I read an interesting article headline the other day that just made me have to read the article in its entirety. Good headlining, I’d say! It was something about “are credit score websites committing fraud” or something to that effect, so I figured I would check since I have checked my free credit score online a few times.

American consumers are actually entitled, legally under federal law, to received two free credit reports a year (at least that is the last I heard). It’s a great service for people who are concerned about their credit score, but do not want to have to pay to get it all the time, or to subscribe to a monthly service to get it.

A lawsuit was recently filed against Experian, one of the big boys when it comes to credit report suppliers, and a company who supplies credit data to a plethora of creditors, banks, insurance companies, you name it.

These companies pay for their services so that they can make educated, informed decisions about who they are going to take on as a loan customer.

If they are deemed a high risk because of a spotty credit history, then they may not take the risk of taking on the loan, and if they have a great credit history, it’s a win/win for the customer and the lender.

The argument that is being made in the lawsuit against Experian, and its popular FreeCreditReport.com site is that when customers sign up for a monthly credit report monitoring service, they are under the impression that the numbers they are getting sent to them each month are the FICO score, which is the golden number most creditors look at.

However, the lawsuit contends, Experian is actually providing the consumer with a number the company concocted which is supposed to tell you if your credit is good or bad, but it is not the actual FICO score.

The lawsuit contends that it is misleading since it is a proprietary formula made up by the company and not the “official” FICO score they may think they are getting. It will be interesting to see how it is argued out.

I’m not sure I agree it’s a case of clear fraud, but then again I’m not sure of the details of the case either. It may set a precedent though if they are made to pay up. You are entitled to a free credit report with no strings attached though, remember that!

It’s amazing when you read some of the stories of how lottery winners, literally some of the luckiest people on the world since the odds are so low that you will ever win anything, least of all the mega millions jackpot, actually end up broke or claiming bankruptcy due to poor financial planning.

If you ever come into a windfall of money like the lottery, it’s important to take a moment to make the right plans for several aspects of your newfound wealth. For one thing, find yourself a great tax accountant. They will help you muddle through all the ins and outs of doing certain things with your money, and will help you keep the most that you legally are entitled to without getting choked by taxes.

Another important person to look for is a trustworthy financial planner. Financial planners can help you to actually map out a budget, plan long term for where your money is going to go, and also to help you make the wisest investments with your money according to your risk tolerance and goals.

In short, a financial planner can keep you from blowing it all and then ending up with no retirement or savings plan.

The next thing you are really going to need is an estate planner. The estate planner can help to ensure that after you are gone, your loved ones can get the most benefit out of your inheritance that they possibly can. It means that less may go to Uncle Sam in the notoriously large estate taxes, and your loved ones will get the most they possibly can within the limits of the law.

As soon as you have any idea that you are coming into a large sum of money, it’s important to take a breath and decided what to do with it first. Make sure you first pay down any sort of outstanding debts, especially revolving debt like credit cards and lines of credit.

After this, you may be able to treat yourself to some stuff, or make a few wise investments with your newfound financial planner hirees, but it’s important to never spend outrageously. It’s well known that when people become wealthy, it seems like everyone and their brother is looking for a piece of it.

People suddenly need loans, ask for large favors, and do things they never would dream of doing if you hadn’t come into wealth. Choose these gifts of generosity wisely, and make sure that you feel good about it.

I read a really interesting column the other day about a guy who was only on social security, a small amount to live on monthly, and he was essentially asking how he can strategically default on his credit cards after maxing them out.

He would “strategically default” on these maxed cards much like people have been doing with their homes. They actually purposefully do something to get out of paying the debt.

In a homeowner’s case, they just stop paying the mortgage even though they have the money to do so. In a strategic defaulter who plans on doing this with other loans or credit cards, they actually claim bankruptcy to avoid having to pay the creditors the money back that they just racked up.

Nice, huh? This, my friends, in the end, basically costs all of us responsible bill payers money.

It jacks up interest rates since companies have to recoup defaulter’s money some how, and essentially makes it harder for all of us to get loans, get credit cards, and get lines of credit since it really messes with company’s bottom lines and who they will give money to since it messes with trust.

Not only that, a person who maxes out credit lines or credit cards is actually hurting themselves in the end. They are hurting their FICO score. Your FICO score can be substantially damaged by maxing out your credit accounts.

It shows that you may be overextending yourself, and that you may not have control over your finances. It shows that you may be at a higher risk of defaulting on credit lines or cards.

It can take a few years to get your FICO score, the belwether by which all creditors judge your credit worthiness, back in good shape to where creditors will consider you again. That’s quite a risk you’re taking with your credit score and ability to make large purchases and investments, like a home, in the future. Is it really worth it?

And as far as charging up credit cards purposefully and then claiming bankruptcy? Honestly, I do have a huge moral problem with that. I think you have to really take a look inside yourself and see if you feel like this is ok to do. Do you really want to shirk your responsibilities?

Or do you want to take matters into your own hands and find ways to make extra income so you don’t feel you have to cheat the system like this? It’s definitely a matter of integrity and self examination.

When it comes to finances between a married couple, or just a couple who is cohabitating for a long period of time and shares expenses, it really does come down to a matter of trust and mutual respect.

My husband and I try to really keep the lines of communication open when it comes to what we are spending.

We decided that for us, it was best to keep separate checking accounts and credit card, because I’m somewhat anal about keeping records and he’s, well, he’s very lax about it. Just that mere fact alone could have causes several arguments and points of contention.

We knew that was one of our limitations as a couple, and so we avoided lots of contention by choosing to keep certain aspects of our finances totally separate. It has worked really well for us personally.

Sure, we may get strange looks from people if we tell them this, but it’s our business, and it works for us, so we really cast aside any strange looks with a shrug of our shoulders.

I do not want to have to be anyone’s parent when it comes to money, and he doesn’t want to be parented when it comes to money, so it works out well for both of us.
I feel like we probably avoided that trust issue that comes in when one half of a couple feels so restricted by sharing everything that they feel forced into getting their own credit card, and making charges that their other half have no knowledge of.

This is really what’s called “financial infidelity”. It’s when you intentionally do not tell your partner about some aspect of your spending habits. An example would be that you charge up a credit card that they have no knowledge of, or you make a large purchase with a personal loan that they have no knowledge of, things like that.

My husband and I have made a commitment to tell eachother what we have charged. We get together once a month or every two months and talk about where we are with certain bills we pay (we also split the bill paying duties) and the progress we are making on the bills we want to pay off, like high interest revolving debt for instance with balance transfer cards.

Doesn’t it seem like every time you go to a clothing store, or even a department store, they are trying to get you to sign up for their store credit card at every corner and every register? I have a few stores in mind when I’m saying this, that try to push their store card on you every single time you stop in when you ring out your merchandise.

What I really love is that if you politely turn them down, sometimes they look at you as if you’re crazy for turning down such a great deal, or great deals to come. Well, hey guess what, my overall credit score means a lot more to me than getting ten percent off this order right now, ok? And all the coupons in the world aren’t worth potentially adding too much credit to my repertoire, alright?

I’ve gotten to the point where if they get pushy after I say no the first time without explanation, I then say, it’s too much to keep track of and I don’t like having more credit cards than I need, and that one they can usually identify with. Albeit, there are still a few that get pushy even beyond this point at which time I totally tune out their sales pitches.

You see, if you give in to every little sales pitch about how great a store credit card is, then you just may be damaging your credit score. Try to only sign up for the ones that you’ll truly use, and more importantly, pay off before the intro rate wears off or the zero percent deal goes away so you aren’t paying any interest.

Basically, I only have a few of these store credit cards, and most of the time it was so that I could finance something large into monthly payments with an introductory zero percent rate so I could break down the lump sum over six months or more. That’s the only reason I have them.

Either that, or if it’s a place I happen to frequent, say a place I always buy clothes from that offers great discounts only to credit card members, then I’ll do it. But not if it’s a place I barely go to, do I sign up just to get some great bait deal! It’s not worth it, and in the end, if you give in to every one, you really could be damaging your credit score, so it’s just not worth it.

I think it’s so funny how seemingly arbitrary credit scores and overall credit standing seem to be sometimes. My husband and I are a perfect example of this. I’m just gonna come right out and say it. I’m the higher earner in our marriage. It’s not because my nine to five job pays more, our jobs actually pay about the same. It’s because my side business makes a side income, and puts me past his total income.

And yet, he was always the one to get more credit card offers. It’s been going on since before we were married, and the situation was the same back then too. I think that he had a lower amount of debt on paper and also happened to have just the right credit to debt ration, whereas I was the one who had the credit lines and the loans opened in my name. Therefore, they probably viewed me as a bit more of a risk because I had a higher debt to income ratio.

However, the facts couldn’t contradict what you see “on paper” with us any more. He actually has more revolving debt that I do, and I actually have more free cash flow than he does.

We still split the bills, like we did before we were married, because frankly we are both just used to it and it just works really well for us. I know some married couples are all about combining money and checking accounts, but we’ve found there’s less clashing about money when the accounts are separate and we can mind our own financial business.

Yeah, it’s not the most romantic idea, but neither is fighting over money and balancing checkbooks a certain way. It’s different for everyone, and everyone should just do it how they are comfortable.

My credit reports and scores must be getting better, although why I don’t know. Perhaps the credit agencies or the powers that be are seeing that I’m paying down our house and other debts quicker than they need to be paid down. Maybe this signifies an extra free cash flow in the household and reflects well on what your disposable income might be. It is probably a good predictor of what kind of credit risk you are.

So, I’m getting credit card offers by the gross again, just as I used to get before we owned a home and socked a lot of money into the mortgage payment. It’s funny because I don’t even think about applying for any of these credit cards. I just put them in the paper shredder and ignore them. I have one United Airline miles credit card, and one United Airlines debit card for personal use, and that’s all I need at this time.

I just wanted to share with you a personal story about how the pressure of credit card debt and other types of debt and financial pressure can really add unneeded stress and resentment to a relationship, in this case a marriage. However, what I do want to point out is that if your marriage is strong and you really have a deep love and respect for one another, finances should not ruin you.

Of course, there are the stray stories of people who are really sick and just can’t stop themselves from spending or doing something like gambling, but let’s face it we’re all human and most of us have been in financial trouble at one point in our lives.

My husband and I are very fortunate. We’ve worked really hard to get to where we are today, which is almost credit card debt free, but it took a long time to get there, and we’re still working on one of his college-days credit cards he racked up.

We’re able to take the occasional small vacation, although we rarely go anywhere really expensive. We didn’t even go no a honeymoon after we got married because we wanted to be smart and wait until the economy improved and our incomes improved since we rely partly on sales to feed our wallets.

We’ve made sacrifices, but we’ve also been able to have a great home with great furniture that was all paid off right away thanks to excellent incomes when the economy was good. My husband and I realized that in order to be truly financially independent, we had to be totally free of credit card debt, so we immediately went to work to clear up his debt.

I myself had a lot of credit card debt, but that was many years ago and I tried to teach him the prinicples I had learned to live by out of necessity which were that you never used credit cards unless you knew for SURE you were paying them off that same month. That way, there was absolutely no danger to get into.

The emotional toll it took on our relationship for him to confess to me the debt he was still in from years ago was pretty rough, but by talking through it and promising to be honest and open and not afraid to talk about these things, we actually made a deeper bond, and forged a new, deeper chapter in our relationship.

I recently had this situation come up, so I thought I would write about. Naturally, if you’re close enough to consider cosigning for someone who is either too young to have good credit on their own and needs a guarantor for a loan or credit card, you want to help them out. But there are other things to consider about your own credit that may concern some people too.

Many people have the question “will cosigning for this person negatively impact my credit?” This often may be the determining factor on whether you help this person out to a better road in life! What you have to take a really hard look at is their reliability and their financial responsibility.

You will have to come to a firm agreement with this person that they will pay their bills on time for this loan or credit card, because if they default on the loan or credit card, or if they are late, this can directly impact your credit report. The reason for this is that you are taking full responsibility for paying this loan or credit card if they cannot pay it.

I saw this happen to someone very close to me in my family, the person she cosigned for totally defaulted on the loan, and it cost a lot of money for her, and there were some hard feelings between her and the person she cosigned for the loan. So this can definitely end up blowing up in your face if you and the person you are cosigning for don’t have a firm agreement and understanding in place of what the expectations are up front.

There’s a reason why they often say that friendship and family don’t mix well with money or business, and there can definitely be a delicate fine line here. If you can do it, and you trust the person wholeheartedly that you are cosigning for, you can really make a huge difference in their lives by cosigning for something for them.

This can start them on their way to building good credit, which can afford them the “American Dream” down the road. Whether you’re starting them off as a young person building credit, or you are helping someone who’s had some bumps along their financial road and has bad credit, to rebuild good credit (as long as they have good intentions), it can be really rewarding to know that you can share that kind of good fortune and offer your little slice of help to the American economy by helping someone get on their feet.

I must admit, I am truly of the generation that loves to use the computer for as many things as they possibly can. I don’t need the “human touch” with most things. I’m naturally a bit shy, so I don’t like a whole lot of face to face contact, and I would much rather shoot an email off to someone than have a phone conversation. Terrible in some ways, isn’t it? And yet I’ll admit, I’m a bit on the antisocial on the end of the spectrum. However, I love to write, and I feel that I get my feelings across in a much better way in writing.

Same goes for paying bills. When it comes to paying my bills, I’m not someone who needs to see papers in front of me to organize my bills. In fact, I relish the fact that I don’t have to have a bunch of papers, and when I have the option to go paperless, which is all the rage to save on paper and mailings, or to get my bill in electronic fashion only, I ALWAYS choose the electronic. And I STILL get a lot of mail, go figure.

One thing you do have to be careful with when you go all paperless, is to make sure you don’t forget to pay those bills. I always go with an email notification if they have the option. In fact, I receive email notifications on both of my mortgages, so I know when they need to be paid, or for my primary mortgage, I know when it’s being auto deducted from my account.

Another practice I have for remembering my bills is that I set reminders on my computer to pop up reminders when I have a bill coming due. It’s easy when I’m sitting at my computer (which is every single day at home and also at work, where I have another reminder system in place), to see a forced visible reminder of my bills due pop up right in front of my face when they’re due. I have really never forgotten to pay a bill online, because I have this system set up.

It really does save time, stamps and paper when you go totally paperless. Even if you can’t do it for all of your bills, try doing it for some and see how you like it. You won’t believe how easy it is. Oh, did I mention also that you will love the fact that you don’t have to write out checks any more!? That’s another great fringe benefit to having your bills sent to your electronically.

A law that was passed back in 2003 allowed every US citizen access to one free credit report from the three major credit reporting agencies per year. Those three major agencies who gather credit data and supply reports to financial institutions who are looking to assess the risk they are taking on when deciding whether to loan you money or lines of credit or not are Transunion, Equifax and Experian. Companies use these reports all of the time to gather data on their potential customers to gauge the risk and to help determine what kind of interest rate they are going to give you.

This is why these reports and the information they supply is so vital to your financial health. A good report can literally mean the difference of thousands of dollars in interest in just a mere year or so of having a loan or line of credit out. You can see why everyone should be interested in not only checking their credit reports, but in keeping them in top shape as well.

The reasons behind the government push for all around free credit reports, to my understanding pretty much whenever you need one, regardless of whether it goes over once a year, has many different thoughts behind it.

Credit history and your credit score, which is a numerical ranking system that companies take into account when they consider what kind of deals to give you, not only contribute to rates received on loans and financial instruments, but they are increasingly used in so many other sectors of your life that can really affect your quality of life now.

One example is that credit scores are often used in determining your rates on car and even home insurance. Insurers look at a good credit score as an extra sign of responsibility. They also look at it as a sign that you will be able to pay your premium on time, which makes you a better candidate for their service.

Even the jobs you go for may order your credit report to help them decide on whether you are a good candidate for different types of jobs. They look for signs that you may not have paid things on time, or have any major delinquencies under your belt, and take this all into consideration when picking who works for them. This is becoming more and more of a common practice since employers can afford to be a little pickier about who they hire.