is irresponsible in fulfilling financial obligations may be irresponsible in fulfilling other obligations, such as following the rules for protecting classified information.

Financial stress is common among a large segment of the population. Many immature young persons go through a period of difficulty adjusting to the temptations of easy credit. Most people with financial difficulties do not view crime as an appropriate means of solving their problems, but the few who do are a serious concern. Of recent spies who betrayed their country for money, about half were motivated by some real or perceived urgent financial need, and about half by personal greed. Greedy individuals often have a compulsive need for money or goods as a measure of success or as a source of self-esteem, influence, power, or control.

Financial problems can cause people to resort to the extreme. This has happened numerous times in the military and government. An individual gets into debt and resorts to stealing military or trade secrets and sells them to other governments for fast cash. Most don't receive enough to pay their bills, continue to provide the information, and eventually get caught and imprisoned.

If you have reached what you think is the end of your rope, don’t take such drastic actions. There are ways to get out of debt and it starts with getting organized, creating and sticking to a budget, and chipping away at the debt little by little.

Your financial problems will not be resolved over night. But, with persistence, you can get out trouble.

If You Really Must Borrow

Before you borrow, compare! Find the best deal available to you.
Pay close attention to the Annual Percentage Rate (APR). The APR is extremely useful as a comparison tool.

Always try to beat 13% APR. Usually you can beat it by a lot (if you keep your credit good)!

Each state has different laws about interest rate ceilings. Check your state to see what the maximum interest is that can be charged.

“Easy loans” are available with outrageous costs. Avoid them like the plague!

If you aren’t in the habit of paying off your credit cards each month, get in the habit!

When you do pay off your cards each month, you pay no interest (most credit cards). If you're accustomed to the dangerous reasoning: “I still have unused limit”, get over it! Use the wise reasoning: "I don't charge things with my credit card unless I have the money lined up."

Watch out for exceptionally “low” or “no interest” offers. Pay close attention to the “fine-print” terms and costs. Beware: artificially low rates are often offset by increases in other costs.

Beware of advertisers' claims:
a. “Cash out your equity” also means: Get deeper in debt, risk losing your home.

b. “Put your equity to work” also means: Get deeper in debt, risk losing your home.

c. “Pay off high-rate credit cards” can mean: Lose your equity and jeopardize you home because you goofed up and ran up credit card debt.

d. “Unlock your home equity with our credit card” means: Get deeper in debt & risk losing your home with an incredibly easy way to spend money.

e. “Refinance and save” usually means: lose equity and pay us more interest.

Pay early or on time to avoid late fees. Late fees can change a loan with a reasonable rate to one of an outrageous effective rate! Consider yourself late if you aren’t early.

To avoid bad credit, always make your payments before they are due. Bad credit is not only expensive because of late fees, but it is also expensive because of increased cost of future debt.

If you’ve already been financially smashed, hang on until you can bounce back, or get help.

Before applying for a loan (especially a mortgage loan), compare, compare, compare! Fees, rates, prepayment penalties, and terms. One hour of phone calls may save you thousands of dollars.

When signing documents, understand what and why you are signing. Don’t sign it if you don’t agree to it. Take your time. If someone tries to rush you through signing documents tell that person to slow down or “take a hike.” Plan on taking at least an hour to wade through a mortgage loan closing.

If consolidating, expect delays, and keep all other obligations current. It is much easier to get a refund of an overpayment than to suffer from increased charges resulting from delinquency.

Refinancing a mortgage loan can be great:

a. If the interest rate of the new loan is significantly less than the old one.

If the total of payments of the new loan is significantly lower than the old one.

Refinancing a mortgage loan can be a disaster:

If your equity gets eaten up by fees.
If you run up new debt because your consolidated payment is lower.
If you jeopardize your home by adding credit card debt to your home loan.
(Some lenders love to put your equity into their pockets thru fees, interest, and prepayment penalties).

Don’t fall for scams. Popular scams include: Lotteries you’ve never entered. Phony cashier’s checks to pay you. Tricks to get your account numbers or SS# and using your identity. Investment scams, especially pernicious when they involve you mortgaging your home to invest. Letting someone else use your good credit rating to buy homes, etc.

Don’t sign false statements, even simple ones like stating you intend to live in a home you don’t intend to live in.

Accurate Negative Information And Controlling Your Debt

Checking your credit report for inaccurate information is essential. Your credit score depends on it.

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you've applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

Your credit file may not reflect all your credit accounts. Most national department store and all-purpose bank credit card accounts are included in your file, but not all. Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those that usually aren't included.

If you've been told that you were denied credit because of an "insufficient credit file" or "no credit file" and you have accounts with creditors that don't appear in your credit file, ask the consumer reporting companies to add this information to future reports. Although they are not required to do so, many consumer reporting companies will add verifiable accounts for a fee. However, if these creditors do not generally report to the consumer reporting company, the added items will not be updated in your file.

Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?

You're not alone. Many people face financial crises at some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or simple overspending, it can seem overwhelming. But often, it can be overcome. The fact is that your financial situation doesn't have to go from bad to worse.

If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.

The first step toward taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend. Start by listing your income from all sources. Then, list your "fixed" expenses — those that are the same each month — like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary — like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.

Your public library and bookstores have information about budgeting and money management techniques. In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your checkbook, and creating plans to save money and pay down your debt.

Contact your creditors immediately if you're having trouble making ends meet. Tell them why it's difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don't wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.

The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you're at work if the collector knows that your employer doesn't approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.
Credit Counseling

If you're not disciplined enough to create a workable budget and stick to it, can't work out a repayment plan with your creditors, or can't keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But be aware that just because an organization says it's "nonprofit," there's no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, or pressure consumers to make large "voluntary" contributions that can cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

What Are Advance Fee Loan Scams?

If you have poor or no credit, you may be a target of advance fee loan scam artists.
These scams often target consumers with bad credit problems or those with no credit. In exchange for an up-front fee, these companies "guarantee" that applicants will get the credit they want — usually a credit card or a personal loan.

The up-front fee may be as high as several hundred dollars. Resist the temptation to follow up on advance-fee loan guarantees. They may be illegal. Many legitimate creditors offer extensions of credit, such as credit cards, loans, and mortgages through telemarketing, and require an application fee or appraisal fee in advance. But legitimate creditors never guarantee in advance that you'll get the loan. Under the federal Telemarketing Sales Rule, a seller or telemarketer who guarantees or represents a high likelihood of your getting a loan or some other extension of credit may not ask for or receive payment until you've received the loan.

Recognizing an advance fee loan scam

Ads for advance-fee loans often appear in the classified ad section of local and national newspapers and magazines. They also may appear in mailings, radio spots, and on local cable stations. Often, these ads feature "900" numbers, which result in charges on your phone bill. In addition, these companies often use delivery systems other than the U.S. Postal Service, such as overnight or courier services, to avoid detection and prosecution by postal authorities.

It's not hard to confuse a legitimate credit offer with an advance-fee loan scam. An offer for credit from a bank, savings and loan, or mortgage broker generally requires your verbal or written acceptance of the loan or credit offer. The offer usually is subject to a check of your credit report after you apply to make sure you meet their credit standards. Usually, you are not required to pay a fee to get the credit.

Hang up on anyone who calls you on the phone and says they can guarantee you will get a loan if you pay in advance. It's against the law.
Protecting Yourself

Here are some tips to keep in mind before you respond to ads that promise easy credit, regardless of your credit history:

* Most legitimate lenders will not "guarantee" that you will get a loan or a credit card before you apply, especially if you have bad credit, or a bankruptcy.
* It is an accepted and common practice for reputable lenders to require payment for a credit report or appraisal. You also may have to pay a processing or application fee.
* Never give your credit card account number, bank account information, or Social Security number out over the telephone unless you are familiar with the company and know why the information is necessary.