Credit Report

Over Your Credit Limit? Purchase not approved

The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.

Tip Number Three

In the past, you wouldn’t know if a purchase put you over your credit limit until you received a big fee on credit card statement.

But that’s changed. Now, if a purchase will put you over your climit, your purchase will be declined. With the new Credit Card Act of 2009, only pre-authorized purchases will be approved.

(Remember, this doesn’t apply to your debit card. You’ll receive no warnings if a purchase will overdraw your checking account. )

Do You Share the Credit Card Equally?

If you share a credit card account with someone else, you are either an authorized user or a joint credit card user. Knowing the difference can help protect your credit score.

If you’re an authorized user, it means you can use the credit card account, but you’re NOT responsible for the payments. You have a card with your name on it, but you’re not the “card-holder.” The account won’t appear on your credit report, so it won’t help, or hurt, your credit score.

In the past, parents could add a child as an authorized user. This helped the child start his credit history, making it easier to get that first car loan or student loan. Because of some abuse, credit reporting agencies stopped monitoring authorized users. It’s now more difficult for children to begin building their credit history, but not impossible.

If you’re a joint credit card user, you and the other person were considered equally when you applied for the account. You are both responsible for the payments and the account will show up on both your credit reports. Joint card-holders should make a habit of reviewing bills and payments together to help protect you both from mistakes or fraud.

Credit Report: How, Why and When

Credit Report Error

Looking at your credit report could be the most important financial thing you do this month.

How: To order a free credit report online go to www.AnnualCreditReport.com. To order by phone call 877-322-8228. To order by mail, send your request to Annual Credit Report, Request Services, P O Box 105281, Atlanta, GA 30348-5281. It’s that easy. You don’t have to pay a service to do it for you.

Why: Your credit report is so important to your financial life that I feel strongly that you should use your credit report as a tool to make your life better. What can it tell you?

Find out if your accounts are considered paid “on time” by your creditors.
Find out who has requested your credit history.
Find out if your personal information matches your real circumstances.
Find out if someone else has created an account in your name.

Once you have read the report, correct any errors by following the instructions there. Errors can keep you from getting good deals on loans, credit, insurance and even employment.

Make sure that you order a credit report for every person in your immediate family, including the children, because children’s ID theft is becoming common. We are given a social security number at birth, but it shouldn’t be used until we are old enough to apply for credit or benefits. Surprise, some young people are finding out that they have been the victims of ID theft when they apply for credit for the first time. Don’t let your child be one of these.

When: You can order a free credit report three times a year because each of the three major credit reporting agencies (EquiFax, Experian and Trans Union) have to give you one annually if your ask for it. Take advantage of this.

I personally order a free copy through EquiFax in January, Experian in May and Trans Union in September. I figure that I owe it to myself to protect my finances, don’t you?

Join our Free Credit Report Reminder Program by emailing Val@JillRussoFoster.com. You won’t have to remember when or how to order your credit report with this program. A reminder with instructions will be sent to you three times per year.