|A consumer educator and advocate, Gerri Detweiler has been helping Americans
solve their credit problems for more than a decade. She is the author of
Ultimate Credit Handbook (Plume, 1993, revised 2003), which was featured in
Money magazine as one of the five best new personal finance books of the
year when released. You can reach Gerri by
visiting her web site
or listening to her
If you are resolving to hop off that debt
treadmill or get your credit in order in 2006, here are my tips to help you
1. Review your statements
If you have run up larger balances than usual, your
credit score may take a dip after the holidays. And that could trigger an
increase in your interest rate on your major credit cards. Check your statements
to confirm your rate. If it's higher than you think you deserve...
2. Check your credit report if you have
not done so in the past year.
AnnualCreditReport.com to get your free annual credit report from all three
3. Clean up your credit
Dispute errors or incomplete information. Credit
reporting agencies must investigate within 30 days to confirm the item or remove
it. Some credit repair firms like to initiate disputes around the holidays in
the theory that they are more likely to fall through the cracks. It's a bit
questionable whether it will work with technology today, but may be worth a
shot. Another tip: Don't close all your old accounts, or your credit score may
4. Ask for a better deal
Credit card companies will be salivating over
consumers' after-holiday credit binges. Now is the time to ask for a lower rate
or threaten to take your balances to another card. Be polite but persistent. The
squeaky wheel will save money! DebtSmart.com’s Scott Bilker is the expert. Take
5. Create your exit plan
If your debt levels are creeping up, look at your
options for paying it back this year. If you can do it yourself, create a rapid
repayment plan and target the highest rate debt first. If you need help,
talk to a reputable
non-profit counseling agency or consider debt settlement or bankruptcy.
As you start preparing for tax time, cleaning up
records etc. make sure you shred documents containing personal information.
Consider using online services to review statements and pay your bills. Research
by the Better Business Bureau has found that consumers who are using online
services to review and pay bills experience one-eighth the fraud losses of those
who rely on paper statements.