MyFico webinar tip

I attended a www.myfico.com Webinar today. I learned this tip:

Skip those credit "deals" where you are offered 20% off for all purchases on a given day if you open a new store credit card. In the long run, that extra credit drives your FICO score down and increases your overall cost (interest rate) of credit.

From MyFico:

Retailers love to tell you how opening a department store card can save you an extra 10% or 20% on your purchases. We've all done the math at the register when the cashier offers to save you 10%; hmmm, so that's $15 bucks off these $150 leather boots by opening this card – tempting alright. The bad news is these department store cards typically charge very high interest rates, so if you carry that $150 balance for even one month, you'll be giving that $15 savings back and then some. Not to mention, each time you open one of these new credit accounts might be dinging your FICO® score. As a general rule, don't accept the new credit offers when shopping; that small savings today, most likely isn't worth it in the long run.


Other tips: Improving Your FICO® Credit Score

How to repair your credit

How To Fix Your Credit

Intro:

If a low credit score is limiting your ability to get a car or home loan, there are five basic steps you need to take to raise it.

The process isn't complicated, but requires the basics of discipline and common sense. Remember: There are no immediate fixes and repairing the damage takes time.

"You've got to stop digging the hole before you can get out," says Gail Cunningham, Vice President for Business Relations at Consumer Credit Counseling Service of Dallas. "You've got to freeze your spending. It won't get better tomorrow unless you do something today."

Start by cutting up unsolicited credit card offers that arrive in the mail. Accepting similar deals allows you to run up large balances on several cards and transferring the balances to one card doesn't reduce the amount owed. Worse, the low introductory interest rate on a new card is likely to encourage more spending.

But don't cut up all your current credit cards. There's no need to conduct all transactions in cash. Creditors tend to view someone with no credit cards as a higher risk than someone who has managed a few cards well.

One major bank credit card and one oil company credit card should be enough. Use a debit card when possible because there's a direct link between spending and your bank account.

Steps (view article for full narrative):

1. Get your credit report.
   
2. Pay your bills on time.
   
3. Keep your credit card balances low.
   
4. Learn from your mistakes.
   
5. Write a budget – and stick to it.
   

Comment: There is a link on right column for the free credit report! See Credit Card offer Opt Out to Opt Out of those annoying credit card offers!

From "Learn from your mistakes" point:

Oddly, once you're on the comeback trail, you'll find it's easy to backslide because your finances are in better shape. It's much like dieting – mints look manageable after losing 25 or 30 pounds.