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Welcome to the Credit.com newsletter!
This free newsletter delivers easy-to-read
tidbits about credit
directly from personal finance experts.
In this issue, we're focusing on how to
protect your credit in a crisis. We'd
love to hear from you! Send us an
email
with your credit questions or comments
anytime!
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Ask John
Join John Ulzheimer in Atlanta on Saturday,
March 31 for a
free
credit seminar
!
Tidbits® newsletter readers in Georgia
are invited to attend this unique educational
experience. Topics will include improving
your credit scores, reducing debts, managing
money and recovering from bad credit.
Learn
more about the free Atlanta credit
seminar!
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Quick Tip
Did you know that you don't have to be
a full time student at a university to
qualify for a student credit card? Part-time
and community college students can also
take advantage of these great credit card
deals!
Student credit cards can be a great way
to establish your credit. These premium
credit accounts lower their entry requirements
for students, have low rates and offer
great rewards programs.
Apply
for a Discover® Student Clear Card
online today.
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On the Blog
Tax time is right around the corner.
Do you know the big scams to avoid?
In this post, Nancy Castleman shows you
12 tax schemes you need to steer clear
of this April. Phony refunds to tax preparer
fraud, this short article covers it all!
Read
more about the IRS's dirty dozen
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How to Protect Your Credit in an Emergency
Most people know that simple things such as paying bills
late or applying for too many new accounts will damage their
credit scores
. But what about more complicated life events like divorce
or illness? Did you know that these crisis situations can
have a major impact on your credit if you're not careful?
Let's investigate:
Divorce
It's a common misconception that divorce decrees separate your
legal responsibility for shared accounts. Joint credit cards,
co-signed auto loans, and shared mortgages will continue to
belong to both people even if they are included in a divorce
settlement. This means that a late payment on an account assigned
to your ex-spouse can cause lasting damage to both of
your credit scores.
The Solution: The only way to stop the
shared responsibility of joint accounts is to refinance
the accounts into one person's name or close them. If
that's not an option, keep a close eye on the account and
be ready to pay if your ex can't. Also, read our
Divorce
Survival Guide
for more tips.
Illness
Getting sick or injured is expensive! One trip to the emergency
room for a broken leg can potentially break the bank. And medical
providers aren't easy going when it comes to being repaid.
Unpaid medical bills are often sent to collections, which damages
your credit for seven years.
The Solution: Remember that it is always
ultimately your responsibility to pay medical bills, even
if your insurance company should have covered the amount.
It's better to pay the bill than damage your credit with
a collection account. Read more about
dealing
with medical bills
.
Taxes
This is one crisis that you can at least see coming! If you
know that you're going to owe a large amount of taxes this
year, start planning ways to pay now. Tax liens cause a huge
amount of credit score damage and have no expiration date if
left unpaid.
The Solution: Options including IRS payment
plans,
personal loans
,
credit cards
or even a garage sale can help you avoid a tax lien. Start
by calculating how much you'll owe on April 15th and then
read this recent CreditBloggers.com post on
tax
payment options
.
Job Loss
Losing a job can throw your finances into a tailspin. You have
no income but the bills keep coming. That small credit card
balance can balloon and you may default on your car or home
loan. All of these changes can damage your credit scores.
The Solution: Create an emergency
savings
account
with enough to cover a few months of your expenses in the
event of a job loss. Also, be sure you have access to
credit cards
that can help you pay if you're in a pinch. And don't forget
to talk to your creditors if you find yourself unable to
pay large bills; they might be able to help. Read more about
facing
a financial crisis
.
Do you have a question about how to cope with a financial
emergency? Credit.com's personal finance, real estate, credit
scoring, and debt experts would love to hear from you at
tidbits@credit.com
.
Quote of the Month
“The IRS spends God knows how much of your tax money
on these toll-free information hot lines staffed by IRS
employees, whose idea of a dynamite tax tip is that you
should print neatly. If you ask them a real tax question,
such as how you can cheat, they're useless.”
- Dave Barry
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