Credit

- Interest Rate and Payments -

- Credit - If you build up a reputation for paying bills and debts on time, you'll be better able to borrow money in the future. Your credit is one if the most important aspects of your personal finances. Credit is important because it enables you to borrow money when you need it. In addition, the better your creditworthiness, the more cheaply you'll be able to borrow money, whether for a car, education, home, or some other large expense. On the other hand, if you are not a good credit risk, you may not be able to borrow when you need to, or you might be able to borrow but only at a very high interest rate. Your creditworthiness may also be important when you are looking for certain types of insurance, and when you apply for certain types of jobs.

Credit is used primarily in order to obtain loans. Loans can be an excellent way to fund large purchases and business initiatives, but managing debt can be a complicated process. Let's face it: It can take just a few months to get into financial trouble and years to get out. Although debt is sometimes useful, there is a difference between good debt and bad debt. The two most important characteristics are how you borrow the money and what you do with it.
A mortgage is usually good debt, since you probably couldn't afford the house otherwise, the interest rate is relatively low, and the interest is usually tax-deductible ( Mortgages). Borrowing to pay for an education is usually good debt, because it's an investment in future earnings ( College Loans). Carrying a balance on your credit card at a high rate of interest is bad debt, especially if the money was used to buy luxury items or things you didn't really need. Even though debt is a part of life, the key to preventing it from becoming destructive is knowing its benefits and risks. The rest of this section will focus on credit and credit cards.

Credit Mistakes - Your credit report may have errors on it, and this can hurt your ability to borrow. That's why it's important to check your credit reports periodically and get errors resolved. Here we describe the best procedure to follow to make sure you're protected so that errors don't hurt you. We also list the contact information of the three large credit reporting agencies: Experian, Equifax, and Trans Union.

Improving Credit - Find out how to improve your credit (and why this is important). We describe techniques you can use, such as timely bill payment, closing unused credit lines, and avoiding collection agencies, judgments against you, and bankruptcy for seven to ten years.

Credit Cards - Learn how credit cards, despite the convenient and useful way to pay for products and services, also encourages excessive spending that lead to debt accumulation and high interest rates on the money owed. Understand why the use of credit cards is recommended only for those who intend to pay off the balance each month, and consider the types of credit cards carefully.

Credit

Credit
Credit Card
Credit Regulations
Credit Reports
Credit Repair

Credit Bureau How to Fix your Credit Report? Correct any errors and improve your credit score in Experian, Equifax and Trans Union.

How to Fix the Credit Report?: The following five steps can help you take better control of your credit report situation:

Get your credit report, determine and understand your credit rating.

Understand the risks of credit fraud and how to protect yourself.

Understand your rights.

Correct any errors.

Work toward improving your credit score.

Credit Mistakes - Credit Mistakes Many credit reports accumulate errors over time and some of these errors can be serious enough to lead to a denial of credit. For this reason it is important to fix any incorrect information as soon as you discover it.

Both the CRA and the information provider have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under this law, contact both the CRA and the information provider. In both cases, include copies of documents which support your position, and send your letter by certified mail return receipt requested, so you have proof that they received it.

First, tell the CRA in writing what information you believe is inaccurate.

Experian's National Consumer Assistance Center - P.O. Box 2002, Allen, TX 75013

Equifax Information Services - P.O. Box 740241, Atlanta, GA 30374-0241

Trans Union Corporation - P.O. Box 2000, Chester, PA 19022 This letter should include your full name, current mailing address and previous addresses for the last five years, your Social Security number, your date of birth, your spouse's name and Social Security number (if applicable), the name and account number of the creditor and item you're disputing, and your explanation of the error. CRAs must reinvestigate the items in question -- usually within 30 days -- unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate the matter, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so that they can correct this information in your file.

When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.

Second, tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct -- that is, if the information is inaccurate -- the information provider may not use it again.

If the CRA or information provider won't correct the information you dispute, ask the CRA to include your statement of the dispute in your file and in future reports. If you request, the CRA also will provide your statement to anyone who received a copy of the old report in the recent past. There usually is a fee for this service. If you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a CRA.

Although the Federal Trade Commission can't act as your lawyer in private disputes, they do investigate complaints to detect patterns. Send your questions or complaints to: Consumer Response Center, Federal Trade Commission, CRC-240, 600 Pennsylvania Ave NW, Washington, D.C. 20580. If push comes to shove, you may sue a CRA, a user or (in some cases) a provider of CRA data, in state or federal court for most violations of the FCRA. If you win, the defendant will have to pay damages and reimburse you for attorney fees to the extent ordered by the court.

How to budget for a first car?

How can you pay off your debts?

Credit Bureau