Credit myths that need to die

YCS4 coverThe more you understand about how credit works, the more frustrated you get with how much misinformation is floating around out there. At least, that’s true for me and the three experts who joined me last week on a Google hangout to talk about “Credit myths that need to die.”

John Ulzheimer, who’s worked at Equifax and Fair Isaac, has unique insight into the credit reporting world. One thing that drives him around the bend is the persistent myth that employers use credit scores to evaluate applicants. Another myth he hates: the one about how closing accounts hurts your credit scores.

Gerri Detweiler, who writes for Credit.com and runs the DebtCollectionAnswers.com, discusses how medical debts affect your credits and debunks the myth that you need to carry balances to improve your credit scores.

Maxine Sweet heads consumer education at Experian and battles the myth that there’s just one credit score.

Take some time today to check out our discussion. You’ll come away from it a lot more informed about credit and how to make yours the best.

Join our credit chat tomorrow

liz-credit-mythsI’ll be hosting a live video panel discussion about credit myths and facts tomorrow, Dec. 13, at noon Eastern/9 a.m. Pacific. Joining me will be John Ulzheimer of SmartCredit.com, Gerri Detweiler of Credit.com and Maxine Sweet of Experian.

This is a reprise of a conversation we had at FinCon13, the financial blogger conference held in St. Louis this fall. People there really seemed to get a lot out of it, so we thought we’d share our insights with a broader audience.

My panelists have the inside scoop on the credit industry. John has more than two decades’ experience working in the consumer credit industry, including stints with credit bureau Equifax and credit score creators Fair Isaac (creators of the FICO scoring formula). Gerri’s my go-to expert on consumer credit and debt collection; she’s also the author of the books “The Ultimate Credit Handbook” and “Slash Your Debt.” Maxine Sweet leads Experian’s consumer education efforts and knows how to give clear, concise (and correct!) answers to your questions.

You’ll find the live video stream here. Please bookmark the site and join us tomorrow for insights you won’t find elsewhere. Thanks!

Wednesday’s need-to-know money news

Today’s top story: Choosing the best credit card. Also in the news: Financial predictions for 2014, financial resolutions for Millennials, and how to manage ballooning credit card debt.

Which credit card is the best?
Don’t get sucked in by perks you’ll never use.

3 Financial Predictions For 2014 That Will Be Good For Your Wallet
Credit scores are about to become more realistic.

Nine Financial Resolutions For Millennials
How to start 2014 off right.

Manage Ballooning Credit Card Debt
What to do when that 0% interest rate runs out.

A Little-Known Credit Card Perk That Can Save You Big
Disputing charges is much easier when you’ve used a credit card.

Wednesday’s need-to-know money news

Today’s top story: Should real estate be a part of your retirement plan? Also in the news: How to avoid resetting the mortgage clock, finding the right financial advisor, and how to manage erratic prescription drug costs. Offering Advice

How Real Estate Fits Into Your Retirement
The risks and rewards of including real estate in your retirement plan.

How to Refinance Without Resetting the Mortgage Clock
Don’t turn the clock back 30 years.

5 Questions to Ask a Potential Financial Advisor
Making sure you find the right person to serve your financial interests.

The Zig-Zag Pricing of Prescription Drugs
What to do with erratic prescription costs.

Are credit cards more expensive now?
How did the CARD Act affect what’s in your wallet?

Monday’s need-to-know money news

Today’s top story: Mistakes to avoid while holiday shopping. Also in the news: Maximizing your retirement goals, conversations to avoid during the holidays, and five store credit cards that are worth applying for.

5 Holiday Money Mistakes
Don’t let your purchases be driven by guilt.

Three must-dos to maximize retirement goals
Getting the most from your retirement planning.

5 Money Conversations You Should Never Have During the Holidays
AKA How to avoid a food fight.

5 Store Credit Cards That Are Worth It
Finding the cards with the most benefits.

Roth or Regular: Which IRA Should You Choose
Solving the IRA puzzle.

Friday’s need-to-know money news

Today’s top story: The dangers lurking behind Black Friday shopping. Also in the news: How to resist splurging during the holidays, the pros and cons of tech warranties, and what you need to know before signing up for a store credit card.

5 Dangers of Black Friday Shopping
One of the favorite days of identity thieves everywhere!

7 Ways To Resist The Urge To Splurge During The Holidays
Just because it’s on sale doesn’t mean you have to buy it.

Spending: What you need to know about tech warranties
Protecting your latest bright and shiny gadget.

5 Things to Know Before Signing Up for a Store Credit Card
Too many store cards can damage your credit.

4 Tips to Begin the Estate-Planning Process
Having a thorough plan is an essential.

It’s okay to close credit accounts sometimes

Dear Liz: I have heard that you should never close credit card accounts of your own volition because that can hurt your credit scores. Are there any exceptions? I received a credit card several years ago, when my credit scores were in the toilet because of a number of collection accounts and delinquencies. I had no other open credit cards, so when they offered me unsecured credit, I accepted it willingly. The interest rate was (and is) 23.99%, and I was charged a $72 annual fee. Now, six years later, my credit scores are greatly increased. But you would never know it by this issuer. They have refused my request to lower the interest rate, and the annual fee has now gone up to $99 a year. My credit limit is $2,100 and a credit line increase of $150 would cost me a $14.95 fee. Under these circumstances, would you still counsel not to close this account?

Answer: Closing credit accounts won’t help your credit scores and may hurt them. But that doesn’t mean you should never close an account.

If you have several other credit cards, your credit scores probably won’t suffer much of a hit from a single account closure and will recover quickly from any damage done. You don’t want to close accounts if you’re still trying to improve your scores or if you’re in the market for a major loan, such as a mortgage or auto loan. Otherwise, though, there’s no reason to continuing paying for a card you no longer need.

If this is still your only credit card, you should use your good scores to open one or two cards with better deals. Then you can say good riddance to this one.

Protect yourself from holiday credit card fraud

GiftHoliday shopping means more opportunities to whip out your plastic—and more opportunities for thieves to try to steal your identity. Here’s what you should do.

Be vigilant. If you haven’t already, sign up for online access to your bank and credit card accounts. You should be reviewing your transactions at least weekly.

Be reachable. Update your contact information so your issuer can reach you quickly in case they spot fraud.

Be alerted. While you’re at it, sign up for alerts. Most issuers allow you to get a text or email alert for large or overseas transactions.

Beware fraudulent deal sites. Their eye-popping bargains may just be a way to get your credit card numbers. Stick with the real deal, like DealNews.

Be diligent. Install and update anti-malware software.

Be smart. Use your credit card rather than your debit card in high-risk situations, as I wrote in “Debit cards can be riskier than credit cards.” If you must use a debit card, sign for it rather than using your PIN since that typically offers you better protection against fraud.

Friday’s need-to-know money news

Credit Check 1Today’s top story: How to avoid the worst credit cards of 2013. Also in the news: A new debt collection law, five things you should ask your financial advisor, and three investing mistakes retirees must avoid at all costs.

How To Avoid The Worst Credit Cards Of 2013
Easy credit can come at a gigantic price.

A New Debt Collection Law: What It Means for You
If you live in California, debt collection just became more consumer friendly.

5 Things You Should Ask Your Financial Advisor
Determining if your financial advisor is a good fit for your situation.

3 Investing Mistakes Retirees Must Avoid At All Costs
What to do in order to protect your lifelong earnings.

How social media ruin insurance claims
Not everything requires a status update.

Thursday’s need-to-know money news

Top Story: Predictions for the 2014 housing market. Also in the news: When is the best time to buy a new home, how we’re feeling about money, and the best place to rebuild your nest egg.

Glinkonomics: Predictions For The 2014 Housing Market
What’s to come in the year ahead.

Is There a Best Time to Buy a Home?
There is, and it’s coming up fast.

Survey Says … Our Many Moods About Money
How people are feeling about money.

Where Boomers Should be Investing Now
The best places to rebuild or secure your nest egg.

Best Credit Cards With 5% Cash Back Rotating Categories
Making your credit card work for you.