Be careful of how much debt you carry. A mortgage is OK, but creditors will generally give you a bigger loan than you can really afford. An automobile loan is OK, but recognize that an automobile can depreciate faster than you can pay the loan – it sure isn’t an investment, it’s pure expense. One credit card is OK for purchase convenience, not carrying a balance. If you have all three of these, you don’t need any more. I’m tired of getting pre-approved offers in the mail literally twice a week all year long.
Also be careful of how much personally identifiable information you disclose. If a web site asks for my birthday for marketing purposes, I won’t give it. If they require it, I will give a fake one. If you’ve talked to anyone hit by identity theft, you don’t want to experience it yourself.
For these purposes, I have asked the credit bureaus to freeze my personal information so it isn’t disclosed to lenders. Since lenders need to know my credit worthiness before approving credit, this means no credit can be opened in my name. Right now I have all the credit I need and don’t need more. This also prevents someone else from obtaining credit in my name without my approval, i.e. identity theft. If I do need to get more credit, I can unfreeze just long enough for the new lender to approve me, then it goes back to a frozen state.
Clark Howard has some good pointers on how to freeze your credit information. You need to do it with each of the three credit reporting bureaus. All it takes is a letter and $10 for each one. Clark even provides the form letter. My requests were processed in about one week. Frankly, I recommend everyone do this. Recognize that the credit bureaus are in the business of selling your credit information to lenders, and lenders are in the business of getting interest and fees from you. Nobody is in business for you except yourself.
You also are entitled to a yearly credit report for free. Get your free report each year to make sure it is accurate. Then when you need credit, there won’t be any surprises. Start with the US Federal Trade Commision web site to make sure you go to the right site that offers the free credit report (there are copycats/imposters out there that may require costs).
Keep your finances in order and you’ll avoid a lot of pain.
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Transunion is now offering a credit freeze at no cost, even if your state’s law doesn’t require the fee to be waived. Take a look at their website.