Since the discovery of what makes a credit score tick, there’s been a number of myths that just won’t die – or ones that have popped up since all the facts have been revealed. It’s important to know which ones of these are legit and which ones are just people talking.

Checking Your Own Credit Hurts Your Credit Scores

No, it does not. Checking your credit scores doesn’t exactly increase anything, but checking on them yourself definitely doesn’t decrease anything, either. Hard inquiries, like the ones that credit card companies and car salesman make, can deeply affect your credit if there are too many of them made over a period of months. Otherwise, your credit is safe, and you can monitor it eight times a day if you’d like.

You Have to Carry a Balance to Make Your Creditors Happy

No, you don’t. There is a myth going around that says to keep your creditors happy, you have to carry a 30% balance on your credit cards at all times. Though credit card companies like seeing payments made every month, they don’t even really know how much you have on your credit cards, or even if you’re paying an account in full. So just pay them all off and don’t carry a balance at all and do yourself a favor.

Don’t Shut Down An Account

Yes, please shut down the account. Over time we’ve discovered that having fewer credit lines doesn’t negatively or positively affect your credit score – it’s all about credit utilization. If you have maxed out 90% of eight accounts or 90% of two, it affects your credit score negatively, period. The number of accounts doesn’t matter, so shut down account and stop spending on it today.

All Credit Scores Are the Same

No, not really. There are so many ways to score you and your credit it would make anyone’s head spin. Even the FICO calculation itself can be calculated in different ways with a difference in a score up to 75 points, and when compared to other formulas that aren’t FICO approved, the difference can be hundreds of points. The credit score the company that pulls your score sees on any given day is probably ballpark, but usually not anywhere near exact.

Author Bio:  Elizabeth Roque is an in-house writer for Franklin Debt Relief. She presents information about debt relief services, credit card debt reduction and getting out of debt on a variety of financial sites online.

Although a customer can make his or her automobile last a very long time, the automobile will not last forever. Eventually, repair costs will exceed the value of the consumer’s trusty old vehicle.When that happens, it will be time for that person to apply for a car loan on sites like http://www.comparethemarket.com/loans/. The individual will need to find a reputable lender that will help him or her get into a reliable new vehicle. Getting a car loan is a huge financial step. A loan agreement is a long-term responsibility. The consumer may have to make payments on this loan for three to five years. Therefore, it is very important for that person to take his or her time and consider several things before proceeding.

Is a car Payment in the Budget?

Having a shiny new car is everyone’s dream. However, no one should take on the responsibility of a car payment unless he or she has the funds. Before a consumer even meets with a dealer, that person should draw up a financial profile. He or she should make a rough sketch of his or her income and expenses. If there is extra money available after paying bills, squaring creditors and shopping for food, then it might be possible to take out a car loan. In addition, the individual should jot down the exact amount available for making this payment. He or she will need this amount for negotiating with the dealerships.

How is the Credit Score?

A person’s credit rating will affect the down payment and monthly payment terms. The credit score will also determine what kind of lender the customer will work with. A debtor can obtain a copy of his or her credit report by contacting the credit bureau. A good to excellent credit rating would indicate several possibilities for auto financing. A poor credit rating might mean the consumer has to work with a buy here pay here type of company or a short-term finance company.

Bad Credit Auto Financing

Getting a car loan when one has bad credit is not difficult. However, the terms set by some companies may be impossible to meet. The consumer should perform careful research, as there are many opportunities available. The individual should never take on an extensive payment. The objective is for the person to pay off the loan eventually. Therefore, the consumer should make sure he or she is in the position to make timely payments on the vehicle.

The Relationship With the Vehicle

The relationship with the vehicle is the most important aspect of an auto finance deal. The individual will be obligated to pay for this car for several years. That person should not sign any agreements for an automobile that he or she does not absolutely adore. Most finance agreements cannot be reversed after a certain amount of time. No one appreciates being stuck with a car he or she does not like very much. The consumer should choose a vehicle for which he or she has a great passion. That way he or she will have the energy and the drive to fulfill the agreement and become the new vehicle owner.

Credit cards work wonderfully until their balances grow out of control. Unfortunately, but this point the debtor finds himself just managing the payments without even trying to work down the debt balance itself anymore. This leads to a slow but painful death spiral where the credit card payment eat up more and more of a person’s cash flow month after month.

Turning a revolving debt balance around is hard but it can be done without any special programs. The trick is to find a way to cut down monthly spending in such a way that the debtor can make a payment that not only pays the minimum interest but also takes bit out of the principal balance. Over time, even the most basic amount of payments will reduce debt until it is gone.

Alternatively, if a person has too much debt over too many credit card accounts, he’s likely juggling multiple card bills at different times of the month. A debt consolidation loan can be the answer. This approach takes one jumbo loan and pays off the various credit cards. The jumbo loan involves a fixed rate and payment over a time period, usually five years. This forces the debt to be paid down and it consolidates all the bills into one charge per month. By following with a closure of the paid credit cards, the debtor can be assured as long as he makes his payments on the consolidation loan the amount will go down and eventually be paid off.

A third method involves putting aside funds and saving them to then make a lump sum payment to remove a credit card. While this approach will end up paying more in interest rather than immediately putting the money towards the outstanding credit card account, it feels pretty darn good when the lump sum is ready to just pay off the account completely once and for all. It also gets a person in the practice of saving money. Once a saver understands how hard it is to save up to a figure, he gains a new appreciation for that money.

In all of the above approaches, it is critical to rein in spending and not incur more debt. Effective debt management requires that a person spends less than he brings in and doesn’t add more charges on his credit cards. Doing otherwise defeats the whole purpose of managing the credit card debt. While this discipline is easy to talk about, it can be hard to implement. However, most people if they look hard can find a number of areas where spending can be stopped.

Using your card as a debit card or a credit card?  Think that there is no difference?  Think again!  Even though you can use your debit card for just about any transaction that you would normally use a credit card for, you might be surprised to learn that the risks are actually far greater when you use your debit card, and there are definitely some places where you’ll want to reconsider using your debit card at all.

ATM Machines

Where do you typically go to get cash?  Do you go directly to your bank?  Most people don’t.  In fact, most of us will simply go to an ATM machine…any ATM machine, even if there’s a small fee associated with the use of an ATM machine that doesn’t belong to our personal bank.  But, how secure is that ATM machine?  Is it in a well lit area?  Is it affiliated with an actual bank, or is it a generic machine that is outside the local convenience store?  Is it inside or outside?  

The location of an ATM machine is actually very important – ATM machines that are not located in high traffic, well lit areas are at a high risk for criminal activities, such as skimming.  Skimming is a process where a machine is attached to the ATM machine and the machine then captures the information on the magnetic strip for later use.  Criminals can then reproduce an exact replica of your debit or credit card and use it to make all kinds of purchases in your name.  Even worse, if the criminals also recorded the PIN number associated with your card (using a hidden camera), then they can withdraw cash from your bank account, all the way up to the total amount in your account.

So, think about your next ATM visit – make sure that the machine is either in a high traffic, well lit area, or is actually located inside the bank or the mall.  And, pay attention to the actual machine itself – if something doesn’t look right, don’t use it!  Go somewhere else.

Restaurants, Bars & Other Retail Outlets

How many times have you gone out to dinner and, when it’s time to pay the check, simply put your debit or credit card into the slot of that little black folder and entrusted your card with the waiter or waitress who happened to serve you that particular evening?  And then you just went on chatting away with your dinner companions while the server takes your card to the cash register and rings up your bill…

Can you see the server while he/she has possession of your credit card?  Do you even look?   If you are like 95% of the people in this country, the answer is no.  And, if you’re like 50% of the people in this country who have been a victim of fraudulent charges on your debit or credit card, this is where a large percentage of this type of theft occurs.  In fact, we actually make it EASY for our information to be stolen – we hand them our cards, and we don’t pay any attention to where they take the card, or how long they have it.  And, it is so easy – all they need is a copy of the debit card receipt, or they simply copy down your debit card information in private and use it later, or they can even take a picture of the front and back of the card with a cell phone…

Definitely, in restaurants, bars, and even many retail transactions, get in the habit of using your credit card instead of your debit card!  (And, if you aren’t already aware of it, nearly all debit cards can be used as credit cards, too.)

Gas Stations

Just like your local ATM machine, gas stations can be a target for thieves to steal your information.  Not only are gas stations normally poorly staffed, with only minimal supervision of the pumps (and the pay at the pump swipe), but they are also easier to target than banks.  Most gas stations don’t have video cameras on the pumps and that lone clerk that works the night shift is often stocking the shelves, or filling the coolers, during the slow times.  Then, it’s easy for a thief to sneak up to the pumps, slip the skimmer onto the pay at the pump device, install a camera, and just sit back and collect card and even PIN numbers. 

Again, using your credit card instead of your debit card will provide that extra layer of protection between the transaction and your bank account!

Online Transactions

Okay, so we all love shopping online!  But, how do you normally pay for your purchases?   Do you use a credit card or do you use your debit card?  Most eCommerce sites will let you do both – but, you should ALWAYS use your credit card!

Not only do you have the risk of the unscrupulous employee at the other end of the transaction stealing your information from the physical location, but you also run the risk of your information being stolen via malware on your computer or on the merchant’s computer, or even via criminals “listening in” on your wireless network. 

Simply put, credit cards offer far more protection than debit cards in dealing with most cases of theft, fraudulent use, and even when you receive goods or services that are not as promised.   

When credit card users report fraudulent charges, the charges are typically credited to your card within a few days, but when thieves have stolen money from your checking account, it can take MONTHS for reimbursement!  

Can you afford to wait MONTHS if thieves were to clean out your checking account?   Use your debit and credit cards wisely!

When do you want to check your credit score? Well, almost always I guess, especially when you are building up debts or opting for debt relief programs. Your credit rating generally outlines your borrowing, charging, repayment activities and credit worthiness. A good rating helps you to reach your financial goals, buy a home and get a job, whereas a poor rating limits your financial opportunities. It is extremely important to keep an eye on your credit rating to check whether you are paying your loans and bills on time or taking on excessive debts or not.

It would best if we could just go online, type in our name, and have the score pop right up. But to our utter disappointment, it doesn’t quite work that way. Most of the time, we have to pay something to know our credit rating. However with scammers mushrooming in the credit market, we can be easily misled and the scam agencies can pertain to our credit score. Therefore, it is highly recommended to be mindful and watch out for these credit score scams.

Offering “free” annual credit score

It can not be regarded a full-on scam, but it’s a situation that plays upon the prevalent confusion about credit ratings and free credit reports. By law, you are entitled to obtain free annual report from each of the three credit reporting bureaus Equifax, Trans Union and Experian. However, most consumers don’t know the fact that this report does not come with a score. Once you’ve ordered the report, ransacked it, then only you realize there’s no score incorporated. You have to buy the score from the credit reporting bureau. Therefore if you come across a site which claims to provide the official free annual credit score, it must be a scam: as there is no such government mandate which provides free scores, yet.

Phishing scam

Sometimes you come across online credit score offers which ask you to provide sensitive personal data or passwords. This must be an attempt to get your information so that one can steal your identity, or sell the information to someone who will. Identity theft and forgery is quite common in the credit market. Therefore you must stay careful and only order products from reputable sources that you can verify. If you are prompted to re-submit you payment information or any other sensitive personal information, call the company and recheck the authenticity of the concern because this is often an indication of a phishing scam.

Final thought

Make sure the possibility of a scam should not deter you from getting a copy of your credit score. Knowing your credit score well certainly help you to avoid unpleasant surprises, set spending practices and get loans at more favorable rates. Stay vigilant and keep the above mentioned points in mind to watch out for credit score scams.

Christmas is over. The presents have all been unwrapped. The decorations are all stored away until next year. And now you’re just waiting for the January surprise…that’s right, your credit card bills will soon start to arrive in your mailbox!

If you’ve been careful and tracked your spending habits, your January “surprise” may not be much of a surprise. If not, well…we all know that sinking feeling as you open those bills and realize just how much the holidays cost this year.

Unless you want to spend most of the New Year paying off last year’s bills, you’ll definitely want to pay off those credit cards as quickly as possible. Here are a few tips to help you get started:

• Stop spending!  Many people get Christmas bonuses, monetary gifts from relatives, and the like, and then not only spend that money, but continue to use their credit cards to buy the things they wanted for Christmas and didn’t get.  Or they feel entitled to it, since so much money was spent on everyone else during the holidays.  Don’t fall into this trap.  Stop spending.  Stop using the credit cards and start spending responsibly again.
• Always pay more than the minimum amount due!  If you can possibly afford it, pay as much as you can towards the balance on your cards.  Consider putting that Christmas bonus, or that extra cash you received as gifts, toward paying down, or paying off, your credit card bills. 
• Consider a balance transfer to a card with a lower interest rate, or even a 0% introductory interest rate, that will allow you to transfer the balances of all your credit cards to one account.  Then, pay the account off before the introductory period expires.  (And don’t use the other cards in the meantime!)
• File your income tax return as quickly as possible, if you normally get a refund, and use your refund to pay off your credit card balances. 

And finally, a quick tip for next Christmas:

• Set a responsible budget for holiday spending and stick to it!  Many people get so wrapped up in Christmas and trying to get everything that everyone wants, that they forget about all the bills that are piling up.  Don’t allow this to happen to you.  Keep track of what you spend on each and every person on your gift list, and of what you put on each and every credit card that you have.  That way, there’s no January “surprise” in your mail box next year!

In this day and age with the economy as it is, a lot of people are starting to refinance their homes with second mortgages. It can help save them from getting foreclosed by giving them money with which to pay off their current mortgage, and then they can pay off the second mortgage once the economy gets better.

However, before you take out a second mortgage you need to understand three key things to watch out for:

Your credit report

Getting a free credit report is important for many reasons. For one, you will be negotiating your second mortgage in person, and it is a negotiation after all. You will be trying to get a better deal than the one your bank is trying to offer, which means that you need to know what your bank knows about you. Your bank will do a credit check on you and it will know your credit score (which is in a credit report), so if you know your score you can anticipate the bank’s reactions better and tailor your argument about why you need a good rate accordingly.

Your house’s value

Home values change a lot, especially recently when the housing bubble popped. Over half of Nevada homes are underwater, which means that they are worth less now than they were when they were purchased. If your house is underwater, the amount you will receive (and the amount you will have to pay off) will be less than it will be if it is worth more than it was when you bought it. By going to an independent assessor and determining how much your house is worth, you’ll be more suited to get a good deal on a second mortgage.

Your net worth

Everyone knows their income but not everyone knows how much their stuff is worth. If a bank is reluctant to give you a second mortgage and you are able to show that you can have some assets you can sell off if you really need to, then you might be able to convince the bank to give you the mortgage.

About the author: Murray Newlands is the CEO and Founder of Influence People, a San Francisco-based online marketing and blog relations consulting firm.

You can still go into a bank and do your transactions. You can fall into a line and wait your turn. You can elect to speak to a consultant in person. This option is still available and will be for some time. But in a modern and fast-paced society there are other considerations available to you. The internet has opened up a whole new world and with it many possibilities.

Have you ever considered managing an account online? Do you have a credit card and do you phone in or go to the bank for enquiries, statements, account balances and changes? There are definite benefits when you manage your account online. If you have access to the internet at home, you can save yourself a lot of time. In fact, it does not even matter where you are and what you are doing, as you can access your account online from just about anywhere. It is secure and convenient and you can keep track of your transactions and payments.

Many cell phones and smart phones have access to the internet, which means that you have the required internet connection 24/7. Check your balance when you are on vacation or on the beach, away on business or in a coffee shop. It gives you a lot of freedom.

You can make online payments, or set up a direct debit and even make debit card payments. It is possible to set up email alerts to tell you when payments are due or when you have reached your credit limit. You can be in complete control of your account, so to speak.

Instead of receiving statements in the mail, you can view yours online and you can do so anytime of the month, day or night. Even back statements are accessible. No more hassles with paper statements that have to be filed away or which get lost.

You can update any new personal details. If you have a new address or cell phone, you can go online and record the new details. Now you don`t have to hold on forever when you phone a bank or go to the branch and stand in a line just to find out later, the change you requested has not been processed.

In the event that you have forgotten your PIN, you can check it online. You can also use the online credit card to transfer a balance to your card. The deal that the company offers in this regard also has a bearing on whether a card is right for you or not.

Interest rates differ, so be sure to look at the rates that the various credit card issuers offer. Even though an online account is convenient, managing your finances effectively is the bottom-line and the rate you will pay on outstanding balances is crucial. Does the card offer cash rewards? Does it give cash back and discounts at selected retailers and can you view these online?

Compare all the online credit cards to find one that suits your personal style using Moneysupermarket.com which gives you access to a wide range of credit cards to choose from.

Responsibly managing your credit doesn’t have to be difficult, but if you don’t manage your credit responsibly, it can be difficult to get credit…and without credit, you can’t get that new car, or buy your first house, or even get a decent job in many cases. 

So, let’s look at the top five ways to establish and maintain a good credit score:

1. Establishing Credit – Sounds pretty easy, doesn’t it? Actually, it can be harder than it seems. With the economy in such turmoil, many lenders are simply not handing out credit cards and/or loans the way that they once did, so if you don’t have credit, you may have to start with one a subprime credit card, or in some cases, even a prepaid credit card.  If you already know your approximate credit score, it’s as easy as comparing credit cards that cater to your credit score, choosing the one with the lowest APR, or the best rewards program, or that doesn’t charge an annual fee, and simply filling out the online application.  If, however, you don’t know your credit score, it’s advisable to take a look at your credit report and then apply for your new credit card.
2. Spend Responsibly – Credit cards are not “free money,” even though it feels that way at times.  Whatever you charge on your credit card will have to be repaid, and if you don’t pay the balance in full every month, you’ll actually end up paying MORE for anything that you put on your credit card.  Therefore, it’s advisable to only use your card for those purchases that you can either pay in full every month OR for those unexpected emergencies where you actually need to pay over time.
3. Pay Your Bills on Time – To maintain your credit score, regardless of whether it is excellent, good, fair, or even poor, you must pay your bills on time.  This applies to your credit card bills, your loan payments, and all sorts of other accounts, such as utility bills, doctor’s statements, insurance premiums…the list goes on. Simply put, if you can do so, pay ALL of your bills on time, every time.
4. Increasing Your Credit Limits – As you establish a good credit history, many credit card companies will begin to offer you increases in your credit line.  sometimes these increases are automatic, others you will need to request the credit line increase.  Either way that this works, whenever you’re in a position to increase your credit line, it’s actually to your advantage to do so.  The more credit that you have available, with the lowest amount of overall credit usage, can significantly increase your credit score.  And, increasing your credit limit on a credit card is like applying for a new credit card, except that you’re not penalized for having the additional credit inquiries added to your credit report.
5. Adding New Lines of Credit – Once you’ve responsibly managed your credit for a while, your credit score will stabilize, and you can begin to open new lines of credit as needed for major purchases, such as household appliances, auto repairs, etc. Remember however, you should always pay the item off as quickly as possible so that your debt to available credit ratio declines, thereby increasing your available credit, and potentially raising your overall credit score even further. (Only do this once or twice per year, though, as having too many inquiries into your credit report can actually lower your credit score.)

The best part of student life is financial freedom. As the students step into college, their parents gift them credit cards for maintaining their daily financial needs. This is a more common practice with out of state college students as they stay away from their parents and need to take care of their personal finances. Though college is the greatest time to get your credit cards, yet you must make sure that you receive enough advice on effective credit card management so that you do not misuse your credit cards. Credit cards, if botched, can make you rack huge amount of credit card debts. Though credit card consolidation can be resorted to, yet students must stay away from all the ways in which they can even slightly hurt their credit score as they’re on the process of building their score. Read on to get an idea on the factors that you must know before getting a credit card.

Read more on Credit cards for out of state college students- Factors they should consider…