When homeowners fall behind in their payments, it is often the mortgage servicing company that initiates the foreclosure proceedings. While some borrowers have been successful defending their home due to the servicer or lender being unable to prove it holds the original note, not many people at all are aware of the fact that there are often three servicing companies involved in a foreclosure action.

The first servicer is called the master servicer, and homeowners may never know who it is or have much contact with the company. However, its role is to oversee all of the other servicing operations and companies that will be involved in the mortgage or any foreclosure proceedings.

It is the subservicer that the homeowners will have the most contact with during the time they are making payments on the mortgage. The subservicing company is the institution that collects payments from borrowers and maintains the escrow accounts for paying property taxes and homeowners insurance. If the subservicer does not take care of some of these services in-house, they may contract with tax service professionals and insurance companies, among other.

The third type of servicer is called a special servicer and is typically involved only when homeowners fall behind. After sixty days of late payments, the special servicer may begin loss mitigation attempts or just begin the foreclosure process. Again, this servicing company may contract out some of its functions, including loss mitigation, property inspection, or hiring local attorneys to foreclose on the house.

With all of the allegations of mortgage servicing fraud over the years, including misplacing on time payments, forced placed insurance, underfunding escrow accounts, making late property tax payments, and lying in court to cover up such activities, can anyone really trust these companies? They act like glorified collection agencies in harassing borrowers and actually make more money from defaulted loans.

Mortgage servicing companies are generally paid a flat fee based on the borrowers’ monthly payments, usually 0.5% of all payments collected. But they are given a huge incentive to take advantage of unsuspecting homeowners because they retain 100% of any late payment charges or other fees. So the servicer has no incentive to help homeowners and make sure they pay on time or keep accurate records.

However, the companies have every incentive to “lose” payments and tack on a late fee. They have every incentive to put forced insurance on a home through an affiliated company, raise the monthly payment, and charge fees. They have every incentive to underfund escrow accounts, take money from the regular monthly payment to make up the shortfall at tax time, and then slap on a late charge to the account.

Servicing companies can provide a valuable service in the mortgage market by making it easier for lenders to engage in other business than collecting payments and administering accounts. But when these companies are given huge incentives to treat homeowners like deadbeats or turn them into foreclosure victims, one has to wonder what side the banks that hire these companies and agree to these terms are on.
Homeowners interested in loan modification, foreclosure refinancing, deed in lieu, and other options to avoid foreclosure can find all the information they need by visiting Nick’s ForeclosureFish website. Visit the site while you still have time to figure out a solution to save your home before the bank has it sold out from under you at a foreclosure auction. Hundreds of articles of information, options, and general advice can be researched at the website, which can be located here: http://www.foreclosurefish.com/

Have A Plan For Your Money Or Someone Else Will

New Ways Bankers Are Spying on You
Wall Street Journal

Big Banker is watching you—more closely than ever.

With lenders still skittish about making new loans, credit bureaus and others are hawking services that help banks probe deeply into your financial closet. The new offerings include ways to look at your rent and utility payments, figure out your income, gauge your home’s value and even rate your banking habits based on details like whether your direct deposits have stopped.

All of this could influence your financial freedom—not to mention the number of junk-mail solicitations you receive.

Ken Lin, CEO of Credit Karma, a credit-score information website, knew he had a good credit score. But when he recently applied for a new credit card, he was rejected: The lender had flagged him as a higher credit risk because the value of his California home had declined and his mortgage principal wasn’t declining—giving away that he has an interest-only mortgage.

“It’s a lot more than just your credit score today,” he says.

Your credit record still matters, of course. But here are some newer ways lenders and financial-services companies are sizing up your financial behavior and credit-worthiness:

• Bank-depositor behavior scores. Fair Isaac, the creator of the widely used FICO credit score, is marketing bank-depositor behavior scores, which are used by banks to assess their own customers.

The scores are based on balances, deposit records and withdrawal activity, says Debb Gordon, a senior principal consultant at Fair Isaac.

Unlike credit scores—which are most affected after payments are late or credit is maxed out—behavior scores can be a leading indicator of credit risk. They also can help banks identify which of their customers might be ripe for additional services and rewards programs and which might need special attention because, for instance, their direct deposits had stopped.

• Income estimation. This business took off earlier this year after the Federal Reserve allowed lenders to use credit bureaus’ income estimates to satisfy new requirements that credit-card applicants show the ability to pay their debts.

The bureaus use credit-record information, such as the size of your credit lines and the age and size of your mortgage, and plug it into models to predict your earnings. Those estimates also may be used to double-check the income you report on credit applications or to determine if you should be preapproved for credit.

You can’t see those estimates. But if you are denied credit because of them, you must be given a chance to provide additional information.

• Rent payments. An estimated 40 million consumers, including young people and people who prefer to pay in cash, have too little credit experience to generate a useful credit score. But they are likely to pay rent or utility bills, which could help credit bureaus better assess their credit-worthiness.

Experian, one of the three major credit bureaus, bought RentBureau—which collects rental-payment data from large property managers—and expects to integrate that information into credit records before the end of the year.

Even if those consumers don’t want credit, that information could help them win better rates from insurers, which may use insurance scores based on credit records, and fatten up thin credit files, which some employers check before making hiring decisions.

Credit bureaus say they also would like to offer data on cellphone payments, but have run into concerns over privacy issues, which may require legislation to untangle.

• Collection triggers. If you owe money, you can run, but you can’t hide. Credit bureaus can now send daily reports to collection companies when a debtor’s financial status changes—say, if new employment information appears or if a debt starts to decline. A drop in credit use would indicate that the consumer has more capacity to pay and a better chance of repaying other outstanding debts.

• Home values. As home values have plummeted and foreclosures have soared in many states, lenders of all stripes have become more cautious, as Mr. Lin found. Using home values as a factor in credit decisions doesn’t appear to be widespread, but it may come into play when someone in, say, Nevada or California applies for a new loan. Of course, it also could work in your favor if you are one of the roughly 25 million Americans who owns a home outright.

• Your wealth. Information about your assets other than homes and cars, which aren’t part of the credit record, may soon play a bigger role in your financial life. With a better sense of a consumer’s balance sheet, lenders might be able to target potential customers better and also have a fuller sense of their likely risk. Equifax, another of the big three credit bureaus, offers financial-service providers an estimate of liquid wealth as part of a financial “suite” of information.

As all of this becomes a widespread practice, those who are prompt and careful in all aspects of their financial life may have more options—and those who have been sloppy with, say, their bank accounts may be penalized for that.

Write to Karen Blumenthal at karen.blumenthal@wsj.com

66 Painless Ways to Save Money

“Trust in the LORD with all thine heart; and lean not unto thine own understanding.
In all thy ways acknowledge him, and he shall direct thy paths.”

For several weeks I have wrote about the Resurrection of Your Finances. Last week
was a week of interaction between readers. Interaction was light but hopefully
more people will dive in and get their feet wet this week.

To continue the topic of Resurrection of Your Finances I am going to give you 66
painless ways to save money. I will give you about 12 a day so you can absorb
them.

Since we have learned that everything we have is God’s, let us be good stewards
with what He has given us.

I would like to get the number of tips to at least 101, so if you have some money-
saving suggestions, please leave a comment.

I have a WordPress blog so you must register with WordPress to be able to leave a
comment. If you do not feel comfortable doing that just send me an email at Contact Us.

Let’s help one another.

Save Money on Transportation

Airline Fares

1. You can lower the price of a roundtrip air fare by as much as
   two-thirds by making certain your trip includes a Saturday
   evening stayover, and by purchasing the ticket in advance.
2. To make certain you have a cheap fare, even if you use a
   travel agent, call all the airlines (or check online) that fly where you want to go
   and ask what the lowest fare to your destination is. 
3. Keep an eye out for fare wars. Be prepared to act quickly. 

Car Rentals

4. Since car rental rates can vary greatly, shop around for the
   best basic rates and special offers. 
5. Rental car companies offer various insurance and waiver
   options. Check with your insurance agent and credit card company
   in advance to avoid duplicating any coverage you may already
   have. 

New Cars

6. You can save thousands of dollars over the lifetime of a car
   by selecting a model that combines a low purchase price with low
   financing, insurance, gasoline, maintenance, and repair costs.
   Ask your local librarian for new car guides that contain this
   information. 
7. Having selected a model, you can save hundreds of dollars by
   comparison shopping. Call at least five dealers (or check online) for price quotes
   and let each know that you are calling others. 
8. Remember there is no “cooling off” period on new car sales.
   Once you have signed a contract, you are obligated to buy the
   car. 

Used Cars

9. Before buying any used car:
        a. Compare the seller’s asking price with the average retail
   price in a “bluebook” or other guide to car prices found at many libraries, banks, and credit unions.
        b. Have a mechanic you trust check the car, especially if the car is sold “as is.” 
10. Consider purchasing a used car from an individual you know and
    trust. They are more likely than other sellers to charge a lower
    price and point out any problems with the car.

 Auto Leasing

11. Don’t decide to lease a car just because the payments are
    lower than on a traditional auto loan. The leasing payments may
    be lower because you don’t own the car at the end of the lease. 
12. Leasing a car is very complicated. When shopping, consider
    the price of the car (known as the capitalized cost), your trade-
    in allowance, any down payment, monthly payments, various fees
    (excess mileage, excess “wear and tear,” end-of-lease), and the
    cost of buying the car at the end of the lease. 

Gasoline

13. You can save hundreds of dollars a year by using the lowest-octane called for in your owner’s manual.
14. You can save up to $100 a year on gas by keeping your engine
    tuned and your tires inflated to their proper pressure. 

Car Repairs

15. Consumers lose billions of dollars each year on unneeded or
    poorly done car repairs. The most important step that you can
    take to save money on these repairs is to find a skilled, honest
    mechanic. Before you need repairs, look for a mechanic who:
         * is certified and well established;
         * has done good work for someone you know; and
         * communicates well about repair options and costs. 

Save Money on Insurance

Auto Insurance

16. You can save several hundred dollars a year by purchasing auto
    insurance from a licensed, low-price insurer. Call your state
    insurance department for a publication showing typical prices
    charged by different companies. Then call at least four of the
    lowest-priced, licensed insurers to learn what they would charge
    you for the same coverage.
17. Talk to your agent or insurer about raising your deductibles
    on collision and comprehensive coverages to at least $500 or, if
    you have an old car, dropping these coverages altogether.
    Taking these steps can save you hundreds of dollars a year.
18. Make certain that your new policy is in effect before dropping
    your old one. 

Homeowner Insurance

19. You can save $100 or more a year by purchasing homeowner
    insurance from a low-price, licensed insurer. Ask your state
    insurance department for a publication showing typical prices
    charged by different licensed companies. Then call at least four
    of the lowest priced insurers to learn what they would charge
    you. If such a publication is not available, it is even more
    important to call at least four insurers for price quotes.
20. Make certain you purchase enough coverage to replace the house
    and its contents.
21. Make certain your new policy is in effect before dropping your
    old one. 

Life Insurance

22. If you want insurance protection only, buy a term life
    insurance policy.
23. If you want to buy a whole life, universal life, or other cash
    value policy, plan to hold it for at least 15 years. Cancelling
    these policies after only a few years can more than double your
    life insurance costs.
24. Check your public library for information about the financial
    soundness of insurance companies and the prices they charge. Consumer Report magazines are a
    valuable source of information about a number of insurers. 

Save money on Banking/Credit

Checking

25. You can save more than $100 a year in fees by selecting a
    checking account with a minimum balance requirement that you can,
    and do, meet. 
26. Banking institutions often will drop or lower checking fees if
    paychecks are directly deposited by your employer. Direct
    deposit offers the additional advantages of convenience,
    security, and immediate access to your money. 

Savings and Investment Products

27. Before opening a savings or investment account with a bank or
    other financial institution, find out whether the account is
    insured by the federal government. An increasing number of
    products offered by these institutions, including mutual stock
    funds and annuities, are not insured. 
28. To earn the highest return on savings (annual percentage
    yield) with little or no risk, consider certificates of deposit
    (CDs) and treasury bills or notes. 
29. Once you select a type of savings or investment product,
    compare rates offered by different institutions. These rates can
    vary a lot and, over time, can significantly affect interest
    earnings. 

Credit Cards

30. You can save as much as several hundred dollars each year in
    lower credit card interest charges by paying off your entire bill
    each month. 
31. If you are unable to pay off a large balance, switch to a
    credit card with a low annual percentage rate (APR). 
32. You can reduce credit card fees, which may add up to more than
    $100 a year, by getting rid of all but one or two cards, and by
    avoiding late payment and over-the-credit limit fees. 

Auto Loans

33. If you have significant savings earning a low interest rate,
    consider making a large down payment or even paying for the car
    in cash. This could save you as much as several thousand dollars
    in finance charges. 
34. You can save as much as hundreds of dollars in finance charges
    by shopping for the cheapest loan. Contact several banks, your
    credit union, and the auto manufacturer’s own finance company. A 0% interest loan is not necessarily your best loan. See New Cars section above. 

First Mortgage Loans

35. You may save tens of thousands of dollars in interest charges
    by shopping for the shortest-term mortgage you can afford. On a
    $100,000 fixed-rate loan at 8% annual percentage rate (APR), for
    example, you will pay $90,000 less in interest on a 15-year
    mortgage than on a 30-year mortgage. 
36. You can save thousands of dollars in interest charges by
    shopping for the lowest-rate mortgage with the fewest points. On
    a 15-year, $100,000 fixed-rate mortgage, just lowering the APR
    from 8.5% to 8.0% can save you more than $5,000 in interest
    charges. On this mortgage, paying two points instead of three
    would save you an additional $1,000. 
37. If your local newspaper does not periodically run mortgage
    rate surveys, call at least six lenders for information about
    their rates (APRs), points, and fees. Then ask an accountant to
    compute precisely how much each mortgage option will cost and its
    tax implications. 
38. Be aware that the interest rate on most adjustable rate
    mortgage loans (ARMs) can vary a great deal over the lifetime of
    the mortgage. An increase of several percentage points might
    raise payments by hundreds of dollars per month. 

Mortgage Refinancing

39. Consider refinancing your mortgage if you can get a rate that
    is at least one percentage point lower than your existing
    mortgage rate and plan to keep the new mortgage for several years
    or more. Ask an accountant to calculate precisely how much your
    new mortgage (including upfront fees) will cost and whether, in
    the long run, it will cost less than your current mortgage.  

Home Equity Loans

40. Be cautious in taking out home equity loans. These loans
    reduce the equity that you have built up in your home. If you
    are unable to make payments, you could lose your home.  
41. Compare home equity loans offered by at least four banking
    institutions. In comparing these loans, consider not only the
    annual percentage rate (APR) but also points, closing costs,
    other fees, and the index for any variable rate changes.  

Save Money on Housing

Home Purchase

42. You can often negotiate a lower sale price by employing a
    buyer broker who works for you, not the seller. If the buyer
    broker or the broker’s firm also lists properties, there may be a
    conflict of interest, so ask them to tell you if they are showing
    you a property that they have listed.  
43. Do not purchase any house until it has been examined by a home
    inspector that you selected.  

Renting a Place to Live

44. Do not limit your rental housing search to classified ads or
    referrals from friends and acquaintances. Select buildings where
    you would like to live and contact their building manager or
    owner to see if anything is available.  
45. Remember that signing a lease probably obligates you to make
    all monthly payments for the term of the agreement.  

Home Improvement

46. Home repairs often cost thousands of dollars and are the
    subject of frequent complaints. Select from among several well
    established, licensed contractors who have submitted written,
    fixed-price bids for the work.
47.  Do not sign any contract that requires full payment before
    satisfactory completion of the work. 

Major Appliances

48. Consult Consumer Reports, available in most public libraries,
    for information about specific brands and how to evaluate them,
    including energy use. There are often great price and quality
    differences among brands. 
49. Once you’ve selected a brand, check the phone book or check online to learn
    what stores carry this brand, then call at least four of these
    stores for the prices of specific models. After each store has
    given you a quote, ask if that’s the lowest price they can offer
    you. This comparison shopping can save you as much as $100 or
    more. 

Save Money on Utilities

Electricity

50. To save as much as hundreds of dollars a year on electricity,
    make certain that any new appliances you purchase, especially air
    conditioners and furnaces, are energy-efficient. Information on
    the energy efficiency of major appliances is found on Energy
    Guide Labels required by federal law. Check with your electric
    utility to learn if it has a program to help reduce the costs of
    any appliance purchases. 
51. Enrolling in load management programs and off-hour rate
    programs offered by your electric utility may save you up to $100
    a year in electricity costs. Call your electric utility for
    information about these cost-saving programs. 

Home Heating

52. A home energy audit can identify ways to save up to hundreds
    of dollars a year on home heating (and air conditioning). Ask
    your electric or gas utility if they can do this audit for free
    or for a reasonable charge. If they cannot, ask them to refer
    you to a qualified professional. 

Local Telephone Service

53. Check with your phone company to see whether a flat rate or
    measured service plan will save you the most money. 
54. You will usually save money by buying your phones instead of
    leasing them. 
55. Check your local phone bill to see if you have optional
    services that you don’t really need or use. Each option you drop
    could save you $40 or more each year. 

Long Distance Telephone Service

56. Long distance calls made during evenings, at night, or on
    weekends can cost significantly less than weekday calls. 
57. If you make more than a few long distance calls each month,
    consider subscribing to a calling plan. Call several long
    distance companies to see which one has the least expensive plan
    for the calls you make. 
58. Every few months, comparison shop to see if you’re paying too much for your telephone calling plan. If you find a better deal, contact your phone company and negotiate — or switch. 

Save Money on Everything Else

Food Purchased at Markets

59. You can save hundreds of dollars a year by shopping at the
    lower-priced food stores. Convenience stores often charge the
    highest prices. 
60. You will spend less on food if you shop with a list. 
61. You can save hundreds of dollars a year by comparing price-
    per-ounce or other unit prices on shelf labels. Stock up on
    those items with low per-unit costs. 

Prescription Drugs

62. Since brand name drugs are usually much more expensive than
    their generic equivalents, ask your physician and pharmacist for
    generic drugs whenever appropriate. 
63. Since pharmacies may charge widely different prices for the
    same medicine, call several. When taking a drug for a long time,
    also consider calling mail-order pharmacies, which often charge
    lower prices. See Consumer Reports
    (available in most public libraries) for a list of several of
    these pharmacies and their toll-free phone numbers. 

Funeral Arrangements

64. Make your wishes known about your funeral, memorial, or burial
    arrangements in writing. Be cautious about prepaying because
    there may be risks involved.  
65. For information about the least costly options, which could
    save you several thousand dollars, contact a local memorial
    society, which is usually listed in the Yellow Pages under
    funeral services or you can do an online Google search for funeral services in your local area. 
66. Before selecting a funeral home, call several and ask for
    prices of specific goods and services, or visit them to obtain an
    itemized price list. You are entitled to this information by law
    and, by using it to comparison shop, you can save hundreds of
    dollars. 

Kingdom Focused,

Flora M. Kynard, author of
Prosperity Renewal: 14 Biblical Principles for True Financial Freedom

7 Ways to Sock Away Emergency Cash

Not having an emergency fund is the first step into the deep hole of debt.

With the economy forcing people to take a hard look at their finances, more people are realizing that they need to create an emergency fund, but how do you find the money to begin an emergency fund when you are just making ends meet?

Here are seven simple ways to find money to begin an emergency fund, which will allow you to create that all-important buffer for your finances.

1. Rearrange Your Current Costs
The least painful way to create an emergency fund is to rearrange the way you currently spend your money without actually giving up anything.

Chances are that you are paying much more than you need to be for a lot of the services you currently subscribe to such as cable TV, Internet access and phone service.

Calling these services with a competing offer in hand and asking for a better deal will often reduce the amount you are paying while keeping the exact same services you currently get.

The same can be done with home and car insurance as well. It usually costs companies much more money to find a new customer than it does to give you a discount, so they are often willing to give discounts to keep you from going to the competition.

You can then take the money you save to begin your emergency fund.

2. Play Saving Games
There are a number of saving games that you can play to get your emergency fund started. The most common of these is creating a money jar where you empty all your loose change at the end of each day, and collect the money at the end of the month to use for your emergency fund.

A wide variety of money games like this can serve the same purpose.

3. Increase Your Income

If you have already tapped all the ways that you know how to save money, another option is to make some extra money.

There are a number of ways that you can accomplish this, including finding a part-time job, doing freelance work or starting your own side business.

You can begin a number of jobs that cost very little money to create, and the extra money gained can become your emergency fund.

4. Sell Stuff

In all likelihood, you have way more stuff in your home than you need. A simple walk around you home looking into the closets, garage and other storage spaces should readily confirm this.

If you haven’t used it in the past year, you probably don’t need it. Instead of keeping it in storage and letting it gather dust, have a garage sale, put it up for sale on Craigslist or list it as an auction on eBay.

Set aside any money earned to initiate your emergency fund.

5. Pay Yourself

The reason that the IRS takes money out of people’s paycheck each month is because if they didn’t, they know that most people wouldn’t have the money to pay their tax bill come April 15. They want to make sure they get their money, so they take it upfront.

You should have the same attitude with your emergency fund and pay yourself first when your paycheck arrives. Have a set amount taken out of each paycheck before you pay any other bills that gets transferred into your emergency fund.

Another way to accomplish the same goal is to finish paying off a recurring bill such as a credit card or car payment. Instead of using this newly freed up money to buy new things, keep paying it, but this time to yourself earmarked for your emergency fund.

6. Set Up an Account

When setting up an emergency fund, you will want to open up a separate account so that the emergency fund money isn’t mixed in with your regular spending money since mixing makes it much easier to spend the emergency fund money on nonemergency things.

Online banks often offer money promotions for opening accounts, which can get your emergency fund started just for setting it up.

7. Pay Yourself for Things You Use

One of the easiest ways to always have an emergency fund available is to learn to pay yourself to use things you already own.

Getting into this habit ensures you have a mini emergency fund for all the things you use on a regular basis and puts you in a position of never having to buy things on credit again.

Embrace one of the above ways to begin the emergency fund, and give yourself a bit of breathing room.

* excerpt from Jeffrey Strain article at TheStreet.Com.

As lending requirements tighten even for the most responsible consumers credit scores are becoming increasingly more important. In order to get a loan these days, a consumer’s score not only needs to be healthy, it needs to be in fighting form.

Today, a FICO credit score of 750 or higher is considered the gold standard among lenders, says Ben Woolsey, director of marketing and consumer research at CreditCards.com, whereas in the past borrowers with scores of 720 or higher could land the best rates (FICO scores range between 300 and 850).

Banks are only lending to people with stellar credit and I think that will continue for some years, says Linda Sherry, spokeswoman for consumer advocacy group Consumer Action.

Those whose score falls well below this all-important 750 level can expect to hit some hurdles. They may have a harder time getting decent rates on a mortgage or student loan.

The problem is there are all sort of ways your score can get decimated and we’re not just talking about an overdue bill. Some strikes come unexpectedly and the damage is done before you know it. To prevent any surprises, here are five not-so-obvious ways your credit score can get tarnished:

Too Many Inquiries

Each time a lender looks into your credit history, the credit agencies take note. If too many creditors start dipping into your file within a certain timeframe — say six months to a year — it starts to have a negative impact on your credit score, explains Gerri Detweiler, credit advisor for Credit.com.

The problem here is that consumers don’t always realize when their credit is checked. If, for example, you shop for a new cellphone plan, the service provider will typically check your credit report and use the information in its decision to sign you up. Most utilities, including cable providers, fall into this category, as do (surprisingly) car-rental agencies. An inquiry shows on your credit report and can degrade your score if you actively sought out the credit relationship; inquiries made unsolicitedly (like when you receive a credit-card offer in the mail) won’t hurt your score, says Craig Watts, spokesman for Fair Isaac.

Similarly, when shopping for a mortgage or auto loan, Sherry advises that consumers apply for loans within a 30-day period. The FICO scoring model recognizes that if you go out to six car dealerships within two or three weeks and they all pull your credit, it’s seen as shopping for one car, not six, says Sherry. But if you visit six different dealerships over a span of several months, it might look like you’re shopping for six cars. You want to take your time but not too much, she says.

Small, Unpaid Debts

Believe it or not, that parking ticket you put off paying can come back to haunt you. The same things goes for the movie you returned a week late to Blockbuster and the book you borrowed from the library in 1999. After a certain period of time has passed, some cities will turn a bunch of unpaid debts over to a collection agency. The agency pursues the overdue amounts, and when a collection agency record shows up on your credit report, it will absolutely hammer your credit score, says Watts.

Store Credit Cards

Landing a 15% discount on that new winter coat — just for signing up for a Banana Republic store card — can be really tempting. The problem, though, comes when the collection of cards in your wallet look like the store directory at the mall. All those cards for individual retailers means you have a lot of open lines of credit, which the credit bureaus tend to view as potential trouble, especially when the cards aren’t affiliated with a national provider such as MasterCard or Visa, says Woolsey. The negative impact on your credit score will most likely outweigh those one-time discounts at the store, he says, not to mention that APRs on retail cards can reach as high as 26%.

Authorized Users

Whether it’s to make sure their college-age son or daughter can access emergency funds or pay for a hotel room over spring break, many parents add a child to their credit-card accounts as an “authorized user.” This means the principal cardholder (in this case, let’s say the mother) allows her son to use the account, but does not hold him responsible for making the payments. For the most part, it’s a win-win situation for the son. He not only gets to put pizzas for his friends on the family plastic, he also gets the added benefit of building up his short credit history. But if Mom is late paying the bill even one time, her credit score will drop and so will her son’s, says Watts.

Name Changes

Something as innocuous as a middle initial can impact your credit score for the worse. Say you’re known as Jenny E. Smith on your credit report. You apply for new credit one day and drop the E, or decide to go with Jennifer instead (or you take your husbands name). The credit bureau will create a separate file for you even though Jenny E. Smith and Jenny Smith both live at the same address, says Watts. To prevent these kinds of errors from spoiling your credit score, notify your creditors and the credit bureaus of any name change, says Watts, and make sure they understand you’re the same person.

*excerpt from October 20, 2008 article by Lisa Scherzer at SmartMoney.com. All Rights Reserved.