Debt and Your Credit: Money Matters

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	Debt and Credit Checklist
	To keep yourself on track to healthier personal finances, start here by setting due dates for your own financial to-dos. Click the button next to each item to add it to your Yahoo! Calendar or print out this checklist of debt and credit to-do's and check off each item as you complete it. Get ready to face your financial fears today! For more information on each item, refer back to Suze Orman's article: " Debt-Defying Moves: Getting Smart with the Money You Don't Have".

Check your credit report now

Maybe you have a bad FICO score because you have done a lousy job managing your credit. But if your score is lousy because of some mistakes, then that's crazy; you're needlessly throwing away money by paying a higher interest rate. Make sure there is no "unpaid" bill being held against you that you know you have paid. Make sure that every item on that credit report belongs to you and that you have not been a victim of Identity Theft.

Raise your credit limit

This advice is only for those of you with strong financial willpower. A large portion of your credit score is determined by calculating how big your monthly bill is compared to the maximum amount of credit you can use. To make this debt-to-credit-limit ratio look even better, call up your credit card issuer and ask for your limit to be boosted. The trick though is that I don't want you to use that extra credit.

Pay your bills on time

This one point bears repeating for your payment history makes up for 35% of your FICO score. Being 30 days late with just one payment can send your score tumbling; so be prompt. And if you can't afford paying the whole bill, at least fork over the minimum amount due. And if you realize that your payment is going if you rely on regular mail, spend the money to get it there overnight.

Call your credit card issuers and ask for a lower interest rate

If your FICO score is in the top range or two there is absolutely no reason to be paying 18 percent. Ask for 10 percent and then negotiate from there. If the issuer balks, just let 'em know you plan on taking your business to a lower rate card. That will usually get them to budge. And make sure the reduction is permanent. If that doesn't work, try using Yahoo! Finance's Savings Finder to find lower-rate cards.

Consider hybrid ARMS

The average homeowner is spending just five or six years in a home before refinancing or moving. If that describes you, then I'd suggest checking out a Hybrid ARM such as a 7/1. What this means is that you get in at a fixed rate for the first seven years before the rate can be adjusted. Right now the average 7/1 charges a 4.7 percent interest rate, compared to 5.7 percent for a 30-year fixed.

Look into refinancing

If for some reason you didn't jump on the refinancing bandwagon the last few years, please check into refinancing if your current mortgage is above 7 percent.

Commit to one extra mortgage payment a year

This translates into huge savings on the interest payments. And I mean huge: you'll avoid paying more than $35,000 in interest on the 30-year. The most painless way to pull this off is to divide your current monthly payment by 12 and then send in that amount each month along with the regular amount. Use Yahoo! Finance's Refinance Calculator to estimate your savings.


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