Opting out of junk mail

Over the Thanksgiving holiday, my relatives started talking about how they were so sick of receiving handfuls credit card offers in the mail each day. Once again, I reminded them that stopping these credit card offers is a simple as calling 1-888-5-OPT-OUT. I give out this toll-free phone number so often these days that I now have it memorized!

Give yourself an early Christmas present, call 1-888-5-OUT-OPT or go online to the official FTC opt out website to remove your name from the credit bureau third party mailing lists. This opt out program even includes the elusive Innovis, that is commonly called the "forth credit bureau." Opting out doesn't make it harder for your to apply and open new accounts. It just means that you will have to go looking for credit card and loan offers on your own instead of being bombarded by them in the mail each day. Leaving you with more room in the mailbox for Christmas cards and gifts this holiday season.

Healthy holiday credit

Gerri Detweiler, a CreditBloggers.com contributor and personal finance guru, appeared on NBC Nightly News with Brian Williams last night. The segment was about using your credit cards responsibly during the holiday shopping season:

"Your credit is more important than ever," says credit expert Gerri Detweiler, author of "The Ultimate Credit Handbook." "It may determine not only what you pay for loans," she says, "but also what you pay for auto insurance, homeowner’s insurance, whether you get the cell phone plan you want, even if you get the job that you hope to get."

You can read the full transcript of Gerri's NBC appearance or watch the video segment online here. If you have a question for Gerri or any of the other CreditBloggers.com experts, feel free to email us anytime!

Blogs we like: The Budgeting Babe

If you would rather shop for Manolos than think about mutual funds,  The Budgeting Babe may be the blog for you! This personal finance blog at http://budgetingbabe.blogspot.com/ takes a common sense approach to savings, money management and more. Be sure to check out this post on why women should save more for retirement than men. Based out of Chicago, The Budgeting Babe is a great source for fun and rational financial tips!

How phishing works

HowStuffWorks, the bastion of cool information online, has published a new article about how phishing works. Phishing is a specific kind of cyber-identity theft where a thief sends fake emails that appear to be authentic. When you login through these emails to what you are lead to believe is really your Amazon, PayPal or Bank of America account, the thief steals your personal information.

A few months ago, I was in contact with a young mother who had received an email that looked like it was from eBay. The message said that there was a problem with her account and she needed to make some updates online. When she clicked on the links in the email she was sent to a web page that looked like eBay but was actually a fake. She entered her mailing address, birth date, credit card information and finally even her Social Security number before she discovered it was a scam. She spent the next few weeks closing all of her accounts, reporting the crime and worrying about the consequences of what she had done.

Web sites that are commonly misrepresented by phishers have now developed special websites just to inform consumers about these scams. For example, eBay has an online "Spoof Email Tutorial" that is definitely worth reading. When you are not sure about the authenticity of an email, check that the email address and URL of the site is authentic. You can also contact the business by phone to see if it is real or a phishing scam. Or, even better, type in the URL yourself instead of following the links in the email provided. It's better to be safe than sorry.

Closing Credit Cards?

Most folks realize that credit scores are important, but many don’t realize that common misconceptions may cause some to unknowingly lower their own score.  The issue of “too many credit cards” was one example which surfaced at recent seminars I taught at ING Direct Cafés in New York and Philadelphia. Most folks commonly assume it’s bad to have “too many” cards, and therefore should close those seldom used. This could be true, but then again, it could be wrong. First of all, like everything with credit scoring, there’s not one magic, “correct number” of credit cards. It all depends, because data on your credit cards is weighed against all other data in your credit report. But, it’s important to know that closing credit cards can lower your score.  Here’s why.

•  30% of your FICO score is based on credit utilization, that is, the ratio between your balances and credit limits on your revolving credit. Cards are scored one at a time and then again collectively
•  15% of your FICO score is based on length of credit history.

When you close credit cards you reduce your credit limits and eliminate potentially helpful length of history. A separate analysis, unrelated to FICO scores, sometimes is made by mortgage lenders who see that a mortgage applicant could seriously change the debt-to-income ratio if the applicant used all of the available revolving credit. Even so, most mortgage lenders look at the FICO score first, so tread carefully.

There will be another seminar at ING Direct’s Los Angeles Café on Thursday, Dec. 1. (11175   Santa Monica Blvd., @ I-405 Exit)  Evan Hendricks is Author of, "Credit Scores and Credit Reports: How The System Really Works, What You Can Do"

   

Black Monday Online

Everyone has heard of Black Friday, the day after Thanksgiving sale stampede. But have you heard of Black Monday? The Monday after Thanksgiving weekend is the biggest online shopping day of the holiday season. According to this Washington Post article, over 36% of people will do some of the holiday shopping online while at work. Here are some tips for a happy Black Monday:

• Only enter your personal information on secure and trusted websites. Secure websites have "https" in the URL and the lock symbol in the corner of the browser.
• Don't forget to calculate your shipping and tax costs. These could add up to a lot of extra expense.
• Use a credit card while shopping online instead of a debit card. A credit card will be easier to track and has more security protections.
• Know your employer's policies. Most employers aren't too concerned about a little online shopping at work but it may be a big deal for some. Trust your instincts when it comes to shopping at work or having packages delivered to your office.
• Limit the number of stores to save on shipping. Instead of ordering one thing from five websites, see if you can order all five from one store. This could help you cut down on your shipping costs.
• Watch out for "phishing" emails or "pharming" web sites. These sites look authentic but are actually fakes set up by ID thieves. Check the URL of the site and investigate anything suspicious before entering your information.

Black Friday boot camp

The jam-packed holiday sale day after Thanksgiving is commonly known as "Black Friday." This is the day you hear news about stampedes at Wal-Mart and people camping out in front of Macy's. If you are planning on joining the mobs this Friday, here are some tips to keep in mind:

• Make all your purchases on one credit card so they are easier to track. Or better yet, pay with cash!
• Don't go overboard. Just because it is on sale, doesn't make it a good gift or something you need to buy.
• Keep all your receipts and compare them with your purchases and credit card charges. In the Black Friday chaos, it's easy for a mistake to have been made.
• Watch out for receipts printed with your full credit or debit card number. This is more common that you would think. Shred this kind of receipt before throwing it away in order to guard against identity theft.

For more tips on the first weekend of holiday shopping, Deeper Motive has a great post all about staying sane on Black Friday.

Dealing with doctor's bills

A trip to the doctor's this morning for a pulled tendon got me thinking again about the costs and pitfalls of medical bills. Combining this simple doctor's visit with a prescription, lab work and trip to the physical therapist, makes the total bill for this simple injury pretty hefty. Luckily, I have health insurance...right?

Even health insurance coverage may not be enough to prevent medical bills from causing financial distress. According to a report by Harvard's law and medical schools, costly illnesses trigger about half of all personal bankruptcy filings. And most shockingly, more than 75% of those people had health insurance.

“Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” said Dr. David Himmelstein, the study’s lead author and an associate professor of medicine. “Most of the medically bankrupt were average Americans who happened to get sick.”

The moral to this story? Have good insurance and prepare for the worst case situation. If you were hit by a car or diagnosed with cancer today would you have enough savings and available credit to help you get through it financially?

How do credit scores work?

How Stuff Works, the publisher of detailed articles books about the inner workings of aspirin and digital cameras, also has articles about money, credit and personal finance topics. From how credit scores work to 401(k) and mortgage explanations, this site is a unique resources for helpful and clear articles on complex financial matters. You can also search for almost any topic under the sun.

Making your financial dreams a reality

We all have financial dreams. From reducing our debts to retiring early, these dreams can become a reality with a little planning. I am about to start working on article about setting goals for achieving big financial dreams. What's your dream? Share it in the comments section below.

Accidental credit card closures

Kiplinger's has posted a fascinating article about credit cards online. Included in this article:

Q: I hadn't used my credit card for about a year when my bank canceled my account. Can a bank do that?

A: Afraid so. Even if your account is in good standing and you haven't been late with a payment even once, an issuer has the right to rescind your card. Some have even closed accounts on active customers because they incurred no fees or interest charges. "There's no regulation that says you must continue doing business with someone who's not profitable," says David Medine, associate director of credit practices at the Federal Trade Commission.

Yikes! I have never heard of a bank closing a consumers credit card account but it does seem entirely possible. If this happens to you, your credit score could drop fairly dramatically. Especially, if the the card that is closed is the oldest on your credit report or one of only a few cards you have.

The moral to this story: Be sure to use all your credit cards at least once every few months.

   

Weekend assignment

This weekend, reserve a half hour or so to go online and check your credit scores. Regularly checking your credit reports and scores can help you guard against identity theft and spot damaging inaccuracies. Checking your credit scores now means you won't have to worry about them when you want to apply for a new account later.

Plus, be sure to read this interesting article about credit scores from Business Week. As a refresher, you can also read the CreditBloggers post about how 30, 60 and 90 day late payments really impact your credit scores. By Monday, you'll be informed about your credit and ready to tackle the holiday shopping season!

It's simple to overlook this one...

It's well known that a prime target of identity thieves is your mail. Your mail has most of the information needed to fill out a credit application in your name. The only thing missing is your social security number.

Those of you who use shredders, bravo! You probably shred everything that has your name and address on it. Well done.

Here's a sneaky tidbit that you need to know about...check out the inside of catalogs. More and more catalogs have a pre-filled out order form within their pages. If you aren't careful you'll shred the name and address on the outside of the catalog but forget to rip out the order form. It can easily be overlooked.

Trust me, if I can figure this out then so can an identity thief.

You'll be getting a ton of catalogs over the next month. Please be careful to shred all of your sensitive information.

What's The Difference Between Credit Scores, Application Scores and Custom Models?

Scores, scores, scores...too many scores. One of the most common questions I hear is "what is an application score?" and "how is that different from my credit score?"

In order to really understand the whole scoring landscape you really need to expand that question to include custom scoring models and insurance scoring models.

Here's a definition of 4 of the most common types of "scores" used today by lenders and insurance companies.

Credit Bureau Scoring Models - These scoring models use only the information on your credit reports to generate a "credit bureau risk score." These scores are used by pretty much all lenders when you apply for credit. They are designed to predict whether or not you will pay your bills on time. They are the least powerful of the scores we'll define. However, they are also readily available for any lender to use and are the least expensive. As such, they are by far the most popular and commonly used scores.

Application Scoring Models - These scoring models use information from BOTH your credit reports AND your credit application. Again, these scores are designed to predict whether you will pay your bills on time. They are more powerful than credit bureau scoring models but are also more expensive and more difficult to implement. They are more powerful because they take into account information from your application, which credit scoring models can't do. There is a lot of predictive information that can be pulled from an application...your salary, time on the job, household income and time at your residence just to name a few. These are not as common as credit bureau scoring models.

Custom Models - These are the Rolls Royce of the bunch. They are by far the most powerful models but are also very expensive because they have to be custom built for each lender that uses them. To buy a custom model and maintain it can cost well into the 7 figures. They are only used by the powerhouse lenders who can afford them. They are so much better than all other types of models that lenders who use them can do a much better job of separating the future "good" payers from the future "bad" payers. So much better that they justify their cost.

Insurance Credit Scores - These scores aren't used by lenders...they are used by insurance companies. They are designed to predict a couple of things (depending on whose insurance score you use). Some are designed to predict whether or not you will file a homeowners or auto claim. And others are designed to predict whether or not your premiums are likely to outpace your claims. Yep, you got it. These are predicting whether or not you will be a profitable insurance customer.

These scores use information from your credit reports and also previous insurance claim data.

So let's summarize...

Least expensive, least powerful, most common - Credit Bureau Scoring Models
More expensive, more powerful, less common - Application Scoring Models
Most expensive, most powerful, least common - Custom Scoring Models
Unique to the Insurance Industry - Insurance Credit Scores

Enjoy the knowledge!!

Traveling: Watch out for ID theft

If you are traveling for Thanksgiving or the upcoming holidays, be sure to keep a close eye on your identity. A press release today warns travelers about the added risks of using a hotel's WiFi network. According to the article, using shared internet hotspots at airports and hotels can increase your risk for a hacker accessing your computer or PDA. If you do use public WiFi:

• Install a firewall system on your computer to guard against virtual intruders
• Don't keep sensitive records or files on your computer
• Don't access sensitive accounts online such as banks and investments when you are on a shared network
• Disable file sharing and peer-to-peer features on your computer

You can also guard against identity theft while traveling for the holidays by leaving unnecessary credit cards and personal documents at home in a safe place. You should also leave a photocopies of your wallet's contents and account information with a trusted person back at home. If your wallet is stolen or you encounter identity theft, these documents can help you report the crime quickly.

Do you know Innovis?

You may have heard the name in passing...seen their mysterious logo...but what is Innovis?

Innovis is often called the "fourth credit bureau." A relative newcomer to the credit reporting industry, Innovis collects consumer data and sells it to creditors for the purpose of creating mailing lists. Remember, all those mail offers you received after your last move? That was Innovis. The company is also used by Fannie Mae and Freddie Mac to track loan delinquencies.

Innovis isn't as consumer friendly or open as the other credit bureaus - Equifax, Experian and TransUnion. The sparse website for Innovis includes little more than a mailing address where you can send your request for a copy of your report. They list the price as $3 to $8, but I'm going to see if I can order mine for free by citing FACTA regulations.

The good news? Innovis data isn't used in a situation where you could be turned down for credit, insurance or a job, according to an NBC report. (Warning: the phone number listed in this report is disconnected) So even if there are damaging inaccuracies on your report, you won't be negatively harmed. Unless you count receiving less junk mail as being a negative!

ID Theft By Parents

ID Theft By Parents

My friend’s teenage stepdaughter thinks she has been a victim of identity theft. The perpetrator, unfortunately, is her mother. Increasingly, children are becoming victims of identity theft as their parents, who can’t get credit themselves, hijack their information.

My first recommendation was for the daughter to get her credit report from the federally mandated free report site www.AnnualCreditReport.com so she can find out what is listed. But when she tried to order it, she discovered minors cannot request a report online from that service.

So I called my contacts at Experian (whose execs are always very quick to respond to my questions – thank you!). Their spokesperson explained that generally, minors should order their free reports by mail, and include a copy of their birth certificate, along with a copy of their parent’s driver’s license or other id to verify the current address.

This particular situation is tricky, however, because Mom may be the one misusing her daughter’s information and so the daughter can't enlist her help. Experian offered to call the girl’s father (who lives at another address) and get a copy of her report to her through him.

What will this girl do if she does find out her mother is using her information to commit identity fraud? There is no easy answer. The companies that extended credit or services are going to want to get paid. And they aren’t likely to just say, “No problem” if she explains what happened. She probably won’t want to report her mother to the police. But if she doesn’t act, she may be stuck with bills or bad credit for years.

The best advice I could give her is to read the Identity Theft Resource Center’s guide which details the different types of adult/child identity theft and suggests ways to deal with it. The site offers numerous tips and strategies for this tragic situation.

Parents have no right to ruin their child’s credit and future in this way. If you are tempted to “borrow” your child’s information to get credit because you can’t, stop. Even if you plan on paying the bill on time, if anything goes wrong you can affect your child's ability to get a job or go to college. Get help from a non-profit agency or debtor’s anonymous immediately.

Credit card offer infiltration

Just yesterday, CreditBloggers had a post about the increase of sneaky credit card solicitations. Today it seems that the problem is going digital. American Express has started soliciting credit card offers to their existing customers via email. It's standard practice for existing customers to receive information about their accounts, rewards program deals and third party offers by email, but this is the first time I have seen a pre-approved credit card offer in my inbox.

This offer makes me a bit nervous because email is definitely not a secure means of transmitting information. The card's online application is secure and they do require you to verify your identity before applying, but it still makes me somewhat uncomfortable. Plus, I am not sure that opting-out from the credit bureau's pre-approved marketing programs would include these emails.

On the flip side, I guess it is better to receive these offers by easily-deletable-email than by pages of scan-and-shred paper mail. What are your thoughts on this practice? Submit your feedback in the comments section today.

Interest Only Mortgages...good idea or disaster waiting to happen

We've all heard of interest only mortgages. This type of mortgage is somewhat controversial because none of your payment goes against the principal amount of your loan. This means that if you borrow $300,000 to buy a house, even after you make your monthly payment...you will still owe $300,000. You haven't paid down the balance at all.

If you have an interest only loan locked in for 1,3,5 or 7 years then you'll still owe $300,000 after years of making payments.

So, the million dollar question is "are interest only loans a good idea or a disaster waiting to happen?"

What's wrong with making payments that don't lower your principal? Most people only live in their house for 5 years or so. After making payments that include principal for even 5 full years will only reduce the principal amount by a very small amount. So, in my example above you may still owe the bank $297,000 out of the $300,000. Not worth it in my opinion.

If after 5 years you sold the same house and netted (after the real estate agents ripped you off to the tune of 5% or so) $320,000 then you still walked away with a $20,000 tax free profit. So, what would have been the value of paying a much higher monthly payment just so you could pay down your loan a few thousand dollars...which you'd get back when you sold the house anyway.

Most of what you'll make on your investment you'll make in appreciation...not principal balance reduction. So, the smart play is to get in the house for as little as you can and allow it to appreciate.

And yes, your house is an investment. Never EVER get emotionally attached to your house. In fact, if you live in an area that has steady real estate appreciation the best investment you can make is to buy a fixer upper, fix it up, live in it for two years and then sell it by yourself (no real estate agents). Your profit is 100% tax free. If you never get emotionally attached to your house and you don't mind moving every two years then you will make big bucks. So big, in fact, that after you do this 5 or 6 times you should be able to pay cash for your next house.

Back to my subject, interest only mortgages.

Let's plug in some numbers...

Say I borrow $300,000 interest only at 6%. Multiply $300,000 by 6% and you get $18,000. Divide that by 12 and you get $1500. That's your monthly interest payment. That's much less than you would pay if you had to pay principal as well.

What's the drawback? My father and I had a discussion about interest only mortgages and his arguement is "you never own any part of it." Good point...but who cares. After 5 years you're still only going to own the toilets and maybe some of the windows. Who lives in a house for 30 years and makes their 360 payments? Even my father has refinanced his mortgage several times over the past 10 years and guess what...every time he refinances he starts over again...he still owes someone 360 payments.

Here's the only drawback I see...

Some people will use an interest only mortgage to get into a house that is way too expensive and which they could have never purchased with a conventional principal and interest mortgage. They think that just because you can qualify for $300,000 that you have to borrow $300,000.

What if you lost your job or were unable to refinace the interest only mortgage and buy more years of lower payments? Eventually your interest only loan will have to be refinaced, paid in full or allowed to convert to a loan which requires principal payments. In the last case your payment will shoot through the roof and you might default on the loan...aka foreclosure.

If you are disciplined enough to NOT borrow the max on an interest only loan you should be just fine.

Good luck!!

Keeping kids safe from identity theft

MarketWatch today featured an interesting article about keeping your children's identity safe. While child identity theft is still fairly rare, it is most commonly perpetrated by a relative or family friend. The damage isn't usually spotted until the child turns eighteen and is turned down for a credit card because of a low credit score.

The article references the Identity Theft Resource Center's tips for spotting signs of identity fraud. This includes finding pre-approved credit card offers in the mail addressed to your child and receiving suspicious collection calls. It also advises parents to check their children's credit reports annually.

Ordering a child's credit report isn't easy though (and it shouldn't be for obvious reasons). You shouldn't try to order a credit report for a minor through the standard retail process. The best way to order a credit report for your child is to call the credit bureau fraud hotlines. The fraud reporting systems for Equifax (1-800-525-6285), Experian (1-888-680-7289) and TransUnion (1-800-680-7289) include options for requesting a copy of your child's credit report when you are concerned about identity theft.

Shredding is required by law

Do you employ a gardener, housekeeper or nanny? If so, you may be violating the Fair Credit Reporting Act by not shredding their consumer and background reports before throwing them away.

Under regulations that went into effect this summer, all employers (even if you only employ one person) must securely destroy sensitive employment reports before discarding them. If you don't, you could be sued, fined or included in a civil suit involving a group of nannies. You can read more about this shredding policy in this article from USA Today and from this article from The Detroit News.  Businesses also have to securely destroy consumer report documents they receive from their customers.

It is a start, but this law only covers official "consumer report" documents such as background checks, employment records and medical histories. Applications and other forms aren't legally required to be destroyed. Expansions on this shred-requirement, such as the recent New Jersey identity theft law, provide even more protection for businesses, employees and consumers.

Blogs we like: SavvySaver

SavvySaver is the personal finance blog of a 27-year old trying to save, budget and invest. CreditBloggers likes this blog particularly because of the smart advice and realistic goals set by the author. In this recent post, the blogger discusses Generation Y's financial goals:

This just shows that many people in my generation are willing to take responsibility for their own lives. They want jobs that are personally fulfilling, and are willing to provide financial security for themselves in place of the job security felt by previous generations. I think this is evident in the number of personal-finance blogs that have popped up in the last year. Personal finance is no longer something that we keep to ourselves or let someone else handle for us; we are taking responsibility.

As if managing money isn't hard enough already, the SavvySaver is also in the midst of planning her wedding. With the average wedding these days costing about $25,000, it's interesting to read her advice and commentary.

Bait and switch by mail

Opening your mail these days is turning into quite the chore. Not only do you have to shred the five+ credit card offers you receive daily but you also have to open and read the fine print on official looking letters just to determine what they are trying to sell you.

What looks like a bank statement turns out to be a credit card offer. What looks like a letter from the government turns out to be a mortgage refinance pitch. Don't even get me started on the paper cuts!

Caroline Mayer from the Washington Post recently wrote an interesting article on the increased use of misleading mail by direct marketers. According to the article, the FTC and Direct Marketers Association are trying to crack down on these confusing and sometimes illegal offers. In the meantime, we'll just have to keep scanning and shredding!

Terrible credit advice

Meet Rachel, Mary and Terry. These folks vary in age from 26 to 49, live all over the country, have different types of jobs and incomes, don’t know each other and have nothing in common…or so we thought.

What do they have in common? They all got burned by bad credit advice during the process of buying or refinancing a home. In these cases, the advice came directly from their trusted advisers such as mortgage brokers and auto dealers.  Instead of helping them save money, following these recommendations led to credit score and loan problems.

In this article, credit expert John Ulzheimer details the bad credit advice these folks were given, the impact of those recommendations and what they could have done differently. Don't fall for these common credit misconceptions!

Cutting down your debts

The holiday season is usually a time people let their credit cards run free. Instead of racking up debt between now and December with free range credit cards, try reducing your debts instead. Gerri Willis from CNN offered five tips for reducing your debts this morning. Along with finding better deals on credit cards, heating oil, insurance and cell phones, try cutting back your monthly cable bill.

In order to get all the premium channels, digital signal and digital video recorders, too many people end up spending about $100 a month for cable. But for only $10 or $20 bucks a month you can still get more than 50 channels in most markets. That's a savings of over $80 that can go toward your credit card debt each month. Or even better, invest in a $20 set of rabbit ears and reduce your monthly cost to $0. Plus, wouldn't you rather spend more time with your family and less time in front of the TV this holiday season? Sounds like a win-win to me!

Blogs we like: FiveCentNickel.com

It's great to see people fired up about credit and money online. That's why CreditBloggers is a fan of FiveCentNickel.com. This blog is dedicated to all things personal finance. From credit cards to identity theft, the host and readers of FiveCentNickel are determined to find the real story and the best deals. Be sure to check out this post where they crunch the numbers on Dave Ramsey's debt repayment plan.

Hotel card urban myth debunked

Anyone who has stayed in a hotel the past few years has dealt with those magnetic cards that have replaced room keys. About 8o% of hotels now use these magnetic cards instead of traditional keys. At the same time, an urban legend was brewing that said the cards contained information about the guest's credit cards and more. From the New York Times:

For several years, rumors have circulated on the Internet about privacy concerns with magnetic cards. The rumors appeared to originate in 1999, when the police department in Pasadena, Calif., investigated a claim that personal information had been extracted from a hotel key card. Officials ultimately concluded that private data was not being downloaded onto the cards.

While there have been occasional instances of hotels putting sensitive information on these cards, overall its an urban legend. The American Hotel and Lodging Association has even issued a press release debunking the key card rumors.

Still, it makes sense to guard these cards when you are traveling. Just like a standard key, you wouldn't want it to fall into the hands of a criminal. More importantly, you should guard against identity theft by keeping your credit cards and other sensitive documents locked in your hotel room safe when you are out and about. Click here to read more tips about preventing identity theft while traveling.

Love your money

We all love money, but do we all have healthy relationships with money? For many of us, our relationship with money could probably use a little couple's therapy. If you neglect, fear or are frustrated with your financial situation, you are probably not managing your money as well as you could.  You may be missing out on the best rates because you don't understand your credit score or not saving for retirement because you are not sure where to start.

Ditching your anxiety over money is a necessary step to financial empowerment. When you learn to respect and understand your money you can save thousands on big purchases and achieve your  goals. In this article, Credit.com's experts show you how to build a healthy relationship with your finances.  Rekindle the romance today!

Cohabitation and your credit

Cohabitation between couples is the new marriage. According to the 2000 census, over 11 million people live with a partner or significant other. These living arrangements work out well for millions of couples. But when the relationship turns sour, things can get pretty complicated. Not protected by marriage and divorce laws, there are no rules for separating jointly owned property and belongings.

Newsweek recently published an article about the financial challenges cohabitating couples face. Along with discussing financial goals before you move in together, the article also suggests that couples create a domestic partnership contract or "cohabitation agreement" and have it notarized. In the event of a breakup, this contract will act as a replacement "prenup" and make the transition go more smoothly.

As for your credit, it's best to keep your credit cards in your own name when you are cohabitating with your sweetheart. If you do open a joint account, keep in mind that the account details are reported to both your credit reports. If you buy a home with your partner, be sure to work out the ownership details in a formal contract before you sign the mortgage papers.

Scary Halloween costume

Check out this photo of a clever (and scary!) Halloween costume. I especially like the addition of the credit card logos and the "identities" of Paris Hilton, Bill Gates, etc. It's a funny take on a serious problem and demonstrates just how mainstream identity theft has become.

Credit on campus

Credit card promotions and offers are a familiar sign on college campuses these days. Along with the "freshman 15" and all night study sessions, dealing with debt has become a part of America's college experience. The average college student now graduates with $20,400 in student loan and credit card debt.

However, according to Business Week, these college graduates may face a new challenge because of their debts. Some law and medical schools are not encouraging or requiring applicants to submit their credit data for review. A low credit score and thousands in debt could result in being denied admission:

Georgetown Law School urges students with severe credit issues to defer for a year while getting their finances in order. "The decisions they make today have a cumulative impact on practicing law," says Ruth Lammert-Reeves, Georgetown's assistant dean for financial aid. According to Reeves, bar examiners in states such as California and New York take an applicant's observance of fiduciary responsibility into consideration. The Medical College of Wisconsin even reserves the right to deny admittance if a student doesn't provide a clean credit report.

The good news? Many universities and colleges are now starting to offer financial planning classes to their students. The classes teach students about credit, identity theft, debts and investing, sometimes even as for-credit courses.

Medical bills lead to housing troubles

An article in Forbes today highlights the financial impact of increased medical costs in America. According to a recent survey, 77 million people have had medical bill problems in the last 12 months. This adds up to nearly two out of five working-age adults in the US. These problems can lead to serious credit damage and inability to afford mortgage or rent payments. In fact, 27% of people surveyed said their housing costs made it difficult to pay for health care.

[E]ven relatively small amounts of medical debt -- $500 or less -- can pose a hardship. One out of six respondents (16 percent) said that amount of debt had harmed their credit, and 12 percent with this amount of debt had housing problems.

The Access Project conducted the survey and recommends reforming the way that medical billing offices handle delinquent debt payments. Currently, late medical bills are often sold to collections agencies.

It's only fair, they argued, since medical debt is one of the few types of debt that is acquired involuntary and essentially acts as a "sickness tax" on top of the bills themselves by damaging the person's credit.