15-minute fixes to raise a credit score

15-minute fixes to raise a credit score

Setting up automatic bill payments can boost your number by as much as 50 points.

Improving your credit score can feel like a gargantuan task. But by spending just 15 minutes, you can give your credit score anywhere from a small bump to a major boost. Here are some tips from credit experts on quick — and sometimes easy — ways to raise your score.

1. Set up automatic bill payment or alerts.

“The one thing you need to do is pay bills on time — that has the biggest impact on your score,” says Carrie Coghill, director of consumer education for FreeScore.com. One way to do that is to set up automatic bill payment through your bank or credit union, at least for the typical minimum amounts of your bills, says Lita Epstein, author of “The Complete Idiot’s Guide to Improving Your Credit Score.” Or, if you’re not comfortable with automatic bill payment, Coghill recommends setting up regular email or text message alerts to remind you of bill due dates. On-time payments over a period of about six months can increase your score by as much as 50 points, says Epstein. “It shows you are getting responsible about your bills.”

2. Pay down revolving debt.

If your credit card debt is more than 35 percent of your credit limit, it’s probably dragging your score down, but paying balances down can provide a quick boost. Experts recommend setting up regular automatic payments to make a dent in your debt or making one big extra payment if you can sell something on Craigslist or eBay or if you get a windfall. “People sometimes get a sizeable tax refund. I recommend using that to pay off debt,” says Doug Borkowski, director of the nonprofit Iowa State University Financial Counseling Clinic. A good rule to follow is this: For every $1,000 of available credit, try to use less than $350, says Clifton O’Neal, a spokesman for TransUnion. “Say you have three cards, each with a $1,000 limit,” O’Neal says. “One has a $500 balance, one has a $350 balance and one has a $250 balance. Pay on all of them, but pay more on the first one to bring it down under 35 percent.”

3. Pay your credit card bill early.

If you use your card for everything from groceries to utilities to a pack of gum to get rewards — but pay in full each month — pay early. Because if you charge, say, $2,000 each month, but pay your bill after you get your statement, it looks as though you’re carrying a large balance when you’re not, Epstein says. “Check when the statement closing date is,” Epstein says. “Making the payment before the statement closing date — just five or six days early — can make a big difference over time. It will be reported to the credit bureaus as a $0 balance and will look like you’re holding less credit.”

4. Ask your credit card company to raise your limit.

If you carry a credit card balance but have been making payments on time and make enough money to support a higher credit limit, a quick phone call to your credit card company could raise your score. A higher credit limit will lower your credit utilization ratio (the amount of available credit you’re using), experts say. However, experts also say it’s important to be honest about whether that step would tempt you to rack up more debt. “It’s about knowing yourself, asking, ‘Am I going to be responsible using that credit card?'” Borkowski says. “Because what if your limit is $4,000 and it gets raised to $8,000 and all you end up with is more credit card debt? But, for those who can handle it, yes, call and try to get your limit raised so you’re at a one-third or less [credit utilization ratio].”

5. Go online to dispute an item on your credit report.

Some experts advise consumers to dispute a possible credit report error by registered mail, and to include evidence. But, let’s face it, many never get around to making copies, hunting down a stamp and heading to the post office. All three major credit bureaus offer the option of filing a dispute online — and it can be faster and easier, experts say. “The first thing to do is pull a copy of your credit report from all three bureaus. You can do it free once a year at AnnualCreditReport.com,” says O’Neal. “Look at each one and see if there’s anything you don’t recognize. If you have any questions about information on your reports, you can file a dispute online. You can track it online, too, so it’s a lot quicker.”

6. Just say no to too many inquiries.

When you’re buying those cool new sunglasses and the cashier asks if you’d like to get a 10 percent discount by signing up for a store credit card, just say no. “Whenever you take new credit, you get a ding on your credit score, so don’t apply for new credit cards all the time,” Epstein says. In fact, she recommends applying for new credit, at most, twice a year.

7. Get a late payment removed from your credit report.

In the “it-can’t-hurt-to-ask” category, it sometimes pays to call a creditor and ask to have a late payment removed from your credit report. “I always say, ‘just ask,'” says Borkowski, who recommends asking for the hardship department whenever you call a credit card company to make such a request. “A lot of times, general customer service might say they can’t help you, but the hardship department — or its equivalent — might,” Borkowski says. “They make a lot of money from the person who misses a payment every now and then but carries a big balance. They like to keep those customers.”

It is often repeated that, when it comes to credit scores, there are no quick fixes. However, if you follow these tips, you could see a big improvement in your credit score — with just a small investment of time.

The dangers of using a debit card

The dangers of using a debit card

Consumers should be especially vigilant during the holiday season because identity thieves out en masse. Therefore it is essential that consumers keep their debit cards on the ice, “said Beth Givens, director of the Human Rights Chamber of privacy and exchange one of the foremost experts on the nation Protecting your private information confidential.

What makes debit cards so dangerous? Givens has so many reasons, his organization has developed a comprehensive information sheet if you must use cash, credit or debit card when you shop. (The report also explains the failure of gift cards.)

Here is the short version of the dangers of speed:

1. Limit Losses

Like credit cards, federal law limits your liability for fraudulent transactions on a debit card at $ 50. But only if you notify your financial institution within two days of discovery of theft. If you are a cadet of the space and do not check your bank statements for a couple of months, you could lose everything.

2. Pay Now / Reimburse Later

If someone has fraudulently used your credit card, you do not pay the fee. But when someone has fraudulently used your debit card, money is deducted directly from your account in real time. That means you’re out of money while the bank does have a quiet examination of their records to assess your application fraud. Many consumers complained to the Privacy Rights Clearing House have said they have lost access to their funds for several weeks. In the meantime, they have been caught short and unable to pay their bills, Givens said.

3. Merchant Disputes

The same problem affects merchant disputes. If you pay with a credit card when ordering something online, and that the product is damaged, broken or not at all, you can dispute the charge and stop payment by credit card. If you used your debit card, fees are paid when you order. When you find the goods were not what was announced, the merchant has your money and you are in the unenviable position of having to fight to get your money.

4. Phantom Expenses

If you use a credit card in a hotel, the hotel makes an impression when you register, but do not charge your card until you visit. It is a very different story with a debit card. Generally, the hotels put on hold “on funds in your account for more than you spend. Yes, more. They hold the entire amount of your stay, plus an estimated amount for “false”, such as meals at the hotel restaurant and diving into the mini-bar. This is not a real charge, the hold comes off your account at the end of your stay. But it affects the available balance in your checking account anyway and can lead to overdrafts. One consumer said that these accusations phantom cost him $ 140 in overdraft fees. These takeovers are usually placed on transactions made by debit card at hotels, service stations and car rental companies.

5. Overdrafts, Overdraft and Most Found

Overdraft charges have soared in recent years and the vast majority of consumers who pay to explain their discovery is the result of a transaction by debit card. Many consumers naively that if they have insufficient funds in their accounts, their bank would not approve a slip flow. But they were wrong. The result: a $ 4 coffee could trigger an overdraft fee of $ 35. Government regulators are reigning in these costs by requiring banks to give consumers the opportunity to “opt out” of overdraft protection automatically, but that does not begin to existing accounts until August. (If you have a new account, it starts in July.)

6. Skimming

Financial scammers have obtained sophisticated in recent years and that you use “skimming” machines to read your card information and charge your account, “said Givens. When your debit card is skimmed, your bank account can be drained before you know you’ve done.

Financial fights that can lead to divorce

Financial fights that can lead to divorce

Much has been written about how difficult economic times forced them to postpone couples divorce. They simply can not afford. The legal fees and accounting fees grow as a union is dissolved and a two-earner family life less than a pair of two single-person households.

As the economy improves, we’ll probably see the divorce rate climb. But even if money woes are not separate couples, financial disputes are still the cause of irreconcilable differences. Here are seven common financial issues that may lead to a divorce:

Paycheck Envy

More women enter the marriage with assets of their own and many earn more than their spouses. According to the Bureau of Labor Statistics, one in three women married outside her husband wins. This amount increases by more than half if they earn $ 55,000 or more.

Men may feel threatened by not having their bragging rights as traditional breadwinners. For women, this means they have their own money away from the irresponsible action of a companion. With more play, women can not afford to be accepted to their partner how past generations were.

Debt

Utah State University Professor Jeffrey Dew author of a study often cited, which found that couples argue about finances at least once a week are 30% more likely to divorce than those who do sometimes leads to questions of money. Couples with no assets were 70% more likely to divorce compared to couples with assets of $ 10,000.

Cup in the ability to build the assets is dependent upon long-standing American credit card, but it can be a source of optimism. Who raised a record $ 988 million in revolving debt in 2008, the Americans eroded nearly 90 billion dollars last year there, according to the Federal Reserve. credit cards less debt should result in increased savings, more active and potentially more couples happy.

Bills

As part of an investigation last year, Fidelity Investments has found that less than half of couples make the daily decisions and financial issues such as budgeting and paying bills (45%) .

In many couples, one person is still paying the monthly bills at the beginning while the other could wait until the due date and beyond. checks can be cut even more stressful when one blows unnecessary monthly budget shopping and boyfriends do not take kindly to cable or text message their expensive batteries Better Half in the mixture.

Economy

While half of the relationship may be economical, offering dedicated and committed to building a retirement plan, the other may be more carefree, with a live “today, you can not take it with you “Outlook.

Invest

We can assume that investment decisions are increasingly dividing couples if both partners are financially sophisticated. The risk tolerance may be incompatible with the objectives out-of-synch.

Dump Apple or go long can also be a divisive debate that how often a mother-in-law visit. Overlooking an investment portfolio or 401 (k), one spouse may want to explore emerging markets fund, while the other rejects nothing, but in any national security to the large caps and bonds.

Then about a guy find true happiness with a sort of fundamental analysis of the gal?

Different Expectations

There is no shortage of men and women who value money more than love and companionship. You can be quite content to “live love” and weather financial situation “for better or for worse.” But she may feel entitled to a McMansion in a suburb of Tony and a Mercedes in which to drive your children to private school. Trouble is brewing with his latte grand prize.

Secret Stash

Financial infidelity is a newly coined term that describes situations in which one spouse is hiding cash or credit to his companion.

This may seem like a good idea to have a credit card or bank account secret that you can tap into, but your partner will probably be a big scandal in the underground. Beyond financial dishonesty on the screen, such gains may be a warning sign of even greater transgressions – maintaining a slush fund to pay the tab strip club or support a mistress on the sly.

Debunking the myth of ‘good debt’

Debunking the myth of 'good debt'

Don’t prolong your state of debt by thinking some liabilities are smart to hold.

Think your low-interest mortgage is good debt? Think again. There is some comfort in believing that being in the position of owing money to someone or some company can in some circumstances be “good.” Suze Orman, arguably the world’s most popular personal finance author and guru, explains the supposed difference between “good debt” and “bad debt.” Mortgages and student loans are examples of good debt, while car loans and credit cards are bad. Some debt, like high-interest loans and credit card debt, are certainly worse than others, but rationalizing owing money to others by calling it “good” is a stretch.

When the public is willing to consider any particular type of debt good, the lending industry is the only winner in the long run. For the benefit of our own personal finances, we’ll prosper more by considering all debt bad and striving to eliminate that debt even if we feel it is good.

Don’t fall into the trap of prolonging your state of debt while holding the idea that these forms of owing money are somehow good. Here’s why “good debt” isn’t all that great.

1. Mortgages. A mortgage on a house is a classic example of a type of debt personal finance experts and real estate agents want the world to be at peace with. There is something to be said for mortgages: the reality is that only a small percentage of Americans would be able to afford to purchase a house without access to a loan. The lending industry and the government have historically made it as easy as possible to own a home. We’re not escaping home ownership debt any time soon.

The deeper reality is that the value of real estate increases at or a little higher than the rate of inflation over the long term, but is much more unpredictable over the short term — the length of home ownership most people experience. Some consider mortgages to be good debt because it allows a home owner to be highly leveraged, in a good position for appreciation, but it is risky.

In addition, the tax advantages to paying mortgage interest are frequently overstated. While most taxpayers see an increased refund thanks to the mortgage interest deduction, the benefit can’t compete with not paying interest at all. We’re stuck with mortgages for now, but there’s no solid reason for keeping them around longer than necessary, as one might do with anything called “good.”

2. Student loans. Student loans are an investment in the future; a bachelor’s degree in hand will significantly increase a person’s lifetime income compared with just a high school diploma. Again, the lending industry encourages taking on unnecessary debt, and colleges and universities are complicit.

It is unnecessary to borrow money to finance a college education. In his forthcoming book, Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents, author Zac Bissonnette explains how student loans can be more devastating to an individual’s financial condition than a mortgage. Did you know that bankruptcy can eliminate your credit card debt and your mortgage but your student loan will not be forgiven? Even the government will garnish your social security wages if you default on your student loans.

Bissonnette also shows how there is no good reason to borrow money for an expensive private college or Ivy League university when the quality of education you can receive and your earning potential is matched or bested by an inexpensive, local state college. Reconsider the assumption that you pay a higher price for quality.

3. Start-up costs. Whether starting a business requiring an up-front purchase of inventory or have just graduated college and need to buy appropriate attire for a career, some personal finance experts advise the cash-strapped newbie to anticipate tomorrow’s income and pay for your expenses with a credit card or take out a loan today. This, like borrowing money to invest in something without a guaranteed return, is risky.

While it is often true that success requires taking some risks, consider your options for dealing with the worst-case scenario. Unemployment is still at a high level, and many of last year’s graduates are still out of work with credit card balances increasing. Most new businesses fail.

Even borrowing money to finance assets expected to appreciate like a house, a person’s income potential through education, and a career or business carries risks and in some cases can be fully avoided with smart preparation. You may hear some personal finance experts call these types of debt “good,” but they are far from beneficial. At best, they are like other debt but might help improve your financial condition or quality of life at some point. At worst, however, even this debt can devastate your future if not watched, cared for, and eliminated.

Spending cuts you might not even notice

Spending cuts you might not even notice

These tricks could raise your income or reduce expenses without affecting your quality of life.

It’s painfully clear Americans are still hurting financially. Jobless claims are far too high if we’re actually in any kind of meaningful recovery. Penalty withdrawals from 401(k) plans have been increasing, not shrinking. Mortgage rates are hitting 40-year lows with regularity and we still can’t find a pulse in the housing industry.

If there was a magic wand that would sharply raise incomes or reduce expenses, we’d be out there waving like mad. But that doesn’t mean there aren’t ways to cut and stretch. If you can afford it, give yourself some transition time to get used to spending cuts. Some will come at too steep a price in terms of your quality of life. But others may be painless, and you’ll never look back.

1. Know where your money goes.

This is Number One Obvious Idea that many people don’t follow. How can you possibly know how to save money if you don’t know what you spend it on? There are a growing number of online budgeting sites to help you. Use one, or do this yourself. Whatever you’ve been spending each month, try cutting it by 5 percent. Then cut it by another 5 percent the following month. Keep it up if you can, and put the savings in the bank or pay down debts.

2. Make a grocery list and don’t stray.

Once you’ve tracked household spending, you will see how much you spend at the supermarket. What’s less clear is that you also probably spend a lot of money on stuff you don’t need. In our house, we began downsizing our grocery spending by seeing what we were throwing out and the items that had freezer burn and should have been tossed. This helped sensitize us to unnecessary purchases. (My mom passed away nearly 30 years ago and I can still remember her hollering at me about wasting food.) We also save money by making fewer runs to the store. Our greatest savings come when we make a weekly meal plan, create a shopping list for that plan, and then buy nothing but what’s on that list.

3. Mothball a car.

If your household has two cars, try leaving one in the garage for a month. See how it affects your life. With a modest amount of planning, a lot of households might be able to make do with a single car. Once you’ve determined that you can do likewise, sell the second car, bank the money, and also begin enjoying lower bills for auto insurance, gasoline, and maintenance.

4. Try free phone service.

I’ve bought and used the MagicJack service, which is the most popular of its type. You order a small device — perhaps an inch and a half by three inches and about an inch thick — and it connects to your home computer. The software that launches when you connect the device provides easy-to-follow instructions. MagicJack also links from the computer to your existing phone set. So, you are making your phone calls over the Internet but using a regular telephone to do so.

I’ve found the audio quality higher than with products that require separate headphones and microphones. And picking up the phone is such a long-ingrained habit that there didn’t seem to be much to learn. You do need to get a new local phone number, which Magic Jack will provide at no extra charge. After the initial fee, there is no charge for domestic phone calls. This switch can easily save you hundreds of dollars a year. Think about keeping your existing phone line for a transition period in case MagicJack or a similar device doesn’t meet your needs. If you like the MagicJack and also have a cell phone, if could make sense to cancel your home land line and switch your home phone number to your cell. You’d lose your existing cell number but you’d at least be able to keep your old home number.

5. Trim television services.

Hey, I love my cable, and millions others love their satellite dishes. But if the times demanded, I would wave goodbye to a bundle of monthly cable charges. I’d also be in mourning during football season but I’d survive. I would install a digital antenna. And I’d begin making much heavier use of free online video sites that the networks and other providers offer.

6. Recheck insurance rates.

A year ago, I went out shopping to explore replacing all my insurance coverages. I wound up saving a bundle. When you’ve had your auto, home, life, and other insurance policies in place for several years, it’s easy to forget what I call “creepage” — those annual bump-ups in premiums. They really add up after a while. And while constantly rising health insurance rates may make it seem like premiums can only move in an upward direction, that’s not true. When you do shop around, you also may discover that your coverage needs have changed. If your cars are the same ones you had five years ago, for example, you probably don’t need as much collision insurance as you once did.

7. Forget about green; go brown!

The summer has been brutal where I live. But with dollars at stake, I am becoming very environmentally responsible. So what if even the goats pass by my yard?

Five tips to setting effective financial goals for 2016

Five tips to setting effective financial goals for 2016

As the new year approaches, many will be analyzing the last year by assessing their lifestyles and committing to the standard personal resolutions: lose weight, exercise more, sleep more, reduce screen time, etc.

What many may leave off their list is something that may also have a major impact on their lives — a solid financial goal. Now is the perfect time to reflect on past spending and saving habits and to set realistic, effective money goals for the coming year. Here are a few tips to help you create successful personal finance goals for 2016.

1) Review 2015 spending habits

An effective method for setting your 2016 goals is to reflect on ​what you spent your money on this year. Derek Coburn, a partner at Washington Financial Group, recommends taking a look at your 2015 credit card and bank statements and identifying the three purchases that you feel best about and the three purchases that you regret most. According to Coburn, this exercise helps people make better decisions on future purchases and set more realistic financial goals. Coburn adds: “In hindsight, hardly anyone ever feels good about the money they spent on material goods and physical things. They almost always feel good about the experiences they purchased.”

2) Create a 2016 personal budget

Once you have reviewed your 2015 spending habits, creating your budget for next year will be easier. According to financial adviser Tahir Johnson, “Many people avoid creating a budget because they think its only purpose is to limit spending, but that is not the case. By keeping tabs on your income and expenses (both essential and discretionary), you not only gain a better understanding of where your money is going but it also helps you to formulate a plan on how you can save and invest in the future.”

3) Stay organized

One of the most effective ways to maintain your personal finance goals is to stay on top of your expenses, spending and taxes throughout the year. Organize your expenses by using apps such as Mint ​and Level Money or more traditional tools such as Excel or a spending notebook to create budgets, manage money and pay bills all in one place. For any income you plan to earn next year from a side job, such as freelance consulting, driving an Uber or hosting on Airbnb, set aside a portion to meet your income tax obligations. Apps such as Hurdlr automatically manage this for you and help minimize these monetary commitments.

4) Create a vision

Developing an annual budget and tracking monthly expenses is only half of your financial equation. You also want to look at the larger picture and create financial goals that are in line with your long-term vision. Creating a financial vision board is an easy, effective method to lay out your short-term priorities and uncover your larger financial goals.

All you need is a poster board, scissors, magazines and glue. You could cut out phrases and pictures that represent your short- and long-term financial goals (i.e. pictures of a new house or your dream vacation destination, phrases such as “no debt,” specific numbers that you are trying to reach) and paste these images onto your poster board. After you have created your vision board, you may need to alter your budget to save toward your long-term vision, or you may find the extra motivation to stick to your budget in order to achieve that long-term financial dream.

5) Set specific milestones

Many of us will make lofty goals for the new year, but few of us will actually stick to them as the year progresses. It is not enough to create a budget or a financial vision — you have to follow it through! Set goals for specific milestones throughout the year so that you have a way to measure how you are progressing against your plan.

For example, if your goal is to build up an emergency fund, decide how much money you want to have saved by three, six and nine months. Then check in at each of these points in time to confirm that you have hit your target savings and adjust accordingly to reach your ultimate goal. Use the above tips to set your financial goals, write these goals down, and refer to these goals and your vision board often throughout the year.

Beware of price hikes at supermarket

Beware of price hikes at supermarket

A surprise jump in wholesale food prices in September is bad news for producers and retailers, but you won’t feel it in your wallet. Yet.

Producer prices — the amount farmers receive for their goods from manufacturers — rose by 6.9% compared to September 2010 or 0.8% on the month, the U.S. Labor Department said Tuesday. Wholesale prices — those paid by retailers — increased by an annual 2.5%; the biggest rise since June 2009. Worse, higher food prices aren’t limited to a particular food group. U.S. wholesale prices rose across the board due to the rise in energy costs and commodities like grain and coffee. Fresh and dry vegetable prices soared by 10% on the year last month; beef and veal prices rose by 5.4%.

Analysts say supermarkets will start passing price increases onto consumers slowly and quietly. “Most retailers have been reluctant to raise prices up until now and have eaten up the higher raw material costs,” says Michael Keara, an equity analyst for Morningstar. “But they will start.” Although food commodity prices have been climbing steadily this year, grocery stores have held off because they don’t want to scare price-sensitive customers. However, expect to see supermarket prices edging up in six to nine months, he says.

Consumers watching their wallets may also want to keep a closer eye on package sizes for their favorite foods. Keara says the jumps in wholesale and producer costs are so high that manufacturers are likely to cut quantity as a way of disguising price hikes. In other words, start making a note of how many ounces you get in your six-pack of your favorite granola bars. “They don’t want to shock consumers,” he says, noting that increases over 5% hurts sales volumes.

Shopping experts are already advising consumers to stock up, track expiration dates and freeze perishables. “Shoppers are shopping less frequently, twice per month,” says Nick Dellis, a spokesman for online grocery list site Ziplist.com. Stephanie Nelson, founder of CouponMom.com, which advises consumers on the best coupon-clipping strategies and deals, suggests buying chicken at the end of its two-week sale cycle and freezes it. Buying chicken at $2 a pound or half price saves her $450 a year.

Read more smart shopping tips >>

8 phone calls that will save you cash

8 phone calls that will save you cash

Get the best negotiator in your house to pick up the phone and lower some of your bills.

Shopping online is undoubtedly convenient, but there are times when picking up the phone can save you some cash or, at the very least, score you a nice upgrade.

“Having that human element really helps,” says Laura Oliver, a deal expert who has scored plenty of deals just by making a phone call. “If you call and it’s not working, hang up and call right back,” she advises. “The phone lines are on a queue. You’ve got 15 to 20 other people you can try.”

She also points out it doesn’t have to be you who does the haggling for a better price. “You probably have someone in your house that’s your best negotiator,” Oliver says, advising consumers to let that person make the call.

Negotiate a Lower Credit Card APR

For people with average-to-good credit, the annual percentage rates associated with a credit card aren’t necessarily set in stone.

“Call your credit card company and say “Card X just sent me an offer for a card with 0% APR for a year and then a fixed rate of only 12%, which is much lower than the rate I’m currently paying you,” says Derrick Kinney, a financial adviser who specializes in helping families.

He says you should ask your current issuer if they can match the competing rate and, if not, it makes financial switch to transfer your current balance to take advantage of their competitor’s better offer.

“The fear of losing your business will usually make them match the offer,” Kinney says.

Read more “8 phone calls that will save you cash”

U.S. downgrade and your credit cards

U.S. downgrade and your credit cards

Interest rates on cards are likely to be affected much differently than those on consumer loans.

Stocks have kept investors on edge during the past week as the Dow swings from boom to bust. For consumers, it’s a good time to step away from the market mayhem to survey the damage and potential threats to their finances.

One area that is getting short shrift — but shouldn’t — is the impact the Standard & Poor’s debt downgrade may have on credit card rates.

First, some background. The downgrade on U.S. Treasury bonds that was issued by ratings agency Standard & Poor’s — from AAA to AA+ — was widely viewed as a wake-up call to the U.S government and its “drunken sailor” approach to spending (though that might actually be an insult to drunken sailors).

While the Fed says it will keep rates near zero, many economists expect major consumer interest rate categories to eventually rise because of the downgrade, including things like mortgage, auto and student rate loans.

It’s no big secret why. Any consumer with a low credit rating knows that he or she is a bigger credit risk to lenders, and thus must pay higher interest rates for creditors to accept that risk and loan the consumer money.

It’s the same thing with Standard & Poor’s and the U.S. government. A lower credit rating means that global creditors face a higher risk of default when lending money to Uncle Sam. To borrow money — usually through the sale of U.S. Treasuries in the bond market — the U.S. government will have to offer higher rates of return to investors.

But here’s an interesting point. Even if Treasury yields do recover and grow again, your credit card’s interest rates may not follow the script. Why? Let’s look at three reasons:

Credit card rates aren’t tied to Treasury rates. Instead, credit card interest rates are tied to the Federal Reserve’s prime interest rate, which still remains historically low, and should continue along that path. Federal Reserve chairman Ben Bernanke has made it clear the Fed’s rate policy is to keep those rates down, despite what S&P says. That should help keep card rates manageable for consumers.

The CARD Act has a built-in safety net. Government can do something right once in a while. Take the credit card legislation passed in 2009: Inside the CARD Act is a provision that limits how much card issuers can raise rates. The reforms are limited to “current account balances,” meaning card companies can still raise rates on new charges, so be careful of new spending going into the last four-and-a-half months of 2011. But any charges you’ve already made are tied to current rates, which still remain relatively stable. A quick glance at BankingMyWay’s credit card rate search tool shows card interest rates stable between 11% and 20%, with the average credit card rate around 14%.

Standard & Poor’s doesn’t speak for everyone. Right now, S&P is out on its own with its debt downgrade. The other major U.S. credit agencies — Moody’s and Fitch ratings — didn’t go along. And until, or even if they ever do, don’t expect your credit card interest rates to rise significantly.

So call it a cloud with a silver lining. Yes, the stock market is taking a huge hit, but at least your credit card rate isn’t.

How to read your credit report

How to read your credit report

The x-ray of your credit health can be dense, so just look for these six items.

You have one shot of your credit reports. And now? As you’ve probably heard about now, you are entitled to free copies of your credit reports. Federal law gives you the right to request your credit reports from three, one from each of the three major credit reporting agencies each year.

You can get them at a time or throughout the year. Personal finance gurus often recommend taking a report every four months that you regularly monitor your records. Anyway, checking your credit reports is a smart move considering that the information in your credit report determines your credit score.

But once you get the report, what do you do with it? How about giving the treatment of six minutes? Then you definitely want to read the full report in detail, a quick check on a handful of indicators can give you an instant assessment of how good – or bad – your credit is right now.

Here are six markers that can provide an X-ray of your credit health.

Late payments

Delinquencies are “enormous influence” on the credit score, said Stephen Brobeck, executive director of the Consumer Federation of America. In fact, they represent 35 percent of your FICO score.

If you see the ratings invoices were paid 30, 60, 90 or 120 end, “it is very damaging” to your credit, he said.

The other factor is important here: the timeline. How was the end of the payment, and how long you make this mistake?

Following payment, the more it hurts your credit, says Evan Hendricks, author of “Credit scores and credit reports. How the system actually works, that you can do”

But the more time that has elapsed since you made a late payment, the less it will affect your credit, he said.

Limit high ratios of debt to credit

Credit scores typically look at your debt-ratio limit credit or “use” in two ways: They compare the balance on a revolving account to your credit available from that lender. For example, if you have a credit card with a balance of $ 1,000 and a $ 5,000 credit limit, this ratio would be 20 percent.

Scoring formulas also look at your debt-credit limit ratio is a second way: the calculation of the total of all your debts on the accounts revolving lines of credit against your total of these accounts.

So if you have four credit cards each with a credit line of $ 5,000 ($ 20,000 in credit), and you have a balance of $ 1,000 on two of them and nothing on the other two ($ 2,000 debt), this ratio would be 10 percent.

“In an ideal world, you want to have (ratios) of less than 10 percent,” said Hendricks. “But certainly you want to keep them under 40 percent. There is no magic.”

But if you use a balance of $ 2,000 to $ 3,000 with a card that has a $ 5,000 limit, “which will really hurt your score,” said Brobeck. “And what is worse, running up balances on several cards.”

Collection activity

In most cases, if you have an account that went to collections or have been written off as bad debt, you know about this, said Rhonda Bailey, credit counselor and manager of the review of credit report for Credit Counseling Non-profit Arkansas. But not always.

“There are a few cases, as an old utility bill after you have moved, (where) the collection agency and not find (the consumer) has forgotten about it,” she said. “I see that sometimes.”

If you find an article that is not yours, you can dispute and have removed from your report.

If the item is yours, you have decisions to make, says Bailey. Can you afford?

It’s a good idea to check the law of your state of limitations, which is the period of time creditors have to sue you over a debt. Your state attorney general’s office can give you that time, she said.

Separate this time, the question may remain on your credit report for seven years. Plus it was on your report, unless it affects your score.

Judgments, liens, bankruptcies

Hopefully you know if you have had major financial difficulties that involved judgments, liens or bankruptcies. However, if someone else uses – and looting – your financial identity, a notation on your credit report could be your first clue.

Same if a collector less-than-scrupulous you marked with another debt or taken action against you without proper notification.

When you get this report, the digitization of “public records” section, explains Michelle Doshi, the editor of publications for the Consumers’ Association Credit Union National. “If there are liens or bankruptcies, it is a good way to check. ”

Active accounts you have closed – Or never opened

You close a store card after moving. Or you finally had time to ask your daughter to close the card account you have co-signed for her when she was in college.

The next time you pull your credit report, if enough time has passed, we must show that these accounts are closed, said Doshi.

Looking back on your credit report “is a way to verify that you have closed and their dates are correct,” she said. If this should be a closed account on your credit report open lists, it’s a good time to contact the issuer and find out why.

Information drive

Another thing to watch is the accounts you do not remember opening the first place. The absence of a mix-up, which could be an “indication of identity theft,” says Doshi.

Your credit report will tell you who else has looked at my credit report. Called “investigations” into the credit-speak, they are of two types.

Applications are hard when you actually asked for new funding – has completed an application, signed documents, etc. – and asked a lender to verify your story. When you get a hard inquiry, your credit can take a slight decline. Hard inquires could affect your score for one year, but you will see on your report for two years.

Soft inquiries are what the credit bureaus put on your report when someone looks at your credit, but you did not request new loans. If you pull your own credit report, which is a soft inquiry. You’ll also see if a potential lender pulls your credit for marketing purposes. Applications software do not affect your score.

Applications are disks “such a small part of your credit score,” said Kelly Rogers, Chief Development Officer of the Consumer Credit Counseling Service a non-profit Orange County, California, and assistant professor at the University Chapman. “But that’s a great way to see if someone has used your information.”