Two Interesting Credit Card Reports

I came across two interesting posts regarding credit cards in the past two days and wanted to pass them along. The first is regarding credit score calculations (FICO Score). As you probably know, this score determines many things:

• How much interest you might pay on large loans (mortgage, auto, boat)
• Your credit worthiness as seen by other agencies
• Prices for auto/homeowner insurance

The first article explains what types of activities impact your FICO score and looks at some common mistakes. These mistakes include:

• Canceling old credit cards
• Staying current on “most” of your cards
• Having too many open lines of credit

The second article provides 50 Fun Facts About Credit Cards (credit cards and fun? Paying interest on borrowed money is not my idea of fun and contains both good information for credit card users and some interesting trivia. Here are a couple very important points from the article:

• If you have multiple balances with different interest rates on one
  card, payments are generally applied to the balance with the lower
  interest rate. You will have no choice in the matter and you cannot
  request it be made to the higher balance. So if you have a $100 balance
  at 19.99% and a $5,000 balance at 4.99%, your payments apply to the
  $5,000 at 4.99% first. A note about this will be in your agreement.

• Each American household receives approximately 6 offers a month. The typical response rate is .33% (one third of one percent). You can opt out of these mailings via OptOutPrescreen. [plus, this reduces junk mail, prevents bad guys from getting the offer and submitting it]

Since it’s the start of the new year, it might be a good time to commit to closer management of your credit information, including a review of your current credit report.