After my ABC News Now interview a few months ago, the cameraman, Chris, asked me a quick credit question. He told me that his goal for the year was to pay down debt, a laudable goal, in my opinion. Paying down debt, after you’ve saved for an emergency fund, is the best thing you can do for your finances. It’s especially important when your, and everyone else’s, personal economic outlook seems grim. Chris paid off and then canceled the first of his cards. He wanted to know whether that hurt his credit score.

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If a recent Your Take post on credit card credit limits is any indication, there’s no secret to getting a higher credit limit on your card. I thought I was high with a near $70,000 credit limit but plenty of people had total unsecured credit limits in the $60,000 – $100,000 range. While it wasn’t a scientific survey, I wouldn’t surprised to read that, in general, unsecured credit limits are much higher than people expect.

That being said, I think a good way for a consumer to protect themselves from the somewhat unpredictable credit score system is by increase their credit limits as much as possible without increasing how many credit cards they have.

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A few years ago I had a little credit report error incident. I just started a new job and was going through a background investigation, which included a review of my credit history. In the course of that review, the investigator noticed that there was an address listing on the report that I hadn’t previously disclosed. The reason I never mentioned the address is because it wasn’t mine.

When he told me, I feared the worst. I thought I was joining the millions of people who have their identity stolen each year. In fact, just a year before that, a friend was telling me how it took him several months to get his identity recovered and even then everything credit-related was a pain. So my mind immediately jumped to ID theft.

Fortunately, it was an isolated, albeit strange, credit report error that was relatively easy to resolve. The error was the addition of an address, a Social Security Number (that differed from my SSN by one digit), and a telephone/cable package. I went through the usual protocols of disputing the information, thinking the onus was on the other party to prove that information was true, but I was wrong.

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Whether it’s driving on the highway or surfing on the information superhighway, I’ve been seeing a lot of ads for credit reports and credit scores. With the economy weak, people are looking to play defense and advertising are looking to capitalize. Like I’ve said in the past, checking your credit report annually is one of the best financial things you can do for yourself.

I have one word of warning for you: Don’t ever go to a company that isn’t Experian, Equifax, TransUnion, or Fair Isaac. Never ever.

Here’s why:

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One of the best financial things you can do for yourself is to regularly check your credit report. Identity theft is a huge business with billions of losses each year, not to mention all the time it takes to unravel the mess, so checking regularly is a great way to catch a theft early. That’s why you saw so many FreeCreditReport.com commercials on TV with the guy playing a guitar and singing about his ID theft woes!

So what’s the deal with them? Weren’t they sued? Is it a scam?

Let’s find out.

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I can’t believe I’ve been using Credit Karma all these months and never wrote up a quick review of the service! I’ve written reviews about their credit score report card, but never about the entire service. Tsk tsk, what a bad blogger I am.

Credit Karma offers a lot of nice juicy information but the only thing I’m really pumped about is the fact that you get your TransUnion credit score absolutely free. When you sign up, you have to provide a lot of sensitive personal information because it’s needed to pull your credit score from TransUnion. Since the service is free, the only barrier to using it is your comfort level with providing this information to a third party.

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In the past I’ve joked about how your FICO credit score has become the new report card for your life. Instead of letter grades, we now get a three digit grade in the form of a credit score. As much as you may hate it, that’s how life works and your credit score has become just that, a grade.

I don’t know if Credit Karma heard me or it’s just a strange coincidence, but they put out a credit report card tool that takes your TransUnion data (all of Credit Karma’s information is based on TransUnion data) and gives you grades on a litany of factors (seven to be exact):

• Credit Card Utilization
• Percent of On-Time Payments
• Average Age of Open Credit Lines
• Total Accounts
• Credit Inquiries
• Total Debt
• Debt to Income Ratio

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I applied for my first credit card as a freshman in college, it was an AT&T branded Citi card that gave me free long distance phone minutes and a few rewards points. I was fortunate to have started building up my credit at the age of eighteen, which would prove to be crucial later on. I was even more fortunate never to have fallen down the credit card debt hole so many college students slip into, in part because I know my mom would’ve been furious.

To help all the rising freshmen, or perhaps the parents of rising freshmen, I offer up these ten rules for smart credit. Some of these are credit card rules and some are simply credit rules, hopefully all of them are helpful. Here are ten tips for students looking to build credit but not credit card debt:
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This week I had the great pleasure of being on ABC News’ Money Matter television program. For nearly seven minutes of LIVE television, I discussed credit reports with host Tanya Rivero. We discussed how often I check my credit reports, the different types of credit inquiries, what’s in your credit report, and how damaging late payments can be on your credit worthiness and credit score.

Click here to watch!

Being on live television was certainly a treat, a bit nerve-wracking, but I think I did alright for my first foray into live television right?

Right?

Please let me know what you think!

The conventional wisdom is that you should check your credit reports at least once a year and your score only when you need it. This morning, I argued in a Devil’s Advocate post that services make it easy (and free, in some cases) to check your score all the time so you might as well do it.

This is part two of a two part Devil’s Advocate, Angel’s Advocate article in which I argue both sides of an issue. This is the Angel’s Advocate post, here is the Devil’s Advocate post where I argue you should be monitoring your credit score all the time!

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