First off, you want to use the free service at AnnualCreditReport.com. (Yes, that is the right link. No, I don’t make any money if you click it.)

During my credit counseling sessions we advise our clients not to use TransUnion because they force you to sign up and create an account. Because we are in a quasi-public area, we only walk clients through the Experian or Equifax versions and then close the browser to protect their privacy and then we tell clients to check the other versions on their own. Be forewarned!

The other day, Doctor S from FinanceYourLife asked me (via Twitter) how I checked my credit score and how much it cost.

I use Equifax because a long time ago I signed up for their subscription service for checking my credit. However, I’m not that happy with it. I get weird service expiration messages all the time and a few times I think was double charged on some months. It’s kind of a mess that only ended when I did not tell them my credit card number when it expired. Instead, I now pay as I go on a different credit card for $10.95 for each credit report with score, aka Score Power.

I have been monitoring my credit lately to see if I wanted to make the move for a new car loan and generally try to improve my score as much as I can with debt repayment and understand what it’s showing from a real world perspective versus the theory that I teach as a volunteer.

In May 2009, my score was 705, after many months of being only 689 (as of May 2008). Recently I had to pull a copy of my credit report and in July 2009 it said my score was now 717. I compared my reports side-by-side and clearly the score improvement all comes from diligently paying down my debts (my mortgage and credit cards).

However the thing that really gets my goat is the age of my credit accounts. I still have the Amex I got my freshman or sophomore year of college over 15 years ago, and yet my accounts are still considered very young. This is bizarre as I signed my first educational loan when I was 16 for private school prior to my first credit card. So does this mean I should have opened a credit card in high school and I’d have another 20 points to my score now? I hope not because I don’t think I could have handled the responsibility back then. Exactly how old does the oldest account have to be? Wait for it… “FICO High Achievers opened their oldest account 19 years ago, on average.” 19 years?! I’m not even 40 yet!

The average age of my accounts is 10 years old with my most recent credit account being opened almost 3 years ago. But I should be lumped into the highest category since “Most FICO High Achievers have an average age of accounts between 6 and 12 years.” What gives?

Clearly the one thing dragging me down is an errant emergency room bill that never got to me till it went to collections 4 years ago. But even so, you can have a blemish on your credit report like that, and still have a great credit score. The main thing is steady on-time payments for 2+ years, don’t open a lot of credit accounts and use the credit you do have in a responsible manner.

I probably won’t be checking my scores again till Christmas since I don’t really need it. It’s a little too expensive to check it every 2 months just for my own ego/progress measurement’s sake.

P.S. – BTW, Doctor S has a great blog for the under-30 audience. He’s just finished his first year of blogging and he runs a Feedburner feed to which you can subscribe.

Checking My Credit Report is a post from: Mapgirl's Fiscal Challenge

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When my sibling asked me for a bridge loan last week, the only way for me to help was to take out a balance transfer for a low APR. But then my sibling emails me and lets me know it’s not needed anymore.

Well I’m now wigging out about a large balance transfer request in process. I was borrowing a substantial amount because I had no idea how much to give my family (i.e. what was needed). It was definitely going to effect my credit score by changing my utilization substantially. It costs 3% for a balance transfer fee and the balance transfer check was not yet here. I wasn’t sure what to do, but I decide to call my credit card company and cancel it if possible.

That was all it took was to cancel the check (which had not yet arrived) and that was it. I am supposed to destroy the check and I’ll see a change in my credit card balances in a few days. Nothing crazy at all.

When I asked about the 3% fee, the CSR told me that the transfer charge is not applied until the check is cashed. So flushing the offer costs me nothing. We’ll see what this does to my credit report in a few weeks. I am not certain that my balances will have an accurate high water mark on my report at the end of June. But it should by the end of July.

Flushing a Balance Transfer Offer is a post from: Mapgirl's Fiscal Challenge

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Well whaddya know. Bank of America cut my credit limit from $13+K to $7.5K.

It took me 5 months to notice because I carry zero balance on that card so I don’t get a paper statement for it. I needed to change the address on the account when I realized that the limit was lower. It’s not effecting my credit score which is holding steady at 700+ with Equifax since December 2008.

My situation is pretty much the same as SingleMa’s. My credit score hasn’t been impacted by the change, don’t need all the credit I have on credit cards, and (once I pay off my balance) I only have a mortgage to pay.

Que sera, sera.

For a flash yesterday afternoon, I did think I was a bad person for not paying attention to this aspect of my finances, but I realized that was silly. Zero balance of any credit limit is 0% utilization.

I pay attention to what needs it, and a zero balance card is not what needs it now. I’m busy hoarding cash for a condo renovation and that’s all that’s important now.

Credit Limit Cut! is a post from: Mapgirl's Fiscal Challenge

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My friend, Dean, has a website on how to fix your own credit. It’s pretty detailed because it’s what he did himself, for free, to fix his own credit. No joke, it’s the real thing. It’s not flashy and he’s not out to make tons of money by having the site. He has a real day job and a real life. The site has minimal ads. He just wanted to get the information out there.

The advice he gives is similar to the advice I give when I’m teaching a financial management course, and it is very effective. If your score is under 700, it’s worth doing. However, it can’t hurt if your score is a 750 to clean up the bad items on your credit report just to nudge it higher.

It’s a good time to do this since you can get a free report online and send out the faxes immediately while you have time off before the new year. I’m about due to check mine out and will probably spend a hour on the first few days of January to do it. (The link is to the free website for credit reports, not an ad or affiliate.)

My advice is to do everything via fax so you only have to write things once and can put ‘RESEND’ at the top if you need to send it again. It kind of perks up their attention and you don’t have to labor with mailing stuff out, etc. Keep a copy of the transmission records and be detailed about things.

An old post what is a worthwhile reads on the subject:
Kiplinger’s FAQ article on boosting credit scores

Recommended Free DIY Credit Fixing Website is a post from: Mapgirl's Fiscal Challenge

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Earlier this year I checked my credit report and score with one of the big three reporting bureaus. My score at the time was a 696. I recently checked it again and it’s now 702. I have broken the 700 barrier!

The primary thing pulling my score down was a medical bill I never received. The doctor’s office never attempted a good faith phone call to collect the debt. I had no idea I was being billed and it’s not my fault they got the address wrong. But the credit bureaus do not care. The collection was recorded. It’s been 3 years since the collection was recorded, and eventually it will drop off. But with diligent on-time payments, you can get over the black mark and still have a good score to qualify you for lower rates.

The other thing that drags my score down is my credit card debt. I have a high balance on one card, which evens out to an overall low utilization over the 3-4 credit cards I have, but that’s one reason why I’m so motivated to bring my debt down. In 1 or 2 more years I want to refinance my 7/1 ARM mortgage and so I’d like to push my credit score up to a 720 or 725.

If you have not yet checked your credit report this year, you still have time for a free one. Annualcreditreport.com is the FREE site where you can get all three reports at once.

And if you don’t do it now, you can always make it a New Year’s Resolution for 2009. (Yes! It’s that time of year already!)

Credit Score Checkup is a post from: Mapgirl's Fiscal Challenge

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Alrighty, with this fabulous new credit limit increase on one of my cards, I decided to shop around a bit. There’s a few things I’ve been doing lately and observations I wanted to share.

1. I have a few other credit cards, but I never charge them up. Lately I’ve been spreading things around to get rewards points/miles/what have you. I find that this is really positively one of the most annoying things ever. I prefer to ring up one card and pay off one card. I’m not going to spread stuff around again if I can help it. It’s just a dumb idea. Even though I keep a watchful eye on my balances with Quicken, I feel out of control with balances on more than 2 cards at once.

2. I started looking closely at the Balance Transfer offers out there on my cards. One card offered two offers, each with a 3% transaction fee capped at $99. Offer A was 0% till June 2009, then reverting back to standard APR of 10.99%. Offer B was 2.99% till January 2010. I did a little math on my balances and this is what I figured out:

-I have about $11K at 6.03% APR.
-It will take me about 8 months to pay that off, till about June 2009.
-I also have about $5K at 7.18% APR which is old consumer debt I put on my HELOC.
-Under Offer A, I’d be paying roughly $99 in interest and fees till June 2009.
-Under Offer B, I’d be paying roughly $437 in interest and fees till January 2010.
-But in transferring money, I can pay the minimum on the $11K balance and really attack the 7.18% APR debt first and clear that off my in 5 months.
-Transferring from one credit card to the higher limit card means I go from 87% utilization to 58% utilization, all the faster to get under the 35% utilization and improve my score.

So I figured out that it’s best for me to do these things:
-Transfer $11K to Offer B on my credit card with the high limit.
-Pay down my old consumer debt at 7.18% APR on my HELOC.
-Once I’m done with the old debt at 7.18%, then attack my 2.99% APR transferred balance.

But in actuality, I hate this plan. I want to get rid of the credit card debt first and foremost. So here’s the new goal to be carried into 2009.

Goal
Specific-Pay off transferred credit card balance
Measurable-approximately $11K
Attainable-$800 a month
Realistic-Yes, that’s about what I pay every month right now for debt servicing.
Timely-By January 2010

Big Credit Card Debt Moves is a post from: Mapgirl's Fiscal Challenge

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First off, I don’t give out financial advice because I’m not an advisor. If you need that, ask someone who is certified and pledges to do business ethically. I’m not that person. I’m here to *entertain* you.

That being said, someone asked this question:

I did recently check my credit report and found that I have five credit cards open that I have not or never used in several years. Does keeping them open, albeit unused, help or hurt my credit score? Would you suggest that I close the accounts if I never intend to use them?

I think you’re best off reading about FICO or Vantage credit scoring models. There is some benefit to having revolving credit accounts open for a long time. Now the question is do you have too many open that hurts your score in another way? That’s up to you to decide. I mean you could go ahead and close them but that could also lower your score in the short-term, but in the long-term that could be beneficial if someone is looking at your ability to get in revolving debt overnight and evaluating you as a credit risk in 2 years down the road.

Does monitoring these unused accounts put an undue burden on you? Closing them could ease your mind.

A strategy you might want to try is to get a credit score report and then close one account and get your credit score again afterwards. Because so much goes into scoring though, so you’ll have to control the experiment by making sure your payments are on time during that time period and watch to see if your balances cross the 35% of available credit on that account. (Up or down. Either one will trigger a score change.)

The biggest score impacting item is on-time payment. Just make sure that you vigilantly pay on-time for a minimum of 24 months. Small open accounts may represent only annoyance and possible security risk without a lot of other score downsides, so it’s up to you if you want to keep them open.

Reader Question on Unused Credit Accounts is a post from: Mapgirl's Fiscal Challenge

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SMART: Specific, Measurable, Achievable, Relevant, Time-Bound

Goal #1
Specific – Contribute to my 401k plan
Measurable – X% of my total salary
Achievable – With each paycheck
Relevant – Yes. Because it will help my retirement funds grow
Time-Bound – All of 2008

I will not get a corporate match for my first 12 months, but my new company will match 100% of the first Y% of my salary, so there are some extra benefits to doing this, but I won’t see them till 2009. That’s fine. Because of other goals, X=Y, i.e. I’m only putting in the minimum to get the match.

Goal #2
Specific – Reduce my credit card debt
Measurable – By 50% or $9,137 (rounded up to $10K)
Achievable – Monthly payments of $762
Relevant – Yes. Because it will help my net worth grow faster
Time-Bound – December 31, 2008

My NCN Network chart/Save-O-Meter number is $18,273 and I have not made much progress at all. In fact, I’m probably going over that when I finish tallying my December net worth numbers. What really burns me is that Tricia has paid off more debt that I have. I’m really proud of her, but dammit. I gotta get moving!

Goal #3
Specific – Reduce my credit card debt on my highest balance card ~$10K
Measurable – By 50%
Achievable – ~$450 a month
Relevant – Yes. Because it’s killing my credit score
Time-Bound – December 31, 2008

This leaves about $312 per month for my other credit cards. Though they have higher interest rates, the balance to available credit ratios are so low they aren’t detrimental to my credit score. I’m not buying anything any time soon, bu I would like to push my score higher for the heck of it. There is an implied goal here of breaking a FICO score of 720.

2008 is going to be very simple. Three goals and three goals only. I am focused on saving for retirement and reducing my credit card debt. That is all. Once I get going on these three things, I feel my larger goal of having nothing but my mortgage will come to me more easily in 2009.

2008 Goals: SMART Style! is a post from: Mapgirl's Fiscal Challenge

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First, the update. I forgot to tell you. I gave away the pet birdie. I found someone off of Craigslist who is really going to enjoy having her. She now lives in a house full of kids and pets. I admit, the stray kitten they found looked a little in need of veterinary care, but there were other birds who will keep Papagena company. I just couldn’t stand keeping her when I couldn’t spend time with her. She really needed constant company.

Now, onto the juicy confession. Remember when I had a boo-boo with my credit card payment in May? Well, I’ve been avoiding telling you that the credit card decided to put me into the universal default interest rate of 32.0%. Luckily it didn’t trigger a rate change on my other cards. I was damned lucky on that.

But I did decide to balance transfer off most of what was on the card to my HELOC, going from 32% to 10.38%. The interest savings was too great to ignore. I still use the card because there are some recurring charges on it (EZ Pass fees), but I pay it off religiously and in full now. (Side note on my net worth data, I do not include the transferred amount into my mortgage line item. I have left it on the credit card line.)

When I first realized the rate jumped, I re-read the card agreement and found out that the 32% rate was going to last 6 months, i.e. till November. I was all prepared to wait it out and keep paying things on time and in full, without carrying a balance. However, I decided that since 4 months have passed without an incident, I would call them anyway. I wanted to see if I could also get a really low teaser rate balance transfer later as well. Because 10.38% is ok, but not great.

I called them this week and they lowered my rate back down to 13.74%. It was very easy. I also inquired about balance transferring but they told me to call back in a few days. We’ll see about that. I’m not sure that I really want to do the transfer. I just liked the idea that I was doing SOMETHING to improve my situation rather than nothing.

The takeaway for you:
Even if you’ve triggered off a default interest rate on your card, you don’t have to wait a full six months to get your rate lowered back down. Call them after a few months of on-time payments and ask if they will lower them again. It can’t hurt you to ask. There is only the upside here of a possible yes that lowers your rate again.

Final note: I paid to check my credit score the other night and it’s a 696. The main thing is that I need to lower my utilization which is why I was interested in a balance transfer. I have 3 cards, and one is at 80% utilization. I figured if I started spreading that onto two cards, the score would lift. But I have no major purchases coming up in the next 2-4 years so I don’t really need to do this at all. I just need to get all of it paid down.

True Confession About My Credit Card & Update is a post from: Mapgirl's Fiscal Challenge

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I love the Washington City Paper. I was at the Yarn Harlot book signing event last night. As I waited for my friends to get their books signed, and deliver her a beer, I flipped through the paper and found a lovely ad on page 49.

Financial and Credit Literacy Day
Hosted by the Washington Area Community Investment Fund

Saturday, September 29th
9am-4pm
Kellogg Conference Hotel
Galludet University
800 Florida Avenue, NE
Washington, DC

RSVP: 202-529-5505

FREE ADMISSION and FREE PARKING!!!

The financial literacy seminar/workshop list looks very good. (link goes direct to an Adobe PDF file) There are seminars on targeted to teens/youth and women. Topics include Small Business Management (including federal contracting), Homeownership, Selecting a Mortgage, Managing Foreclosure, Credit Scores, Budgeting and Consumer Rights.

The ad says, “Bankers and housing counselors available all day.”

I do not know very much about this organization, but they do have an impressive list of sponsors. They were formed out of Arlington with the help of the local Catholic diocese, which if you don’t know, has one of the craziest liberal parishes in the US, St. Charles Borromeo. I actually have worshiped there because one of my closest friends used to attend. If you know their ministry, they’re very into social justice, often to the chagrin of the archbishop. I mention this because St. Charles is very active in low income housing initiatives in Arlington County and I could definitely see them supporting an organization like this.

It’s technically a non-profit loan fund, with 501(c)(3) status. I’m going to look into investing in it.

DC EVENT: Financial and Credit Literacy Day is a post from: Mapgirl's Fiscal Challenge

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Yes indeedy. I did it.

I am cheesed off with Wachovia for charging me to download from within Quicken, but not so cheesed off as to kill that account. I really do feel more comfortable with a brick and mortar bank locally. So this means my Philadelphia based checking bank is going the way of the dinosaur. I feel so bad because I opened that account in 2003 at the bank branch I used to go when I was a little kid with my piggy bank. I still think of it as my bank, even today, though I don’t even take cash out of their ATM’s when I go home. Screw the sentimentality, let’s talk brass tacks on why I chose ING.

1) I already have a relationship with them: I really didn’t want to go through the annoyance of learning a new GUI with Virtual Bank or NetBank. It was extremely easy for me as an existing account holder to click a few clicks and open a checking account.

2) It’s paying 4.00% APY: My old checking account paid no interest at all and was free with direct deposit. Seems to me, for the $1000+ deposits I would make there for my fixed expenses, I might as well earn some interest on the float while the funds were still in the account.

3) It uses Quicken! Sounds crazy, since all banks pretty much have an interface with Quicken. But for some reason my old bank in PA was really behind the times on this and did not integrate well with it. I had to get crazy stuff set up by calling a rep, etc. It was phenomenally stupid, so I didn’t bother with transaction download. Because this is a low-traffic account for fixed expenses. I could pretty much balance it once or twice a month with Quicken’s reconcile feature and it would work just fine.

4) My girlfriend did it first: One of my local friends was asking me about it. I told her I really didn’t know much about it, but then she decided to do it because of Reason #2. She seems pretty happy with it and has no serious complaints other than the fact the ATM card hasn’t arrived yet. But for me, I won’t even use the ATM card since I have my local brick-and-mortar bank which is convenient enough to home and office.

5) I think there is a hard credit pull: There is an overdraft protection feature that offers you X dollars of credit. I am pretty certain this means they’ve done a hard credit inquiry. Yes, I realize this possibility may drop my credit score, but I don’t really care since I haven’t opened a credit account since June 2006 and have no plans to open another for any reason whatsoever in the next 2 years. EDIT: Per Reader Dave, there is no hard credit pull, via the ING FAQ. THANKS DAVE!!

I haven’t done anything yet with it. I am in the process of transferring over my direct deposit from work. I did set up some of my regular outgoing expenses and that was fairly easy. I don’t like going entirely paperless, but I don’t think this transition will kill me, and perhaps it will help me tame “the paper tiger” around the house. I keep too much paper crap and it’s bugging me. I actually spent some time de-cluttering the mess on my desk and I am happier as I write this post.

PS – I just noticed that the DST change has effected the posting of my posts since March 11th. I just added an hour to the time on this post to reflect the accurate time.

I Pulled the Trigger and Opened an ING Checking Account is a post from: Mapgirl's Fiscal Challenge

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Credit Bloggers has a good article about how late payments effect your credit score. It points to an article at Credit.com.

Nicole is spot on about college degrees. A nice examination of ‘good debt’. I am not convinced college tuition debt, nor the whole experience of college is for everyone.

Citibank Driver’s credit card analysis by Jonathan. I’m seriously thinking about it since I rack up the miles. Of course, I do get a lot of free gas right now…

Madame X amazes me again with her will & determination to TCB on her own. Try as I might, I still get little things here and there from my folks (see the above regarding free gas). I am still holding off on my Bank of Mom & Dad commentary/editorializing. I’m still twitchy about it.

Not PF-related, but it highlights one of my fears about blogging. It’s like going to a party of crunchy people and taking a drink whenever you hear someone say,’I heard on NPR…’ during conversation. It may require registration. Go to Bugmenot. BTW, you must sip your on-hand beverage whenever I mention NPR in this blog.

Recently Enjoyed Posts is a post from: Mapgirl's Fiscal Challenge

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Digging out something else I haven’t posted yet.

I’ve always had a natural interest in finances, but one of the things that got me focused was folks in an online debt reduction community who were looking for answers to improving their credit score. Kiplinger’s has a great article on it from their March issue. Particularly page 2.

The main thing is to pay your bills on time, for a long time. Slow and steady will win the race on this one.

It debunks the myth that you should close your accounts.

It should alleviate fears about marrying someone with a low score. Just play it right and it shouldn’t matter.

It’s good stuff.

Kiplinger’s FAQ on How to Boost Your Credit Score is a post from: Mapgirl's Fiscal Challenge

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