Okay, so the marketing is well done…the song is easy to remember…and so is the website.

But what about the product?

Is their free credit report really free?

Sadly, free doesn’t always mean free these days. Sometimes it does mean free. But sometimes it means “free but…”. Like “free but…you have to pay for shipping.” Or “free but you must buy something else first.” Or in this case “free but you need to sign up for a monthly service.” I don’t know about you, but to me free should mean “free.”

And when it comes to credit reports or credit repair, there is even more to this story. The average consumer is bombarded with credit card offers. Even if they are not in a good financial position and will only get deeper into debt. Most people have no idea what their credit score is or what it really means. Of course, that doesn’t make the advertisers the bad guys. But it’s hard for some people to weed through the “fluff” to find the answers they need.

On that note, here are some interesting points that the free credit report TV commercials don’t tell you:

1) Like I said earlier, in order to get the free credit report you must sign up for paid credit monitoring service, that is billed monthly. Sure, they say you can cancel at any time. And that is a nice option. But how many people forget to do this? Or think that they actually need to the service? Is monthly credit monitoring a rip-off? No, it can be meaningful, especially if you’ve have trouble with other people stealing your credit cards. But for most people it is simply a service you don’t need.

2) You can get free credit report – for free! The credit bureaus have set up a service at annualcreditreport.com that allows consumers to get one copy of their credit report from each of the 3 credit bureaus each year – for free, with no catches. They have done this to comply with the Fair Credit Reporting Act, and this is the only authorized site. You can get all 3 at once, or spread them out and request a different one every 3-4 months (and in a way, do your own credit monitoring). Also, if you are ever turned down for credit or a loan, you can request a free copy of your credit report to get an idea of why you were turned down.

3) what to do once you get credit report. If you’ve never looked at your credit report, it’s kind of interesting – it shows your payment history, open accounts, closed accounts, balances. It’s a strange feeling seeing your financial life broken down into a bunch of numbers. But once you get past the “cool factor” you need to decide what to do with this information. Frame it? Stick it in a drawer? Toss it in the trash? Nope, none of the above. First, you need to look carefully for errors. Check out your name, account histories and balances, open/closed accounts. And if you find any errors you need to either fill out the dispute form or write a letter requesting that the errors be corrected. Then…

4) You CAN get bad credit removed. I know, the “experts” tell you that you have to wait 7 years for bad credit to fall off your report. Technically, that’s correct. But you can do a little more to speed up the process. And you can do it legally and ethically. What is this strategy? Ask the creditors to provide you with written verification that the item is correct. And if they can’t, then they must delete it. Don’t lie. Don’t give any excuses. Just ask for written verification. In most cases, they won’t do this and they’ll remove the bad credit. Again, there’s nothing unethical about this, you are just asking for proof.

5) How to avoid future credit problems. A colleague of mine used to say “credit cards don’t come with instructions on how to use them responsibly”. How true! All you need to do is apply for a card, and if your numbers fit you’ll get credit. For many people this is not a problem. But some people use credit cards as if they were cash. And figure they’ll pay off the charge when the bill comes … and then don’t. And you know what happens next – you carry a balance, get charged interest, and the balance grows. And the same happens next month, and before you know it your debt gets out of control. Then you miss a payment here, miss another payment there, and your credit score falls like a rock falling off a cliff!

That’s not to say that you shouldn’t use this product. For some people, it just might be the right solution. But the takeaway point to remember is that a catchy song, a flashy ad, or a memorable marketing campaign don’t always mean that the product is right for you. And it doesn’t always tell the entire story.

So, next time you hear the catchy free credit report song, realize that “free” isn’t always as good as it sounds.

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Kris Bickell shares the financial tips he learned the hard way at Debt-Tips.com. Whether you need help getting out of debt, fixing your credit problems, or saving money, you’ll get honest answers to hep you become debt free.

Whether you plan to tuck money away in savings accounts, IRAs or even fixed rate bonds you may be having second thoughts and for good reason. The way people are spending is completely changing because of this situation. You aren’t alone in wondering what this downgraded credit rating given to the United States means to you.

What does a downgraded credit rating means? Lending money is a risk. There are some consumers that pay back everything that they borrow with interest. There are some that end up defaulting on the loan. In this case, the lender ends up losing money and isn’t always able to the recoup the funds. It helps to know in advance whether a person or business is a risk worth taking.

When the United States’ credit rating was downgraded, it made many lenders a little wary. People already feeling the insecurity of a struggling economy have become even more worried. No one knows what the future holds, but most people believe that there is more bad news to come. Insecurity ran from the top of the financial world all the way to the bottom. Now it isn’t just the US that seems like more of a risk. It is also the United States consumer that has been downgraded as well.

Many families will find themselves paying more when their credit card bill comes in the mail. One of the major effects of credit rating downgrade is that interest rates are going to rise. If your credit isn’t great, you may have noticed that the interest rate for a home or a car is more. Now the US consumer, being considered a higher risk, is going to have to pay more interest on their credit cards.

More of the family’s budget will go to paying the minimum balance on the credit cards. Some who were working towards paying them off and adding to the principal may need to stop in order to just make the monthly minimums. For a family living paycheck to paycheck, this can be huge. It might mean cutting other parts of the budget in order to try to meet these payments and not lose out on their own credit rating.

One of the first things that families and individuals tend to cut in a family budget is savings. Who has the money to purchase fixed rate bonds when you can’t even make the payments for things like your credit card, your electricity or your car?

People tend to look at all the things that they spend in a month and start cutting things considered to be luxuries. In this case, savings accounts don’t put food on the table and don’t require a deposit, so they are one of the first things to go.

Unfortunately, unsure times are one of the best times to save. If you don’t know what is around the corner, you want to have enough cash set aside in case things get worse, or you notice that there is less money coming in or more money going out. If you just keep money at home or stop saving all together, you miss out on the opportunity for your money to work for you.

Savings accounts, IRAs and fixed rate bonds let your money work for you. When you place money in these accounts, you earn interest without really needing to do anything. When times are unsure, this is one way that you can give your money a limited amount of security and expect that it will be able to do good things for your overall financial situation.

While times may come which force you to cut back on your savings and investing, don’t give it up all together. Even if you can only deposit in small amounts, keep making those deposits.

There is a way to keep moving in the right direction in spite of the credit rating drop in the United States. Take the time to tighten the belt and make cuts in your spending where you can. Figure out where your money goes every month.

If there are places that you can make cuts or reduce the amount of money that leaves your home, you will be in better shape. Instead of giving up on savings accounts and fixed rate bonds, consider skipping eating out or some forms of entertainment that could be costly.

Your minimum payment and interest rates on credit cards are going to go up. Because of this, use it as a motivation to get the balances paid off as quickly as possible. If you don’t already have a plan, come up with a way to get the balance paid down so that you no longer own money to the credit card companies. Then you can work to learn how to manage your credit responsibly.

Things will turn around eventually. Over time, credit ratings will realign and economies will once again feel an upturn. When that comes, you will have learned so many valuable lessons that will help you to be a better consumer and a person who continues to strive despite a down turn in the economy.

As you look around, you probably can see that there is a lot of worry and uncertainty in the future. Now, more than ever, it is more important for you to take a look at the way that you spend and save. Look at your investments and make sure that you have made the best decisions possible for your money. Things may get a little worse before they get better, but things almost always rebound. There is just no guarantee of when, or how, it will happen.

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Article provided by moneysupermarket.com, the UK’s number one comparison website where you can compare a range of savings products from stocks and shares to fixed rate bonds.

Credit scores are stored and calculated by a few different competing entities, which can cause some discrepancy. The main system for checking credit was developed by the Fair Isaac Co. and is deigned the FICO score. FICO is the primary source of credit score calculation amongst the United States amongst the credit bureaus, which are hosted by the three big names in the credit industry: Experian, TransUnion, and Equifax. The system works by issuing a credit rating that ranges between 300 and 850 that grades credit payment performance, with 723 being the average amongst credit holders. The divide between prime and subprime credit is traditionally set at the 620 mark, to give an indication of where healthy credit would lay on the system. Due to the split amongst the three credit bureaus, Americans are allowed to have issued a free credit report yearly from each of the bureaus. Contrary to logic, however, this report does not include your credit score, which must be accessed separately through different channels.

Credit inquiries are divided into two categories: Hard and Soft inquiries. The hard inquiries are designed to be checks based around when you make functional use of your credit. If you’re checking for the purposes of a loan, a mortgage, or a credit card the check that is involved is done to see if you’re a viable candidate for that type of contract. Hard credit loans do affect your credit score negatively due to an increase in the amount of functional checks, meaning an increase in the likelihood of other similar financial ventures, which would denote a heightened chance of credit defaulting on behalf of the credit holder. A soft inquiry, however, does not adjust your credit rating. The soft checks look for non-credit and loan utilities, such as a check by an employer or pre-screening by corporations for future credit offers.

Usually a single hard credit check will only move your credit score negatively by 5 or so points. But this is statistically adjusted for someone who has held a credit line in good standings for multiple years. For new accounts with more questionable standings a hard credit check can be a lot more significant, weighing more heavily on fresh accounts until they get some mileage on them. Also take into consideration that having several inquiries over a short period of time can add up to a significant hit on your credit rating, due to the notion that it denotes a high likelihood of financial distress. This can lead to a snowballing situation where a holder with an otherwise well maintained credit score is under slight duress which begins a cycle of denied loans and inevitable financial breakdown created by the exact same system to protect against it. This scenario is extremely rare but has been called into question as a very substantial negative to the system as it’s designed to be built to protect lenders over the interests of their clients.

Multiple credit checks of the same kind have a built in safety feature that will not impact your credit rating too drastically. If multiple checks of the same kind are made within a fixed period of time than all further checks beyond the first are discarded. The typical time frame window for this effect is usually between 14-45 days, but there are several other factors to take into consideration. Credit inquiries only stay on your credit report for two years, but typically the credit score formula only really adds the inquiries from the previous year. For the most part if you do not apply for any credit inquiries for over a year than the negative impact of the credit checks should fall off and give you a cleaner slate to work with.

These systems are in place to help protect loan issuers from users who often and systematically apply for loans. It helps decrease the chances of defaulting and of fraud, and mostly should not impact the typical credit holder. It also has the negative impact of potentially causing a lot of distress to someone who might already be in a financial crisis and just can’t get their foot in the door to receive a loan, however. The best thing to do when it comes to checks like this is to be frugal and conservative, and not to bandy about your credit score until you’ve shopped around.

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Mike Thimmesch writes for Totally Money where you can find out how to get interest only mortgages and browse through different options for a cheap mortgage.

The solution is to be had with a pre-paid, or pay as you go, program. These are designed to be used on an as needed basis, and no plan is necessary in order to access the services. And the services can be of a very high quality at that. Most offer excellent coverage, affordable rates, and ease of use.

Of course, you will need to purchase an appropriate telephone, but these can be had for less than ten dollars in many instances. Once you receive the new cell phone, then you register it with the service provider. Once registered you simply purchase minutes, as you need them. This can be done at a physical store, online, or through the telephone itself.

A quick online search will lead you to many very reputable services that can help you out. There will be no credit check whatsoever. All you need to do is order the right instrument for you and simply pay as you go. While the minutes can tend to be on the expensive side, the good news is that once you can afford it, better plans are easily available.

A telephone is a vital tool in the employment world, and if you are a little behind financially it may be even more important for a job search. These companies are where to go for what you need. There will be many different telephones available for purchase, all with unique features. Some offer text and internet along with the usual telephony, and sometimes these are added bonuses just for buying airtime.

If used with caution, and used with thrift in mind, these can be an excellent resource for one who simply needs a telephone for business purposes. It can also help your poor credit rating by showing that you were able to honor a commitment with a company over time. While not the same as a regular utility, it can help.

A bad credit cell phone may well be a necessity in ones life, and they are easily obtainable. Again, look online for what will work best, and make that small investment. You can then remain connected to others as well as to opportunities. The very best part is that you cannot get into deeper debt with one, because you pay for it before you use it.

Having a good credit standing will enable a person to enjoy most things in life compared to the person with a bad credit record. And the sad truth is that, what’s being said on the credit report of some individuals are sometimes not true due to some errors, which could really happen, according to some reports. Credit card application denials, high interest rates on mortgage loans and other negative and embarrassing impacts of a bad credit record could make a toll in the emotions and lifestyle of the individuals involved. But having a low credit score can now be fixed with the help of a good credit repair law firm.

Sometimes, people are wary of getting help to get their credit ratings up, and they do the process themselves. Some have succeeded but oftentimes, the process is long. That’s why people often choose to get the help of a reputable credit repair law firm in order to fix their credit standing or increase their credit rating. The fees of these firms vary considerably and what people are saying about their services also counts. So anyone wanting to find firms in getting their credit status fixed, must also study these firms first and listen to what others are saying in order to get the full advantage.

There are many credit repair law firm that offer excellent services to anyone with low credit score and those actually needing to clean their report. The process could take months, and the firms have monthly fee charges ranging from $9 to $60 or even more per month. Other firms would offer their consultations free of charge, and would extend adequate time to explain the whole process to their clients. Most of them do all the work for their busy clients and sometimes deliver increasing credit scores in less time than expected. Others were able to process their loans with lower interest rates right after their lawyers worked on their cases and many credit card applications were granted.

People who got bad credit reports in the past are especially those needing their services. The bad credit standing for them came when they were out of job or when they were unable to pay their credits due to some emergency situations. Once it was recorded as such in their credit reports sometimes it takes years before it gets clean again, even after the payment of such credits.

It is not only people with bad credit reports who go to these firms. People who need to increase their credit ratings also seek help from these firms. It is important for them to have a high credit score for the ease and convenience of getting their transactions done faster. They could process their car loans or mortgage loans or even get apply for credit cards faster and without much fuss. They could also avail of low interest rates for those loans due to their high credit scores as credit companies have faith in their capacity to pay the said loans.

Building a good credit history is mandatory so as to lead a hassle free life. Usually, financial organizations refrain from entertaining borrowers with bad or low credit scores or provide loans at higher interest rates. Insurance companies charge higher premiums for such persons. Persons with low FICO scores need to even pay higher deposits for getting a phone or utilize other services.

In case anybody has bad credit scores, it is very much required to take adequate control measures so as to improve them. Below mentioned are some important tips for improving credit scores.

1.Check your credit reports: Credit reports or credit scores are determined based on certain factors that include the past payment history of the individual, the amount one owes as credit and the type of credit one has got or applied for. Also, a person is eligible for getting one free report each year from each of the three credit-reporting agencies. One should always remember to check the credit reports carefully. Any errors or mismatched information in the report must be duly notified to the respective credit-reporting agency along with proper evidence. Consider this fact. One single late payment if reported to the credit-reporting agency, can affect the credit scores by almost 100 points, particularly for those individuals with higher credit scores.

2.Next important tip is to ensure that all the bills are paid on time. This includes aspects such as library fines or parking tickets.

3.Bankruptcies also affect credit scores. In case any individual is facing such a situation, the best strategy is to have consultation with a financial management service or a credit counseling service and find ways to avoid bankruptcy. Any such consultation doesn’t affect the credit scores. An important fact is that bankruptcies are displayed on the credit history of a person for almost 10 years.

4.Do not apply for more credit cards or loans. Many people do not know the fact one single credit inquiry can reduce the FICO scores by 5 points. In case one wants to compare quotations from different companies before obtaining a mortgage loan, best strategy is to go for shopping within a specified time limit where all the credit inquiries are considered as a single unit. Information about this can be obtained by calling any of the credit reporting agencies.

5.Never try to cancel any existing credit source. Older credit accounts ensure long credit history of an individual.

6.Another strategy to improve credit scores is to try and use credit cards as sparingly as possible. Always limit the spending potential up to 30% of the available credit limit. This is because excessive spending is considered as a negative factor.

FICO scores do have a significant impact on the overall social life of an individual, right from obtaining a mortgage loan to get a home on rent. Recently, having good credit scores is becoming a prerequisite so as to obtain a good or high paid job. By avoiding the importance of FICO scores and failing to implement appropriate credit control measures, one might end up losing thousands of dollar every year and also many more opportunities in life.

You’re better off using credit cards if:

* You’re looking to build up a good credit rating
* You’re responsible with paying bills on time
* You pay off your entire bill amount every month instead of just the minimum amount due
* You carry more than one card and are able to compartmentalize your purchases according to work, personal, travel or similar categories, and pay off all the cards each month
* You’re looking for borrowed cash every month without having to pay an interest. You get to keep the money you have, and pay back your bills with your next salary.
* You want to keep track of your purchases.
* You want the incentives and gifts that credit card companies offer.
* You are aware of the APR, grace period and other terms of service before you sign up.
* You never use it for a cash advance – this transaction carries a high interest rate which kicks in immediately.
* You take advantage of co-branded cards where you get points for spending at their outlets.
* You are careless with your cards – while a debit card can be used to steal your money if it falls into the wrong hands, a credit card is more secure in that you can report it when it gets stolen and cut your losses. However, you can minimize your losses to $50 if you report your card or PIN as stolen within two days of discovering the theft.

You’re better off using a debit card if:

* You tend to splurge without a thought for the morrow when you go shopping.
* You cannot seem to pay your credit card bills on time and end up paying an interest every month
* Your credit card debt is accumulating exponentially
* You’ve had bad experiences with your credit cards
* You need to withdraw cash from your account at the ATM
* You are careful with your card and your PIN. Ensure that no one is watching when you swipe your card and enter your PIN when purchasing something.
* You’re using it to teach your child good spending habits.

At the end of the day, it’s your temperament, responsibility quotient and buying tendencies that count when you choose either a debit or credit card. Some people opt to carry both and enjoy the best of both worlds, so if you’re level-headed and understand the way both cards work, you could do it too.

This post was contributed by Kimberly Peterson, who writes about online accounting degrees. She welcomes your feedback at KimPeterson2006 at gmail.com

What exactly is a credit score? A credit score can be rightly described as a number that represents or indicates whether a person has the ability to manage his/her finances or not. Credit scores have significant effect on almost every lending decision. Although there are different ways of determining credit scores, the most universally followed approach is the one that has been developed by Fair, Isaac and Co. In this system, the credit scores of an individual are reported in the form of FICO scores and are normally present in the range of 300 to 850. Higher the credit score of an individual better is his/her credit worthiness in the market. Also, higher FICO scores suggest that the individual is well-versed with his/her financial management. Getting scores greater than 800 is almost impossible for anybody. Hence, one can feel assured if the scores are anything higher than 660.

There are certain criteria that are considered while calculating the FICO score of an individual. Some of these include

• 1.Past Payment History: This includes whether the individual has any past history of delinquency or has ever failed to make payments in the past or not. Higher number of failed payments in the past greater is the chance of repeating the same in the future.
• 2.Type and amount of credit: Another criterion is the amount of credit an individual owes and also the type of credit. Individuals who had reached close to their maximum limit on their credit card are considered as less credit worthy. Also, individuals depending entirely on their secured credit cards are also considered as risky in comparison to those with revolving payments on their loans.
• 3.Age of the credit: Also, persons with longer credit age are favored in the Fair Isaac system.
• 4.Under the Fair Isaac system, higher credit requests are considered as negative. In this system, individuals are considered risky when they apply for a greater number of credit cards, loans and other type of debt instruments within a very short period of time.

Each one of these criteria is given certain points based on their fulfillment. All these points are included in a formula and the FICO scores are determined. The credit scoring formula developed by Fair Isaac Corp is used by all the three major credit reporting bureaus in U.S including Equifax, TransUnion and Experian. However, the fact is that the scores provided all these bureaus with respect to an individual are not the same. The reason behind this is that all these three credit-reporting agencies may or may not receive the same information. Hence, it is important to get the FICO scores from all these three agencies whenever anybody wants to evaluate his/her personal credit ratings.

FICO scores are relative numbers calculated on the basis of certain factors. The entire objective of a FICO score is to determine whether or not an individual has the capacity and the required intention to pay back the credit. Many tend to consider a FICO score as a simple number. However, an important factor that one should remember is that if these scores are not maintained properly, one might end up losing hundreds or thousands of dollars by paying extra for home loans, car payments, credit cards or other utility bills.

The average American has anywhere from five to eight credit cards and can carry a debt of more than $20,000, and for some the number is even higher. Learning the ins and outs of credit management may save you from a bleak financial future and thrust you into the light of financial freedom.

Ignore the Rules of What Financial Institutions Deem Your Acceptable Debt Level

In financial matters, debt to income ratio is a deciding factor in the level of credit you receive. You can carry debt of at least 25% of your income, but is that a wise decision? Keeping your debt to income ratio to a more modest 15% is always advised. Many people live from paycheck to paycheck and if something unforeseen should happen, the amount of debt you carry can send you spiraling downward financially. Just because a credit card has a spending limit of say $10,000, it doesn’t mean you have to charge that amount because as so many forget, the debt must be paid back and you are paying back far more than you borrowed.

Minimum Amount Due

Paying just the minimum amount due on your credit cards will have you beholden to the credit card company for almost your entire adult life. The amount is calculated to keep you paying for many years to come with a profit to the financial institution that is astronomical. Finding the lowest possible interest rate for your credit cards is often not enough. Paying above and beyond the minimum due will have you paying off your credit cards quicker and for a lot less money.

Keep Your Eye on Fees

If they can charge you, they will. Not only do you have to worry about late fees, you need to be aware of many of the other charges that financial institutions try and slip under your nose. If you lose a credit card you will likely have to pay a replacement fee. If you think you are not going to make the due date, paying by phone can cost you too. Credit cards are not required to tell you that the purchase you make is going to put you over your credit limit so you will end up paying over the limit fees until you pay down your debt to the acceptable level.

The convenience check offers you receive in the mail often come with a price tag as well. You may pay a higher rate of interest by using these “convenient” checks that are supposed to allow the card holder to relax and buy what you want and you may also be charged a fee for simply utilizing it.

Most of us don’t take the time to read the fine print when it comes to our credit cards. Being knowledgeable about the many hidden fees you may be charged may save you enough money to send your child to college. Don’t let the financial institutions line their pockets with your money; learn your lessons and charge responsibly.

Others have received the same offer, and I found some good discussion about the topic at Fat Wallet.

Many people are rejecting the offer. One of the reasons being that the new card has no credit limit, which can hurt your credit score. If you don’t have a credit limit, credit scoring companies often use your total balance as the limit. So instead of having a low credit utilization, you will have a high credit utilization (100%). And credit utilization accounts for 30 percent of your credit score.

If you receive the same offer, there are a few things to consider, and I recommend checking out the Fat Wallet discussion to compare the options. As for me, I think I will most likely reject the “upgrade”.