Here is some food for thought: you’re planning to renovate your home or take out a loan to pay for a new car. You’ve done extensive research on what you want and, in the case of a home improvement project, you’ve chosen the contractor, drawn up plans, and priced those new kitchen cabinets and counter tops you want.

One thing remains undone, an important step that could scuttle your dreams: your credit could be trashed, thanks to the work of an identity thief or because of a mistake made by the credit bureau. Yes, you’ve done your homework but you forgot one key step: checking your credit reports to see if they are accurate and reflect current information.

Your credit report is a vital part of consumer lending and, thanks to an act of Congress, is free when ordered through Annual Credit Report, a website managed by the three primary credit reporting agencies, Experian, Expedia, and TransUnion. Once annually, you can get one copy each from the three agencies of your credit report for free and optionally pay the $4-8 fee to get your credit score. Yes, pay the money for your credit score because that is the number creditors use to determine if you qualify for a loan and at what rate.

Checking your credit reports regularly makes sense, but what about other services which keep tabs on you? Though credit reporting bureaus are the most important way to get “the goods” on you, there are some other organizations who keep tabs on you, namely:

Insurance — Your medical history or your homeowner’s policy could be information that insurers want. Several companies keep tabs on this stuff including MIB and Choice Trust.

Tenancy – If you’ve rented before and left your landlord high and dry, don’t think for a moment that this decision won’t come back to haunt you. SafeRent and ChoicePoint know what you did and they’re more than willing to share this information with a landlord, for a fee of course.

Job — Acxiom and ChoicePoint keep tabs of your employment history, but you could be aiding them with your online resume through Monster or CareerBuilder.

Banking — Have you written a hot check lately? Probably not, but opening up a checking account is serious business. That’s why TeleCheck, ChexSystems, and SCAN keep track of good and bad deposit information.

If a problem does come up,  the credit reporting bureau or other credit checker must allow you to address the mistake or correct a problem. Most of the companies I’ve mentioned will provide that information to you for free, but you have to ask in order to get it.

Don’t wait until after you set your home improvement or other consumer project in motion before checking your credit reports. To delay means you’ll really pay, but certainly not in a good way!

Tags: banking, credit history, credit score, employment, free credit report, insurance, tenancy

There are thousands upon thousands of credit cards available to consumers, a dizzying array of choices virtually impossible to compare side by side. Airline rewards cards, cash back cards, affinity cards, rebate cards, you name it — you could spend a considerable amount of time comparing offers and then realize that the original offers changed while new ones have sprung up.

If you are someone who never has had credit previously, then getting a Visa or MasterCard can be nearly impossible to do. Both cards are for people who have an established credit history, but there is one way to get these cards even if you have no credit whatsoever. These are what are known as no credit credit cards.

No Credit — What You Can Expect

Without credit, your no credit credit card has certain stipulations that the average credit card doesn’t have including:

• Enrollment fee. To be considered for a no credit credit card, you’ll need to pay a one-time enrollment fee which is usually equal to your annual membership fee.

• Annual membership fee. Expect to pay between $69 and $99 yearly to maintain this card.

• Low credit line. You’ll start off with a low credit line, usually $1000, sometimes a lot less.

• Ultra high interest rate. Most credit cards charge an interest rate of 9 to 18 percent, but your rate will be closer to 24%, even higher. You are considered a greater credit risk, thus the higher rate.

• Closed account fee. Even if you decide to close your credit card account, you could be charged a monthly maintenance fee until your balances are paid off. This fee averages $3 per month on top of your outstanding balance and interest rate charges.

In all, just to get your foot in the door, you’ll have to pay at least $138 for a credit card that offers to you a high interest rate, very low credit line, and other consumer unfriendly features.

There Must Be A Better Way

For consumers desiring to build up credit, there are better ways to achieving that goal besides getting hosed by a no credit credit card deal. These include:

• Store Cards — Some department stores still offer their own charge cards and their credit terms are very relaxed. Usually, all you have to do is show your driver’s license and you’re approved. Make regular purchases and pay off balances in full for six months and you should be able to apply and be approved for a regular Visa or MasterCard.

• Buy A Car — If you can put a significant amount of money down, 20% or more, you could purchase a new car and have the financing company hold your note. You may have to pay a higher interest rate than the average consumer, but by making steady payments on time, your credit history will be built up quickly.

• Personal Loans — Belonging to a credit union can be helpful to building your credit. Consider taking out a small loan, even just $1000 and pay that amount back within three or four months. That activity will show up on your credit report, which will qualify you for a better credit card.

Sure, you could do without a major credit card if had to but if you like the convenience of using plastic and would prefer not to carry around a lot of cash, then a credit card is right for you. Just avoid the no credit credit card — a bad deal for all consumers!

Tags: credit history, credit report, MasterCard, no credit credit card, personal loans, Store cards, VISA