Brent’s Credit and Debt blog

Recently, credit card companies have become real sticklers about your credit line.  In fact, they are often reducing your credit limits, as you can see in my blog entry Why Did My Credit Card Company Reduce My Credit Limit?

If you are a good customer, however, shouldn’t you be able to get your limits raised?  If you have made your payments on time, and kept your balance below your limit, your credit issuer should consider you a good source of credit, right?

Well, not any more.  Becky, who had the problem with her JC Penney card in the blog post above, just got a letter from GE Money bank.  GE Money Bank wrote to let Becky know that she would not be getting a credit line increase.  She hadn’t asked for an increase, but they thought they should tell her she couldn’t have one anyway.

Becky has been making her minimum payments, hasn’t been using the card, and hasn’t been late on a payment.  Her balance isn’t shrinking much because she is making the minimum, but that is what you are supposed to do, right?

Nope.  Now, you have to pay aggressively.  It seems that the credit card companies don’t want to see you carry a high balance any more.  That is just too risky.  They want their money paid back quickly so they can make sure your account doesn’t turn into another default on their books.

Here is what GE Money Bank said about Becky’s account:

1)      Average percentage of credit limit used on this account over most recent 3 months.

2)      Number of months this account has been open.

3)      Percentage of times payment greater than amount due over last 12 months for this account.

4)      Low ratio of payments to amount due over last 6 months on this account.

What does this mean?  Let’s take them in order:

1)      Average percentage of credit limit used on this account over most recent 3 months.

Here, they are saying her current balance is too high.  She needs to drop the balance of the account.

2)      Number of months this account has been open

The account history isn’t long enough for the creditor to feel comfortable.  Becky has had the card for about 18 months (she got it before Christmas 2007).  They apparently want more of a credit history than she can offer.

3)      Percentage of times payment greater than amount due over last 12 months for this account.

Becky has been making minimum payments to prove she will always pay on time and that she is a good credit consumer.  Apparently, giving a creditor a lot of interest isn’t enough.  She needs to pay more on her account than the minimum every month to prove she has the means to pay the card off faster.

4)  Low ratio of payments to amount due over last 6 months on this account.

As with number 3, they want more money.  How much is enough?  Well, 4% is about what they charge as a minimum.  I would suggest 10% as a good starting point, and you can pay a bit more or less depending on your personal financial situation.  Of course, you can always call your individual creditor and see if they will give you a percentage to follow.

As with anything else, the rules change over time.  You need to pay a bit more now than the minimum required, and you need to keep your balance lower, in order to have a good credit standing with a creditor.  Unless you do this, your chances of getting a higher credit limit are greatly reduced.

I normally don’t like the New York Times.  They seem to have a seriously biased slant to their reporting, and I prefer a more balanced view of things.  However, in this case, one of their reporters has things dead on.

Susan Saulny, a writer for the New York Times, has written a story about a new problem with Foreclosure:  The bank may not want your property back!

In some cases, the cost of the foreclosure exceeds the value of the property.  In that case, the lender may not go through with the foreclosure, which means the holder of the title (the current homeowner) is liable for the property.

The real problem, though, is that in some cases the former owner moves out, but when the foreclosure stops, the former owner is liable for the property.  In the article, Ms. Saulny goes on to explain that this liability may include fines if the home is not kept up, as well as other fees.

The rest of this story is available here:

http://www.nytimes.com/2009/03/30/us/30walkaway.html

That’s it.  The Top 10 Ways to Protect Your Credit During Divorce.

Your life is already tough.  Going through a divorce is one of the hardest things you will ever do.  It touches every part of your life, and you need to protect yourself while going through it.

Remember, it is you taking care of yourself now.  You HAVE to stop thinking about things as a member of a couple, and start thinking about things as a single person again.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Conclusion video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

I found an interesting article today on MSNBC about a $38.00 cup of coffee.

Banks are increasingly covering overdrafts, and charging a large fee for the ‘privilege’ of not having a bounce on your account.

Now, personally, I would rather not be able to pay for something than have to eat a $34.00 fee from my bank.  But the banks don’t always give you that option.

Take a look at the article and let me know what you think.

http://www.msnbc.msn.com/id/29879567/

In Tip 1, I am asking you to start managing your money.  This is critical!  You are starting fresh, and it is very easy right now to damage your credit.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 1 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 2, I discuss the danger in assigning your legal rights to someone else with a power of attorney.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 2 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 3, I discuss your financial picture during the divorce process.  If you aren’t awarded enough money to live on, you need to say something.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 3 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 4, I discuss how taking care of your financial obligations will help you to move ahead after your divorce. .

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 4 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 5, I discuss how paying off joint accounts may cost you money while letting your spouse off the hook.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 5 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.

In Tip 6, I discuss how changing your spending habits now can help you in your new life, especially if your financial status will change.

I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce.  Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!

You can view the Tip 6 video here: 

Remember to ask your questions about credit and debt in the form to the right.  I will answer via blog or video as soon as I can!

When you fill out the form, your question goes straight to my email inbox.  I am an email addict, so I will see it quickly.  If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.