Walk With Money » Credit Score

Reader Mailbag: Secret Santa

Robert Wilkinson — Thu, 18 Nov 2010 18:20:03 +0000

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Basic credit questions
2. How to make money blogging?
3. Favorite podcasts
4. Television compromise
5. Connecting with teens cheaply
6. Overly long “to-do” list
7. Maximizing credit card promos
8. Refinance or not?
9. Quibids?
10. Plant-based snacks

This year, I’ve found myself in two different Secret Santa exchanges.

When I was younger, I used to worry way too much about what I was receiving. I didn’t want to participate in such exchanges because I didn’t want to receive something awful while putting effort into giving something nice.

Now, I barely care what I receive. It’s all about making sure the recipient gets something worthwhile and enjoyable that puts a smile on their face.

Oh, how perspectives change.

Q1: Basic credit questions
I’m a 23 year old University student. I’ve had a credit card since I was 18 (which I just recently – and finally – paid off), and I have a student line of credit with at $12000+ balance. Furthermore, two years ago I took out a loan from my credit union to buy a car which is also paid off. My question is, how do I know what my credit score is and if it’s good or bad? Also, what’s the best way to actually build a good credit score? I was always told I could but something with my credit card (perhaps a CD or something, nothing more than $50), then pay it off right away rather than make minimum payments which just costs more interest. Is this true?
- Tyler

You can’t know your exact credit score without buying it from one of the credit agencies. They all offer programs where you can pay them some small fee to peek at your calculated credit score.

Of course, your credit score is based on your credit report, which you can view for free at annualcreditreport – it’s a site run by the Federal Trade Commission to allow people to view their credit report annually for no cost. Although you don’t get to see your actual credit score, you will be able to verify if there are any incorrect reports on your credit history and see what positive reports are there.

You can also use a number of credit score estimators, like the one at MyFICO, to use the information on your report to get a rough estimate of your credit score. From what I’ve seen, such estimates are usually accurate to within ten points or so.

As for improving your credit, you’re right in that making small purchases and paying them off is the best way to build credit because it demonstrates a positive payment history. I would suggest that you use the card to handle some routine purchase, like gas or groceries, then pay the bill in full as soon as it arrives.

Q2: How to make money blogging?
I have been wanting to find out exactly HOW to accumulate a few dollars of income through click-ads. You had mentioned in your Simple Dollar Rule #11 that we should all try to generate a few dollars from our blog. I know that without an appropriate amount of traffic, one may not generate enough each month to fill a pocket. But that’s not really my concern right now. I just want to know the ‘how-to” so I may feel more motivated about my (not-so-skillful) writings. You see, I love to write and I love to snap (photos). My dream is to one day quit my corporate cell, I mean, cube, and to be able to hold down a lower-paying job closer to home so that I can finally spend more time to write, photograph and jog, my three biggest passions.
- Rachel

Blogging is certainly one way to earn some pocket money, but there are many ways to do that. Earning money from a blog is very interesting because at first, you don’t earn much of anything at all, which weeds out people who won’t stick with it.

You earn money in the long run by having an archive of good posts that others have linked to. As a result, these older posts show up in Google searches, bringing people to your site. The more good older posts you have, the more people you’ll bring to your site without any additional effort.

What you need to do is to ask yourself if you’re writing anything anyone would care about. Can you envision a reasonable scenario where someone would Google a term, find your page, and be pleased with what they find, enough to stick around and read more? If you’re not writing that kind of stuff – either useful or entertaining or, ideally, both – then you’re going to have a very hard time succeeding at blogging.

Once you’ve done this, though, then earning money is fairly easy – just put some ads on the site and be patient.

The key is content. If it’s good stuff, all you have to do is get the word out a little bit (join some blog carnivals associated with your topic, for one) and then put some ads on your site. Then wait (and keep making good content, of course).

Q3: Favorite podcasts
As a fellow avid podcast listener, I’m always interested to hear what podcasts people regularly listen to. What are your favorites?
- Matt

Aside from a few NPR shows that I listen to in podcast form because it’s more convenient (Planet Money, Fresh Air, Wait Wait, Don’t Tell Me, etc.), I listen to these podcasts regularly.

Radiolab, which is a science podcast that’s probably one of the best things on the internet
Pardon the Interruption, a sports podcast that keeps me at least up to date on the “watercooler” talk in the sports world
This American Life, a collection of audio essays on a seemingly infinite array of topics
The B.S. Report, a podcast ostensibly about sports but tends to branch out into all sorts of topics
The Dice Tower, which focuses on board and card games
Grammar Girl, which is a very short entertaining podcast on grammar issues

There are a lot of great podcasts up there. This batch is pretty much all I can keep up with during a given week, since I usually listen to them in the background and play them twice or three times each so I can absorb more of them as I’m working.

Q4: Television compromise
My wife and I have strongly ...

The Debate Between Debit Cards and Credit Cards

Robert Wilkinson — Tue, 09 Nov 2010 12:20:04 +0000

More than half of all card transactions are now being paid with debit cards rather than credit cards, according to the Nilson Report. The debate between debit cards and credit cards continues on. Many people made the switch to debit cards in an effort to avoid racking up too much debt and to help manage their budget more efficiently. The problem with this theory is the costly expense of overdraft fees if you mistakenly overdraw your account – and the fact that you lose out on many benefits by not using credit cards.

Photo by Classyshot via Flickr

Despite the reinvention of the credit card industry and the recent legislation changes during a troubling economic period, there are still many benefits to using credit cards over debit cards which you may have overlooked, including:

Build credit - People who only ever use debit cards or cash to pay for their purchases are going to have a lower credit score than people who use and pay for credit card purchases in a responsible manner. A credit score is calculated based on a number of factors, including the types of credit you use, how much credit you have available, and the average age of credit accounts.

Buy now, pay later - If your paycheck doesn’t always come in at the same time as your bills, you can benefit from paying all of your monthly expenses on a credit card and then paying it off at the end of each month. Just keep track of what you’re spending or paying for with the card, and make sure you have enough money set aside to pay it when the bill comes in. This is a much better alternative to payday loans and debit card overdrafts.

Avoid usurious fees – It’s somewhat counter intuitive, given their reputation, but credit card fees are 100% avoidable. Meanwhile, many of the prepaid ...

Are Credit Monitoring And Identity Theft Protection Worth The Cost?

Robert Wilkinson — Fri, 15 Oct 2010 11:20:02 +0000

When you open a credit card account there are a variety of new concerns presented. How are you going to protect that precious piece of plastic from theft along with your identity? How can you monitor the effect this card has on your credit? Lucky for you, credit card companies have it all covered.

Obtaining a credit card is never as simple as sending in an application and getting the card in the mail. You will be presented with a host of additional offers and it’s up to you whether you want to pay the extra monthly cost for them. So should you? How can you determine if these extra services are valuable or just another way for credit card companies to make money?

Photo by Don Hankins via Flickr

Identity Theft Insurance

Identity theft occurs when someone uses your name fraudulently to gain access to sensitive information and ultimately, your money. According to Gartner research firm, approximately 15 million Americans are victims of identity theft every year. If you’ve ever experienced identity theft, you know the pain of being left with hundreds or thousands in fraudulent charges to handle, not to mention the damage to your credit and financial reputation.

That’s why a lot of credit card companies offer insurance for this scenario. As an example, Discover provides such insurance along with their Identity Theft Protection package. They’ll provide you with up to $25,000 to cover fraudulent charges, legal costs or lost wages associated with restoring your credit. The actual insurance comes from Virginia Surety Company, Inc. and the total cost is about $13 a month.

Credit Monitoring

Credit monitoring can help you accomplish a few things: Check for fraudulent activity, catch errors on your credit report and keep track of your credit score. This service is often offered by card issuing banks, as well as credit reporting ...

Related Searches:
is credit monitoring worth the cost

Free Credit Score: How To Get FICO and Other Credit Scores

Robert Wilkinson — Tue, 12 Oct 2010 08:20:02 +0000

The Fair Credit Reporting Act legislation enabled you to obtain one free copy of your credit report from each of the three major reporting agencies (TransUnion, Equifax, and Experian) annually; however, getting your credit score takes a bit more work. For a small fee, you could get your credit scores along with your free credit reports from AnnualCreditReport.com. However, there are other ways, including free ways, to get your 3 credit scores. To find out how, keep reading!

Free FICO Score

First, let’s focus on FICO score since it’s the hardest one to get. To get your score, you can sign up for one of the credit monitoring trials below. Once you obtain your scores, you can check out the service at your leisure. If you cancel the trial before it expires, you will not be obligated to pay. The following is a list of web sites that offer either free 3-bureau credit scores or free FICO score (updated 10/11/2010).

Web site Cost Credit Score Type

MyFICO Free with a 10-day Score Watch^® trail; $12.95 per month thereafter FICO^® score

IDENTITY GUARD^® Free with a 30-day EXTRA CAUTION^® Premium Credit Monitoring trial; $14.95 per month thereafter 3 credit scores^[1]

GoFreeCredit.com Free with a 7-day Credit Score Complete credit monitoring trial, $29.95 per month thereafter 3 credit scores

CreditReport.com Free with a 7-day 3-bureau credit monitoring trial; $14.95 per month thereafter 3 credit scores

If you do not want to sign up for a free trial, you can request credit scores through AnnualCreditReport.com for a nominal fee of less than $10 per score.

Free Equifax, TransUnion, and Experian Scores

In addition to FICO credit score, you can also obtain credit score from Equifax, TransUnion, and Experian — the three major credit reporting agencies.

Equifax Score

Through Equifax 3-in-1 Monitoring with Credit Score 30-day free credit monitoring trial offer, you can access Equifax score, tips for managing your score, 3 bureau monitoring and alerts, and up to $1 million identity theft insurance.

TransUnion Score

You can ...

Credit Card Offers Return To Those Who Are Qualified

Robert Wilkinson — Sat, 09 Oct 2010 06:20:09 +0000

Over the past few years we have witnessed a complete one-eighty in the way both credit card companies operate and the way consumers are using credit cards. Prior to the recession, credit card companies were practically giving away credit to anyone and everyone regardless of their ability to repay the debt. Consumers armed with easily obtained and in some cases excessive amounts of credit often made mistakes in the managing of that credit.

Photo by Gothem City via Flickr

When the recession hit, several things happened. Consumers began to fall behind on credit card payments or found themselves unable to pay them at all. New rules and regulations were put in place which require credit card companies to level the playing field with those who use their credit cards. High default rates and a new landscape in the industry resulted in many credit card companies pulling back on the credit card offers that were so easily obtained just a few years ago.

There are some signs that the economy is slowly starting to recover and with this recovery, credit card companies are once again sending out offers. This time around however, credit card companies are being a bit more picky about who gets offers and the terms that come with new accounts. Depending on your credit, you may have a mailbox full of offers or nary a one. Here we look at how your credit score will determine the type of offers you receive and the terms connected with each.

Bad Credit

The reality for millions of consumers hard hit by the recession is bad credit. If you fall in this category, specifically those with credit scores of 600 or below, expect credit card offers to be limited. For those accounts for which you do qualify, expect variable rates and an APR ranging from 19.9 percent to 29.9 percent. Annual fees have also returned and for those with poor credit, it could cost anywhere from $35 to $120 for the privilege of having the account. Lenders have always viewed those with bad credit as a higher risk, however in light of recent changes in the industry, credit card offers to those with poor credit are going to remain less than before the recession.

Average ...

National Money Night Talk: Money Tips for Teen Giveaway

Robert Wilkinson — Wed, 25 Aug 2010 11:20:04 +0000

Families around the country are encouraged to sit down and talk about money and financial responsibility on September 16, 2010 in honor of National Money Night Talk. In a joint effort by American Express and Jean Chatzky, parents can visit www.moneynighttalk.com to make a pledge and get prepared to have “the money talk” with their kids by accessing exclusive Jean Chatzky videos, FAQs, talking points and resources endorsed by the Council for Economic Education.

This free online resource is available in three different tracks based on age:

middle school,

high school, and

college

So parents with young adults ready to head off to school can go online now to start and sustain the money dialogue.

Nearly nine in ten parents (88%) and 79 percent of kids are already discussing financial responsibility with one another, yet nearly 40 percent of parents wish there were tools to help monitor their kid’s spending.

American Express has several options for parents looking to stay in control of family spending, while still extending financial empowerment to their teens and young adults.

American Express Cardmembers can add an Additional Card with Custom Limits^SM to their account to manage and track a spending limit created for their teen (age 15+). Parents can easily go online and adjust the limit for their child’s card at any time, and for those 18 and up, the Additional Card positively impacts the teen’s credit score.

PASS from American Express ...

Summer Promotions And Personal Finance Reading List

Robert Wilkinson — Sat, 14 Aug 2010 01:20:02 +0000

Over the past few weeks there has been some good promotions in the personal finance space that I would like to gather in one place for your convenience. If you’re thinking about trying out one or more of these services, this is a good time to give it a go. Here are some of the notable promotions:

Investing

Lending Club — Get $25 when you sign up as an investor on Lending Club.

TradeKing — Get $50 when you open and account and make your first trade.

OptionsXpress — Get $100 when you open an account.

Savings

Everbank — Get up to $75 and 2.25% bonus rate for 3 months when you open Yield Pledge® Money Market and FreeNet® Checking accounts.

Credit Cards

Chase Freedom VISA — Get $100 cashback bonus when you make $799 in purchases in your first 3 months.

Discover® More(SM) Card — Get $50 cashback bonus when you make $500 in purchases in your first 3 months.

TrueEarnings® Card from Costco and American Express — Get $25 statement credit for the first purchase made with the card.

Credit Score

IDENTITY GUARD^® — Get 3 credit scores with 30-day free EXTRA CAUTION^® Premium Credit Monitoring trial.

I am not sure when these offers expire so get them while they last. And like anything else that you plan to sign up for, make sure you read the fine print carefully

Personal Finance Reading List

Beyond Your Credit Score: What Three Digits Says About You from Credit Karma — A nice infographic to help you better understand your credit score.

Ahhhhh I did something so freakin’ stupid! from Budgets Are Sexy — Even a smart person can make stupid mistakes…in this case, 3 times.

Are You Aware of the Most Common Credit Threats?

Robert Wilkinson — Tue, 27 Jul 2010 08:20:07 +0000

The Associated Press reports a new finding by FICO, Inc. that 25.5 percent of consumers, or nearly 43.4 million people, currently have a credit score of 599 or less. With a quarter of the nation suffering from credit card debt and poor credit scores, it’s obvious that many are not aware of the number of factors that can lower their credit scores.

Photo by The Truth About via Flickr

You can probably list several things you know can contribute to decreasing your credit score, but it’s unlikely you can name them all. In fact, a list of different things that impact your credit score negatively has been compiled by CreditReport.com, and among them are late or missed payments, bankruptcy and periods of unemployment.

Did you know that these common occurrences harm your credit? Here’s a closer look at how these situations are a threat to your credit.

Missed or Late Payments

You may be willing to pay that late fee every now and then if it lets you skip another bill for a few extra days. For some people, $20 or $30 isn’t a big deal. Plus, the Fed is making it even easier to rationalize paying a late fee by approving new credit card restrictions, including a late fee cap of $25.

So why not pay bills late and fork over the extra fee when budgeting gets a bit messy at the end of the month? Go ahead if you don’t care about your credit score.

If you do care, you need to pay every bill on time. Linda Stern of CBS Money Watch details some of the additional regulations that go into effect on August 22, 2010 as part of the CARD Act, but advises that you still need to protect your credit even if the new laws make it easier to skip payments. Stern writes, “Even with new limits on late fees…Late payments will hurt your credit score and that, in turn, will cost you more on everything you borrow.”

Bankruptcy

Filing for bankruptcy is a huge decision that will have a lasting effect on your credit. As Consumer Credit Couseling Services (CCCS) explains, “Credit that you are able to obtain may be from sub-prime lenders that carry very high interest ...

6 Things to Negotiate When Buying a House

Robert Wilkinson — Tue, 27 Apr 2010 22:20:03 +0000

Even though there are some scattered signs that the housing market is picking up, in most areas, it is still very much a buyer’s market. That means that you have some pull when it comes to buying a house. So, if you have low credit card debt, a good credit score, a decent down payment, and a stable job, now is a good time to go house hunting. You’ll get a better interest rate, and you will be able to negotiate with the seller to help you save a little more money.

Photo by MichiganMoves via Flickr

Here are 6 things you can negotiate when buying a house:

Repairs

Every home has to have an inspection. In most cases, major problems that makes the home less habitable have to be repaired by the seller, including heating, air conditioning, wiring, plumbing and structural issues. The exception is when the seller is offering the house “as is.” Even so, you can still negotiate for repairs. Once the home inspection points out the necessary changes that need to be made, negotiate repairs, or negotiate an allowance for repairs.

Paint and flooring allowances

If the flooring looks bad, and the paint is chipped and peeling, you can negotiate allowances for these items. Many sellers will knock off a few thousand dollars (usually between $3,000 and $10,000, depending on the degree of damage) to allow for the fact that you will need to re-paint or re-floor. You might also be able to negotiate that the seller arranges for and pays for paint and flooring before you move in, rather than just providing an allowance.

Finished basement or remodeling

When my husband and I bought our house while it was under construction, it was originally supposed to come with an unfinished basement. We negotiated to have the basement finished with the same materials as used for the upstairs. (We also negotiated to have the air conditioning installed.) Now, we have a finished downstairs, professionally built, rather than having done it ourselves. You can negotiate allowances for finishing the basement or remodeling a portion of the home that just isn’t very attractive. In some cases, you ...

Related Searches:
things to negotiate when buying a house
buying a house allowances
get air conditioning allowance when buying a house
how to get an allowance in buying a house
things to negotiate from home inspection

Why Was My Credit Limit Lowered?

Robert Wilkinson — Sun, 07 Mar 2010 17:20:27 +0000

Jennifer writes in:

Yesterday, I received a notice from [my credit card company] that my credit limit had been lowered from $10,000 to $4,000 on my primary credit card. I was immediately worried that my credit had been damaged by identity theft, so I checked it on annualcreditreport.com and there was nothing there at all. I’ve always paid all of my bills on time and my life has been pretty much normal and unchanged for a long time. Why would they make this change? I’m not concerned about reaching my credit limit, but that reduction in my limit does alter my debt-to-credit ratio, which could negatively impact my credit rating.

Jennifer describes a pretty typical scenario today. A credit card company sends a letter out of nowhere, for no obvious reason, announcing a significant drop in one’s credit limit.

One big effect that such a drop has is that it alters your debt-to-credit ratio, as Jennifer mentions. Simply put, your debt-to-credit ratio tells what percentage of your credit limit across all of your credit cards you’re actually using. So, let’s say Jennifer had a $3,000 balance on her $10,000 card – that’s a 30% debt-to-credit ratio. When the company drops her credit limit, she then had a $3,000 balance on a $4,000 card – that’s a 75% debt-to-credit ratio. The higher your debt-to-credit ratio, the more negative impact it has on your credit score.

This type of behavior seems alien, particularly after a decade where credit card issuers would commonly raise credit limits without you even asking. What gives?

The reality of the credit card industry has changed. For one, the econmic downturn has seen a large spike in the number of people who have simply defaulted on their credit card bills, not bothering to pay them. For another, the Credit Cardholders’ Bill of Right Act recently became the law of the land, restricting some of the business practices of the credit card companies.

Credit limits are not a right. Another issue is that many people, particularly after the last decade of rampant growth in credit limits, view their limits as something of a right and when credit card companies reduce those limits, their rights are somehow being infringed. In truth, ...

Web site	Cost	Credit Score Type
MyFICO	Free with a 10-day Score Watch^® trail; $12.95 per month thereafter	FICO^® score
IDENTITY GUARD^®	Free with a 30-day EXTRA CAUTION^® Premium Credit Monitoring trial; $14.95 per month thereafter	3 credit scores^[1]
GoFreeCredit.com	Free with a 7-day Credit Score Complete credit monitoring trial, $29.95 per month thereafter	3 credit scores
CreditReport.com	Free with a 7-day 3-bureau credit monitoring trial; $14.95 per month thereafter	3 credit scores