Credit has been under attack lately, and in a state of
change. Thus, the new "Red Flags Rule" that went into
effect on May 1.

This rule directs car dealers to play "snoop" in order to
prevent ID theft. So, if you apply for a loan to buy a car
- new or used - the dealer may ask you questions that you
feel are none of his or her business.

For instance: "Do you always use your middle initial?"
"What's the balance on your American Express Card?" These
are questions designed to trick someone who isn't you.

Here's how: They ask about the American Express Card
because your credit report shows you don't have one. That's
something you would know, but a thief probably wouldn't
know. So if "you" stutter and say you aren't sure, because
your spouse is the one who keeps track of such things, it's
a clear sign that "you" aren't you.

Dealers are also looking for other inconsistencies, such as
a name and address on your application that doesn't match
your driver's license or the address listed in your credit
report.

Dealers will now be required to document the steps they've
taken to assure that the person buying the car is the same
person whose credit is being used for the car loan - or
lease. If they fail to do so, they will be subject to fines.

So that you don't become suspect when using your own
credit, make sure to take these steps:

If you move, be sure to notify all of your accounts and get
your driver's license updated. If you move to a different
state, get a new driver's license in the new state Check
the photo on your driver's license - if it doesn't look
like you, either request a new photo or take along
additional photo ID that does look like you. Driver's
license photos are notoriously bad to begin with - but if
you've changed your hair color, shaved off a beard or
moustache, lost or gain weight, or have just recovered from
a long illness, the picture might not resemble you at all.

Use of stolen identity at car dealerships is relatively
rare - but now that the definition of "financial
institution" has been expanded to include any business that
includes loans and leases, dealerships are subject to the
same regulations as other financial institutions. Your
credit's your life, treat it as such.

There are no quick fixes for improving your credit scores.
However, you can increase your scores over time by
demonstrating that you consistently manage your finances
responsibly. Take a peek at these ten tips to live by if
you want a good credit rating:

1. Pay your bills on time. This is the most obvious and
best way to improve your scores, and it's never too late to
start. Even if you've had bad credit in the past, those
will count less over time if you keep paying your bills on
time.

2. Keep credit card balances low. High outstanding debt can
pull down your score. Never max out your credit cards or
carry balances that exceed more than half of the total
credit limit.

3. Check your credit report regularly for accuracy. It's
possible that there may be inaccurate information on your
credit report that can be easily cleared up If this proves
to be the case, then you should contact one of the three
credit reporting agencies-TransUnion , Experian or Equifax.
On-line dispute for each bureau: EquifaxDispute online
ExperianDispute online TransUnionDispute online

4. Pay down your debt rather than transferring balances.
Consolidating your credit card debt onto one card or
spreading it over multiple cards will not improve your
score in the long run. It may save you interest charges
temporarily though. The most effective way to improve your
score is by simply paying down the amount you owe.

5. Do not close any credit card accounts. In general,
having credit cards and installment loans that you pay on
time will raise your score. This is what we refer to as
credit depth. Even if you don't use them, keep them open as
this will demonstrate stability. Someone who has no credit
cards tends to have a lower score than someone who has
managed credit cards responsibly.

6. If you have no credit history, don't open too many
accounts to soon. Opening too many accounts in too short of
a time period can look risky because you are taking on a
lot of possible debt. Try secured credit cards to quickly
establish a history of credit for yourself.

7. Enroll in identity theft protection. You don't have time
to constantly monitor your credit. Leave that to the watch
dogs at Identity Guard. Or choose one of several services
designed to protect your credit.

8. Don't live beyond your means. Make paying your bills and
buying only essential items your main priority. Carefully
weigh the importance of all new purchases against the
greater importance of reestablishing your good credit.
Getting a handle on your spending, paying bills on time,
and paying down credit cards takes a long-term commitment
and strong self-control. It won't always be easy, but the
effort will pay off once you see your credit scores improve.

9. Know what's on your credit report and resolve any
discrepancies. Even if you believe you have a good credit
score, it is still wise to check with credit reporting
agencies to make sure they contain a similar view of your
credit history. It's also wise to make sure there are no
errors on your report, such as name misspellings or
incorrect addresses.

10. Consult with a reputable consumer credit counseling
service if all else fails.

This won't improve your score immediately, but the sooner
you begin managing your credit well and making timely
payments, the sooner your score will get better. Plan to
pay your bills on time and follow through.

If you have a history of poor credit or think that you
might, it's important that you find out and take the steps
to improve it. It will take time, but with discipline, you
may expect to see improvement in as little as six months.
You see, creditors are interested in a track record. You'll
have to prove that you consistently pay your creditors on
time and that you can effectively pay down your debt.

Paying down your credit card balances will not only improve
your credit rating over time, but you'll be in a better
position to negotiate a lower interest rate for your cards.
In general having good credit will get you better rates on
just about everything you can think of from Home loans to
insurance rates. What's your credit score?

They say they do. The government has provided $75 billion
in taxpayer money and told them to. But many of them are
stalling because helping troubled homeowners is a financial
conflict of interest for them.

When the "Making Home Affordable" program was announced,
financially strapped homeowners expected to find some
relief. And some did get relief in the form of a refinanced
loan or a mortgage loan modification.

However, many others are finding that their mortgage loan
servicer is putting them off.

Mortgage companies are paid to service mortgage loans and
they collect a percentage of the value of the loans they
service. They're paid the fee by the investor whether the
homeowners make their payments or not.

Consumers who are delinquent on their loans are the least
likely to find help, because mortgage loan servicers also
collect fees of up to 6% of the payment amount each time a
payment is late. Thus they aren't in any hurry to help get
those loans current.

The consumers and the investors are the ones who suffer,
while the loan servicers reap huge profits.

On the surface, the "Making Home Affordable" program seems
to be an incentive for loan servicers to help consumers.
They receive $1,000 at the time they modify a loan, and
another $1,000 per year for the following 3 years.

However, when a home goes into foreclosure, the fees can
far outweigh that paltry $4,000.

They've been collecting late fees from the consumer until
the mortgage went into permanent default. Once it's in
foreclosure, they begin collecting even better fees from
the investors. Taking possession of a house, checking the
title, arranging for maintenance, ordering appraisals, and
other tasks all carry fees. Further, a mortgage servicer is
free to use the suppliers of his or her choice for legal
work, title reports, and insurance policies.

This work can be funneled to businesses that the loan
servicer either owns or has an interest in. Once again, the
profits grow.

The monthly management fees may be one reason why mortgage
loan servicers reject offer so routinely, and why they
often list foreclosed homes at prices higher than their
real estate professionals suggest. The longer a house stays
on the books the longer they collect from the investors.

So - while mortgage loan servicers are morally (and
legally) obligated to do the best thing for the investors,
and they claim to want to do the best thing for homeowners
in trouble, they seem to be playing the "collect money
game" from every angle.

When I was a kid they used to call that "Playing both sides
against the middle."

Credit cards are the safest and most convenient way to pay
for expenses while on vacation, but they can and do get
stolen, and thieves often pick heavily populated vacation
spots to grab their opportunities. Protect yourself this
vacation season by taking some smart precautions before you
leave home.

First, pare down your wallet - if you usually carry a whole
fist full of credit cards, change your habit. After
checking each card so you know which has the largest credit
line, the most credit available, and the lowest interest
rate on purchases, pare down to only 2 cards. If one is
lost, you'll have a back-up. Once at your destination, put
your back up card in the hotel safe or the in-room safe.

If you have a home safe, put the others in the safe while
you're away. If not, consider storing them in your safe
deposit box at the bank. Unoccupied homes sometimes attract
burglars, so don't leave them in your desk drawer or stuck
in a kitchen cabinet, in plain sight!

Now, write down the contact information for your credit
card issuers and put it in a safe place in your luggage.
Suitcases, purses, and wallets can also become misplaced on
vacation, so why not make a couple of copies and carry them
in different places?

Under the terms of the Fair Credit Billing Act, your
maximum liability for charges on a lost or stolen card is
$50 - and some card issuers have zero-liability policies.
But unless you report the card missing right away, you
might have to show proof that you didn't enjoy that meal at
a 4-Star Restaurant or purchase that $1,000 necklace.

Some credit card issuers send up red flags when they see
unusual activity. Thus it is wise to let your card issuer
know that you will be on vacation, where you will be, and
how long you'll be gone. Otherwise, they could put a freeze
on charges if they can't reach anyone at your home to
verify that the charges are legitimate.

Using your credit card for vacation purchases can carry a
second benefit. Many card issuers offer loss and theft
protection - so if you buy something on vacation and that
something is stolen, you can notify your card issuer and
get a credit to your account. And of course, complaints
about merchandise ordered that never arrived are most
easily handled if the purchase was made with a card.

There's a reason why the phrase "used car salesman"
conjures up certain images - and that reason doesn't
completely revolve around engines and transmissions.

Car salesmen are masters at getting people financed to
purchase - one way or another. The trouble is, the way
might not be a benefit to you, even while they claim it is.

So, be prepared. Before you even consider visiting a car
lot, get your credit report and check your scores. If they
need some improvement, take the necessary steps, because
the better your credit scores, the better interest rate
you'll get on that car.

Don't wait for the dealer to check. For one thing, if the
score tells you there's going to be a delay, that inquiry
will harm it further. Secondly, not all dealers will tell
you the truth about your score. Remember, the higher the
interest you'll pay, the bigger their income.

OK, now you know your score and you've decided it's high
enough for you to go forward. Write down these questions
and make sure they're all answered to your satisfaction
before you sign anything. Remember, if it isn't in writing,
and signed, it doesn't mean a thing.

How much does this car cost - including taxes, license,
dealer prep - everything? How much am I getting for a
trade-in value? How much down payment must I have? How much
will I be financing after trade in and down payment? Are
there other fees, such as credit insurance? What Annual
percentage rate will I be paying? How many payments will
there be? What's the exact amount of those payments? What's
the total cost of credit? Include interest, fees, etc.

And last but most definitely not least: Is this the final
deal? When I drive off your lot, are we finished?

That last question seems odd, but it's an important one,
because this is the spot where unethical dealers pull the
"bait and switch."

They'll send you home with a car, give you 2 or 3 days to
fall in love with it, and then call with the bad news: The
lender refused the deal. But it's OK - don't panic. Your
salesperson has made a heroic effort and found another
lender who will approve the loan.

Of course, the interest will be slightly higher, and you'll
have to pay a small fee, but hey! You've got your car!

Don't fall for this. Unless the dealer can show you who the
lender is, and unless you can see documentation that
they've approved the loan - tell them you'll be back after
the financing is approved and the transaction is final.
They can call you when it's ready.