Preface
Who needs credit? Unless you make over $1,000,000 a year and afford everything in cash, you do. There is no way to escape it, you need credit. It’s inevitable. You need a house someday, you are bound and determined to buy a new car, unless you have tons of money in your checking account, you need a credit card.

I am defiantly not the poster child for good credit. Over the past 7 or so years, I made horrible mistakes; Some intentional, some not. The following article will dwell on the vast experiences I had with various businesses and services. Hopefully this information will better inform people what to stay away from and what is critically needed for your financial future.

Student Loans. Don’t slip on them, especially now
I obtained a Stafford Loan from a well known bank in 1993 to help with my expenses to go back to college. Little did I know that the amount that I got wouldn’t even be close to all what I needed. So after a semester of college, I ended up having to quit. The loan that was meant for one full year ended up to be for one semester, and I still owed about $500.

After six months you are expected to start making payments on these loans. Did I, nope. Why? Because of stupid arrogance. Needless to say I defaulted on the loan and was submitted to New York State Higher Education. Not being in work didn’t help in negotiation but they decided that I could afford to pay $25/mo. Did I pay? Nope? Why, again foolish arrogance. I had the mentally that I would be paying forever on a small loan. Little did I know that I could send $5/mo and it would have paid down on the loan.

So finally in 1998 I got a Federal Guaranteed Loan and by a stroke of good luck (which at the time I thought it to be bad luck) my NY State Income Taxes got seized and was fully applied to the loan. This did help me in a big way because I no longer would be paying interest on the loan, and the amount I owed on the loan got cut by 75%. So now I am making $25 payments on a loan that technically I don’t have to make a payment on for another two years. This helped me to put a crucial positive mark on my credit.

I got lucky out of this whole situation. New federal laws passed allow student loans in default to be on consumer’s credit indefinitely. Moral of the story here is don’t default on your loans. Make as much of a payment as you can, even if it is $5. Most important is communication. Contact your bank, college, state, whomever gave you the money and let them know if you can’t make the normal payments. You would be surprised what a little communication will take you.

Car Notes. The higher the amount the better
Some people will think that I am crazy on this one, but there is a method to my madness. When applying for a car, whether a lease or loan, the MSRP on the vehicle plays a crucial role for your credit.

Allot of people don’t know that one determining factor in apply for credit is what is deemed your “high credit”. And since for most people, next to a house, your car is you most expensive possession. The higher your “high credit” the higher your FICO score and the greater likelihood you will get the credit you deserve.

Bad marks are not necessarily against you
Just because you have missed a payment, doesn’t mean you won’t get credit. Some (not all, some) creditors not only look at you good v. bad marks, but they also look at your past six, twelve and twenty four months of credit history specifically. So if you have bad marks from 3-5 years ago, it will count against you, but not nearly as bad as bad marks from 3-5 months.

Credit reports seem to be a total “information docket”
Like it or not, not only is credit reported in these databases, some agencies also track your criminal history, legal history, job history, residential history and so on. There really should be a law against this but as of 2001 there is not.

Remember that some services like insurance companies and even your job can request a credit application (with your signature of course) to score your worthiness. It’s not right, but again, it’s not illegal.

Order your reports often
With the above paragraph in mind, it should make you run out and order all three credit reports. Misinformation, stolen identity and stuff you thought would never come up can and in allot of cases will. I was in the process of paying off my last debt considered a bad mark and along came two new marks (one not of my doing).

You should make it a habit to order your reports at least every six months. These reports should always be free, but unless you live in Colorado, Georgia, Maryland, Massachusetts, New Jersey or Vermont, where you are eligible for a free copy of your credit report ordered by phone or mail every year, you have to fess up $1.00 - $8.50 to see your standard credit report. You can view your report online for $8.50 with Equifax and even get your FICO score for a little additional cost. A small cost for such an important piece of personal information.

Repair your bad credit. Can we say scam?
There are some shady individuals and some companies that claim that they can instantly erase all bad items of credit. Unfortunately this is illegal big time. The practice it called Credit File Segregation and how it works is they obtain a “Employer Identification Number (EIN)” that are set aside for businesses. Problem is most creditors will recognize this and flat out deny your application.

My ID has been compromised
There are several types of credit fraud, many of which involve the illegal use of your credit card numbers, or setting up new accounts in your name. If you suspect ANY improper or illegal activity is taking place, immediately contact each of the credit grantors with whom you have credit.

If they determine that you are indeed a victim of credit fraud, they will give you the phone number to the credit agencies fraud department.

Bankruptcy, they shelter no more
Bankruptcy used to be a last resort for many individuals who were tempted by greedy credit card companies and 2nd and 3rd mortgages on heir homes. Many of these people that get in trouble like that used to be able to seek shelter from the tremendous burden of overwhelming credit. Now don’t give me wrong, they are still responsible, if only on a mental level. But the tactics of some creditors didn’t help the situation, and they too should be held accountable.

Now with Mr. Bush sitting in the big chair, the Bankruptcy laws are about to change in a big way. Thanks to the pandering and contributions of the big creditors like MBNA, he’s about to sign into law a revamped plan that will hurt most low-middle income people in need of this shelter, while not doing much against corporate welfare (read a good CNN article about this).

So it looks like the hay-days of bankruptcy for the common individual person is no more.

Conclusion
Credit in America is easy for many to get, and far to easy to overspend living the American dream. Some credit agencies will go to great lengths to extend you credit that will more likely harm you then help you. With some resolve, you can massage the system and make it work for you rather than against you.

Useful Links and Contact Info

Equifax (https://www.econsumer.equifax.com/)
Equifax Credit Information Services, Inc.
PO Box 740241
Atlanta, GA 30374
By phone, call 1-800-685-1111

Experian (http://www.experian.com/product/consumer)
Experian National Consumer Assistance Center
P.O. Box 2104
Allen, TX 75013-2104
By phone, call 1-888-397- 3742

Trans Union (http://www.transunion.com/)
Trans Union
Post Office Box 2000
Chester, PA 19022
By phone, call 1-800-888-4213