The Truth About Rewards Credit Cards

Do rewards credit cards offer any real rewards? If you carry a balance, you are probably getting ripped off because you're paying out more in interest than you get back in rewards.

This article on Money offers some tips and advice on rewards credit cards

Changes to FICO Credit Scoring System

From the Star Telegram:
In September, the FICO credit-scoring system is set to undergo a major overhaul. Fair Isaac Corp., the Minneapolis company that creates the formula used to calculate the score, is downplaying the change, saying that it won't have much of an effect.

But 40 of the top 50 financial institutions in the country rely on FICO scores to determine whether to approve a loan and what rate to charge. Retailers, landlords, insurance companies, employers and utilities also use it to decide how to do business with you -- or whether they should.

So any change in the way that scores are decided affects millions.

Because Fair Isaac doesn't want rivals to copy its formula, it isn't giving out too many details about the changes, but spokesman Chris Watts did say this: Fair Isaac divides the population into 10 segments based on credit history and applies a different formula to each. Eight segments include people with good credit, and two are for people with serious problems. Under the new system, the population will be divided into 12 segments: eight for people with good credit and four for people with bad credit. That could result in a slight change -- up or down -- in many scores.

Read Full Article

Getting your credit report isn't easy

The way the system is supposed to work for getting a free credit report is not how it really works.

Yes, there is only one official Web site — annualcreditreport.com — and it provides a free copy of your credit report once every 12 months from each of three nationwide credit bureaus: Equifax, Experian and TransUnion.

But misspell that Web address or, worse, guess at its name on a Web search engine and you will wind up at sites offering a whole bunch of "free" stuff from credit scores to credit monitoring that ain't free.

Full article from the Houston Chronicle

Credit Report Forums Closed Indefinitely

I just realized that our forum was hacked a while ago and a bunch of junk threads were posted. I was getting so much dang spam in that forum and so little actual visitor participation, I figured it was for the best to just delete the forum and move on with life without it. I'm sure no one will miss it unless you were looking for viagra or breast enlargement or one of the other great products being advertised in our informational forums. The truth is, it took me a while to even realize that the forum was hacked because I quit monitoring the forums. So, I doubt anyone will really miss the old forum.

I still think it's a good idea to have a forum or similar venue to discuss credit-related issues, but maybe now's not the time and phpbb isn't the way to do it.

Closing Your Credit Card Account Can Hurt Your Credit Score

I was just reading about how Closing Your Credit Card Account Can Hurt Your Credit Score on the About.com credit blog. I've heard this before--that closing your accounts can negatively affect your credit score due to change in length of credit history and ratio of used to unused credit. But it can also be good for your credit score to cancel cards that you no longer use. So the idea is it could be good or it could be bad.

My opinion is that you shouldn't beat yourself up over this issue. If you need a good credit score because you're getting ready to buy a house and can't pay for it with cash (who can), it might be worth hanging onto the account (not using it, though) for a little while. But if you don't have any immediate need for credit, forget about it and just cancel the stupid thing. You'll be better off financially if you just pay off all your credit cards and start saving and investing your money anyway. If you've got money in the bank, who cares what your credit score is? You don't need credit to buy stuff with cash. Our economy works largely on the whole credit scoring system, but in a lot of ways we're just playing along with a stupid game. If you've got no debt and money in the bank, you can get a loan for a home, and get a good interest rate. You might have to do it the "old fashioned" way--working with an actual human being, but you can get a loan. Plus, you'll sleep a lot easier at night not having to worry so much about your credit score. Just save your money and live your life.

Protect Against Identity Theft Over the Holidays

My wife keeps reminding me that it's that time of year when we do a LOT of shopping. As you're out there flashing the credit, you've got more to worry about than your own personal will power to not overspend beyond what you can afford. There are identity thieves lurking out there looking for opportunitites to steal your credit cards, and your identity.

From a CBS News report:
Many consumers are already warming up their credit cards ahead of Friday's unofficial launch of the holiday shopping season. Are you being careful enough with your credit AND with your privacy? Ray Hennessey, editor of SmartMoney.com, offers some help.

Following Black Friday, many shoppers hit the internet for Cyber Monday - the first Monday after Thanksgiving - and complete some of their holiday shopping online from work. "It's the more dangerous time because your using your credit card and your using the internet," Hennessey says. "It's a more secure world than a few years ago, but there are some things you can do to make sure it's even more secure."

Hennessey recommends only using websites of merchants you know and trust. These are the sites that have the more secure sites. And while you are visiting these larger sites, consolidate your purchases. "If you're going to go to a place like Amazon, do as much as your shopping in one thing so you are just dealing with one charge on your bill instead of multiple charges," he suggests. And immediately check receipts against your bank statements. The quicker you find problems, the sooner they can be fixed.

Full article from CBS News

New York law lets consumers freeze credit data

Nov. 1 marked the enactment of a new state law allowing New Yorkers the option of 'freezing' their credit information, effectively keeping identity theft thieves out and valuable credit information secure.

The New York State Security Freeze Law allows any state consumer to write to the three major agencies - TransUnion, Equifax and Experian - and request that their credit records be blocked from any inquiries.

The credit firms however, believe the law makes it very difficult for consumers to get credit when they need it, and suggested better, easy-to-use and free options, such as placing a fraud alert on their credit file, said Jennifer Costello, a spokesman from Atlanta-based Equifax.

While file freezing may be appropriate for some consumers, it can pose

inconveniences and unintended consequences for credit active Americans,” Equifax said in a statement sent to this publication. “A security freeze requires a consumer to plan ahead as it limits credit grantors and other businesses access to their credit file to make offers of credit, employment, etc.

Full Article from DMNews.com

New York law lets consumers freeze credit data

Nov. 1 marked the enactment of a new state law allowing New Yorkers the option of 'freezing' their credit information, effectively keeping identity theft thieves out and valuable credit information secure.

The New York State Security Freeze Law allows any state consumer to write to the three major agencies - TransUnion, Equifax and Experian - and request that their credit records be blocked from any inquiries.

The credit firms however, believe the law makes it very difficult for consumers to get credit when they need it, and suggested better, easy-to-use and free options, such as placing a fraud alert on their credit file, said Jennifer Costello, a spokesman from Atlanta-based Equifax.

While file freezing may be appropriate for some consumers, it can pose

inconveniences and unintended consequences for credit active Americans,” Equifax said in a statement sent to this publication. “A security freeze requires a consumer to plan ahead as it limits credit grantors and other businesses access to their credit file to make offers of credit, employment, etc.

Full Article from DMNews.com

Tips for Preventing Identity Theft

From WSBTV.com News:

• Check your credit reports at least once a year from all three credit reporting agencies.
  
• When possible, do not carry your social security card with you.
  
• Don’t put your social security number or driver’s license number on your checks.
  
• Don’t ever give your social security number to anyone unless they have a legitimate reason for needing it.