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Getting Out Of Debt in 10 Steps

1. Step 1: Pick the Best Offers

For the past several months we've been working feverishly to develop a scientifically sound method for tracking the arrival of the single best credit card solicitation with amenities unequaled by all others. We've modified the experiment so that you, can do it at home:

1: Save all the credit card offers that you receive over the next two to three months. (This will probably require a spare bedroom or at least a large portion of unused garage and a fairly sturdy set of shelves.) After three weeks, if you are an average red-blooded consumer, you should have filled about four crates.

2: Now, organize them by card issuer. Visa in this pile, Mastercard in that pile, regional department stores in another pile.

3: Further divide them by platinum, gold, silver, bronze and within those piles by interest rate (5.9%, 6.9%, 9.9%, etc.).

4: Now take all the "absolutely LAST TIME you'll receive THIS offer!!!" offers (random capitalization, italics and over-punctuation is theirs) and put those in a separate pile.

5: You should now have one pile.

What you will have learned from this little exercise is this: Offers trumpeting "0% Interest!" or "Free Miles With Every Dollar You Charge!" are tempting. But they are hardly rare. More than 1 billion solicitations are mailed out each year. We're pretty sure a few of those have been slipped into your mail slot.

And that "Absolutely LAST TIME you'll receive THIS offer!" offer? It is probably just the first of about 3,704 nearly identical solicitations that are addressed to you.

The offers for credit weren't always so plentiful. Back when bell bottoms and moon boots were big the first time around, lenders extended credit only to the most stable of customers -- those with pristine credit records who had never fallen delinquent on payments. Then lenders got Wise. In the '80s they jacked up their lending rates and granted long lines of credit to the masses, figuring that the number of people who would default on credit card payments would be nominal compared to what they could make from interest and fees.

They figured right. There are more than one billion cards in circulation -- four for every man, woman, and child -- with the average cardholder carrying a $5,800 balance from month to month and paying 18.3% in interest to do so, as we mentioned in our introduction.

We hope you take away one important lesson from this brief preamble: Fools don't fall for just any credit card come-on. They watch out for outrageous annual fees and low-interest rate offers that last less than 6 months. Fools pore over the fine print for restrictions on air miles and other rebate "deals." We know it's only a matter of days before the right offer comes along -- one with no annual fee and at least a 25-day grace period. Surely one of those one billion mailers is right for you.

Now, how to handle the Creditus Cardus Solicitationus flood.

2. Stop the Solicitations

Once you have found your dream credit card, you may want to turn off the solicitation faucet... not only because it makes it hard for your mailman to fit in your mailbox the 42 catalogs for meat, cheese, underwear, and gardening products you receive each week, but because they are a major contributor to credit fraud and theft.

So-called "identity theft," where someone opens an account with your name, social security number, or other identifying information, is a growing problem. One way it happens is when the thief puts his own address on the "special offer" you threw in the trash can and sends it in. The card is delivered and maxed out, and you may never know about it until you get bills for things you never bought or your loan is denied due to unpaid credit cards.

Law enforcement agencies and credit bureaus are just beginning to research the extent of this type of fraud, but the National Fraud Information Center says it costs financial institutions nearly a billion dollars a year. By law consumers cannot be held responsible for more than $50 if they are the victims of fraud and report the theft promptly, but banks and creditors get us all to pay with higher fees and interest rates.

Thanks to amendments to the Fair Credit Reporting Act, which went into effect September 30, 1997, there are steps consumers can take to avoid fraudulent reports and damaged credit ratings.

The amended Fair Credit Reporting Act will help consumers and borrowers. It makes it the reponsibility of retailers and lenders which provide credit information to credit bureaus to insure that the information they provide is accurate. Also, you have the right to see your credit report to make sure that it is complete and correct -- your report is no longer the mystery-shrouded chronicle it has been in the past. (So if you really do want to get those pre-approved credit card offers, but you aren't because of some damning error on your credit report, the credit bureau and its informers have to correct your report. And it is your right, and also your responsibility, to make sure that they have.)

As far as your junk mail-stuffed mailbox is concerned, though, the best provision of the amendment is Section 604, § 1681e. Election of Consumer To Be Excluded From Lists:

"A consumer may elect to have the consumer's name and address excluded from any list provided by a consumer reporting agency... in connection with a credit or insurance transaction that is not initiated by the consumer by notifying the agency... that the consumer does not consent to any use of a consumer report relating to the consumer in connection with any credit or insurance transaction that is not initiated by the consumer... Each consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall establish and maintain a notification system... jointly with other such consumer reporting agencies."

Yes, you can end the flood of pre-screened credit card offers! There are three main credit bureaus in the U.S.: Equifax Inc., Experian Inc., and Trans Union Corp. They have established a system so that consumers may remove themselves from all pre-screened credit offer lists via notification to any of these three bureaus. Removal from these lists is effective for two years after the request is made.

The credit bureaus each have extensive websites which explain marketing list opt-out and how to request it, but you cannot opt out online.

Equifax : http://www.equifax.com/consumer/faqs/credit/faqtxt_p.html

Experian : http://www.experian.com/customer/index.html

Trans Union : http://www.tuc.com/default.asp?Folder=Consumer

The Federal Trade Commission is the agency responsible for enforcing this law. Full text of the law and other consumer information is available at http://www.ftc.gov/

Interpretations of the law and consumer advice can be found at http://www.acb-credit.com/, the website of Associated Credit Bureaus, Inc., the trade association for U. S. credit bureaus.

Now, onto the the biggest trick in the book.

3. Step 3: Don't Play by Their Rules

There is only one tragedy greater than standing in your driveway at 6 a.m. on a Saturday selling your Flowbee haircutting system for five bits to an early-bird shopper. That is to be still paying it off on your Visa when this transaction takes place. That's exactly what will happen if you pay by the guidelines put forth by your purveyor of plastic, otherwise known as Paying The Minimum Amount Due.

Fools don't pay by their rules.

Revolving credit cards (unlike American Express, which requires you to pay the full balance each month) require only a minimum payment of just 1.5% to 2.5% of your outstanding balance each month -- a calculation cleverly designed to prevent you from paying off your balance before the apocalypse. Seriously, pay by their rules, and it'll take you 44 years and 1 month to pay down a balance of $4,500, even if you don't put another penny on the card once you reach that limit.

And how much will $4,500 in cullottes, New Kids on the Block CDs, and products guaranteeing they'd permanently remove unwanted hair or make desirable hair grow end up costing? About $17,000.

As we urge in Step 2 of 13 Steps to Investing Foolishly, the best financial decision you can make is to pay down your debt -- before you even start investing. Ask your kid, your niece, or the tike behind you in line at the grocery store, "Which sounds better, losing 18 percent of your cash a year, or making 12 percent on every buck you sock away?" Go ahead. We'll wait.

In fact, while we're waiting, we'll do the math. Take an investor who comes into a sudden $3,000 windfall. Although she has $3,000 in debt, she has heard about the great returns she can get in the stock market. If an average year on the stock market pushes holdings up 12%, can she beat the 18% growth rate on her debt? Nope.

STOCK versus CREDIT CARD

  Stock @ 12% per Year Credit Card @ 18% /Year
At Launch $3,000 $3,000
Year 1 $3,360 $3,540
Year 2 $5,287 $6,863
Year 3 $9,317 $15,701

A decade later, her debt has grown to over $15,000, her investments have grown to over $9,000. Though she started with enough money to eliminate the debt, she's now in the hole over $6,000. Until she sells those stocks. Then she'll have to pay 30% of the profit back to the government in capital-gains taxes. So she's actually out more than $9,000.

So you see, Fools, that money in your savings account earning 1.5%, that can of change atop your dresser, even that portfolio that is bringing in above-average returns will not beat the interest accruing on your credit card. So roll up the dimes and pennies, dip into that savings account, even hold off investing, and pay down that debt. Use our Fool credit card calculators to figure out what it will take. Make a plan, and then stick to it.

Next up: A closer look at how your lender calculates your interest rate, and why, if you are truly Foolish, you shouldn't care.

4. Step 4: The Interest Rate

Lenders use a bafflingly complex system of pulleys, ball bearings, mirrors and Boolean algebra to calculate your finance charge. In the end, most come up with a figure somewhere between 0% to 32%.

Some banks charge a fixed APR (annual percentage rate) that doesn't change, while others charge a variable APR which is tied to an index, such as the prime rate. The Schumer Box -- which must legally be included on every credit card solicitation -- contains all a card's vitals. If you can't figure out your card's APR by looking at your monthly statement, simply call the customer service number for a translation.

Chances are that you carry a card that charges interest on the average daily balance, which is calculated by adding each month's daily balance and dividing that number by the number of days in the month. Many have a grace period during which you do not accrue finance charges. If you do not pay off your balance in its entirety for each billing period, however, you will accrue interest on new purchases from the day they are posted.

The interest equation takes on labyrinthine proportions when you try to figure out whether or not it is based on two months of billing cycles -- the current and the previous -- and the exact length of your grace period. Some lenders use an "adjusted balance" method where the previous month's payment is subtracted and the finance charge is based on the remaining balance.

None of this matters if you pay your balance in full each month. If you can't pay it off, find a card that excludes new purchases from the interest calculation period.

Penalty Rates

Once you have figured out your APR, your lender will probably change it. In fact, credit card companies are not required to notify you in advance before they move the decimals and change the digits. You agreed to let them do so at any time when you signed up for their card.

What raises their ire? Your spending habits, for one. Even if you pay all your bills on time, you may get flagged. Your creditor may look at your credit records every quarter to evaluate the amount of debt relative to the amount of your current income. One recent notice received by a Fool staffer stated that customers could not increase "significantly" the amount they spent on another unsecured card. It defined "significant" as $2,000 or more. Keep your eye on your rates if you plan to make any big purchases.

Your bill-paying habits can also affect your interest rate. If you miss a few payments you could be subject to a penalty rate of up to 32 percent. So keep close tabs on when your payment is due.

Teaser Rates

Like a cotton candy buzz, teaser rates don't last. But they are darn tempting. Creditors are now making it more difficult to continuously transfer balances from one low-interest-rate card to another. If you toss cards aside like wet-naps after a rack of barbecued ribs, be prepared to pay a penalty.

Here's a typical scenario: An offer for an eye-poppingly low rate card arrives in your mailbox. You jump at the chance to transfer a heap of money you owe to a high interest card to the new card. After six months, the interest rate on your new card jumps to post-promotional levels -- usually in the high teens or low twenties. But you've already got another low-interest lender lined up. You transfer your balance, and, boom, the dumped card charges you retroactively the higher rate because you didn't read the microscopic print which points out that you cannot transfer a balance for an entire year.

Before you sign up for a card with a low, low interest rate, find out what that rate applies to -- New purchases? Cash advances? Balance transfers? Watch out for cards that force you to pay a retroactively higher rate or charge you a penalty fee if you cancel the card. And don't fall for one that expires sooner than 6 months.

Lowering Your Rate

If your current lender is charging you more than 12% interest, it's time to re-neg-oti-ate, Fool. Use our Foolish Rate Negotiation Dialogue (tm) below to bully your lender into lowering your interest rate.

You: "I just got this incredibly great offer from First Union Banc USA Nation's Edge Choice card for a Titanium card with a fixed APR of just 5.9% for the rest of my living days! I don't really want to switch cards, your service has been great. But I've noticed that the interest rate you're offering me has crept up to 43.9% in the past year. I'm going to have to transfer my balance unless you can lower the interest rate."

Them: (The sound of typewriter keys tapping and your credit and payment history being scrutinized.)

You: "Did I mention the free toaster?"

Them: (The sound of fake typing as the operator tries to psych you out with silence.)

You: (The sound of you filling out the First Union Banc USA Nation's Edge Choice card application.)

Them: "Uncle! We'd like to keep you as a customer, so I am prepared to lower your interest rate, and waive your annual fee if you choose to stay with us."

At this point they should offer you something around 12%. (You can hold out for the bagel slicer if your kid is pining for a Barbie doll guillotine.) If you get a dud operator who isn't feeling generous, ask to speak to a supervisor. Granted, if you're perpetually late with your payment, yell at dogs, or litter, your lender may prefer to let you walk. So be prepared to follow through with First Union Banc USA Nation's Edge Choice. But if you have a solid track record with your card you should have no problem negotiating a lower lending rate.

Another tactic is to remind your lender that he is making money off of you, even if you pay off your balance each month. Credit card companies make 1.3% to 2.5% from the merchants on every dollar charged. You can use this as leverage to get fees removed and reverse grace period adjustments. Simply keep track of how much you charge each year. When your lender tries to hit you with a $45 annual fee, call and remind them that they got $1250 per year (or whatever the amount was) in merchant fees, which they won't get next year if you cancel your card. Sit back while the customer service rep grovels.

Next up, the most important part of a debt-free Fool's lending agreement -- the grace period.

5. Step 5: The Grace Period

If you're in debt right now, heed all of our yammering about the hazards of minimum payments and creeping interest rates. But if you pay off your oustanding balance every month, the grace period is the first thing you should note when shopping for a lender.

The grace period is the time between the close of your billing period and the date your payment is due. This float time is usually around 20 to 30 days long.

If you do pay off your card every month, we'd first like to applaud you. (Fools the world over are rising, removing their jester hats, and clapping wildly.) Your grace period enables you to take out a short-term loan from your lender when finance charges do not accrue.

If you do not pay off your balance each month, read the next paragraph twice... and out loud: Those who don't pay off the entire balance every month get a double whammy -- they pay interest on the balance that they did not pay off, as well as interest on every new purchase as it is posted to the account. Ouch. (There are many cards that exclude new purchases when they calculate interest. If yours doesn't, and you often carry over a balance, find one that does.)

If you are going to pay your bill late, call your lender and find out how much you will be charged and include that amount in your check. Otherwise, the fee will appear as a balance that rolls over to the next month, eliminating the grace period.

One Fool wrote to us about what she thought was a questionable finance charge on her card. When she paid her bill, she mistakenly made out her check for one penny less than the total of the amount due. That penny carried over to the next month's billing cycle, eliminating her grace period. She was charged interest on the entire amount of the previous month's bill. All because she was short one penny!

There is usually no grace period on cash advances. On top of that, lenders often charge a higher interest rate for this "convenience." So on top of the fee you'll pay to get a cash advance -- typically around 2% of the total -- you'll pay a higher interest from the day you get it.

Two-cycle billing also cancels out the grace period. If you have a balance, your lender will include the prior month's and current month's activity to compute the average daily balance against which interest will be charged.

A final note: Watch out for lenders who pull the grace period out from under you -- especially if you are a "freeloader," someone who pays their balance in full every month. Remember, if your grace period is eliminated, you'll accrue interest from the day you make a purchase. The only way to avoid a finance charge would be to pay your bill before you received it. Hats off

Now that you've got a card with a reasonable interest rate and a lengthy grace period, let's look at some of the perks your creditor would like you to use.

6. Step 6: Don't Pay for Perks

You're the picture-perfect plastic user. You pay your bill in full each month. You deserve a reward -- go ahead, skip next month's payment. In fact, take this $1,000 "convenience" check to the mall and buy something pretty. Heck, we'll even extend your credit so that you can get the stereo you really want.

That's what your card issuer would like you to do. In fact, most of the "perks" offered by lenders encourage impulse purchases and spending beyond your means. And impulse buys are how most folks get in credit card trouble in the first place.

Fools know that they'll pay a king's ransom in interest if they skip a month's payment. And they recognize that those "convenience" checks usually come with a conveniently sizable fee, no grace period, and a higher interest rate.

Don't get us wrong. There are indeed reward cards that offer genuine perks like airline miles and football-shaped clock radios. With most, the rewards are based on the amount you charge, not your outstanding balance. Some even require cardholders to carry a balance to cash in on the perks. If you have the discipline, you can rack up some good points without going into debt,

Before signing up for a charge card offering a reward, look at the annual fee (most carry one) and interest rate. (Unlike unrewarding cards, these issuers usually can't be talked out of waiving the fee or lowering the interest rate.) Factor these into the reward you are trying to earn. It ain't much of a perk if you pay for it then never use it.

Now, some of the naughty things lenders do.

7. Step 7: The Nerve

Surprise! Some lenders don't have your best interests at heart. Even the most reputable ones bombard customers with "perks" that are designed to pad fees and interest payments. Customers can ignore those carrots -- and we suggest that all Fools do, as you know from reading the previous article.

But in their pursuit of profit, some credit card companies resort to some rather underhanded practices. The fact that many of the most blatant offenders operate out of South Dakota and Delaware is no coincidence. Those states have more relaxed consumer protection laws and let banks raise interest rates and fees to levels that are illegal elsewhere.

Here are a host of offenses to watch out for:

Pursuing the un credit-worthy: Creditors often prey on those who are least credit-worthy by scanning credit records for telltale signs. If you are a student with no income or have recently emerged from bankruptcy, credit card solicitors would like to talk to you. They know that the recently bankrupt can't declare bankruptcy for another six years and that Junior probably doesn't know the first thing about budgeting.

The magically appearing annual fee: You signed up for a card with no annual fee. Then, Blammo! Out of the blue you find one. Some lenders start charging an annual fee to their customers who pay their bill off every month. The best recourse: cancel the card.

A sliding credit line: One really abhorrent practice is to entice a customer to use a cash advance check or a skip-a-month payment offer and then lower their credit limit. The maxed-out customer is then charged an additional fee for being above it. A variation on this theme is to simply lower the customer's credit limit once they reach it.

Mysterious fees: You may not have to pay a finance charge to get a cash advance. But most banks charge hefty transaction fees, which can be around 2% of the total amount and no less than $10. Also watch out for transaction fees for calling the toll-free number to check your balance, and penalty fees for account inactivity. (Don't forget about that credit card buried in your sock drawer).

The disappearing grace period: Watch out for lenders who pull the grace period out from under you -- especially if you are a "freeloader," someone who pays their balance in full every month. Remember, if your grace period is eliminated, you'll accrue interest from the day you make a purchase. The only way to avoid a finance charge would be to pay your bill before you received it.

These are just the ones we know about this week. The best way to combat any of these offensive attacks is to immediately cancel your card and tell your lender exactly why you are ditching it.

Next: Sure, it looks like chicken. Tastes like chicken. But don't be fooled by the look-alikes

8. Step 8: The Look-alikes

They look like credit cards, taste like credit cards, but all cards that say Visa and Mastercard aren't always "credit" cards. Debit cards and secured credit cards look just like conventional credit cards, but they work very differently.

Debit cards withdraw money directly from your checking account. When you use a debit card, you are paying with cash. Using a debit card can keep you within your means, provided you don't accidentally spend your rent on dog toys and frothy beverages.

But be aware that debit cards don't always offer the same conveniences, services, and protections as conventional credit cards. For instance, there is no grace period -- or float -- from the time you put something on plastic to the time you actually pay for it. And depending on your bank's policies, you may be charged a fee every time you use your debit card.

Many debit cards limit the amount you may purchase on the card to $1,000 per day, even if you have a checking account flush with cash. So a $1,500 Donna Karan frock will require one debit-card transaction and either a check (if the store accepts it) or a trip to the ATM. And if you don't have sufficient funds for the DK duds? You'll be liable for the transaction and be slapped with some pretty vicious overdraft fees.

Debit cards also may not offer the same rights consumers have with credit cards regarding purchase problems. Say the Chia Pet Menagerie you purchase during a late-night TV shopping spree turns out to be a single Chia guinea pig with seeds that never bloom. If you paid for it with a debit card, you may have no way to stop payment to Chias R Us.

Let's say a stranger in dark glasses takes down your debit card number as you're phoning Chias R Us. You may be stuck with unlimited liabilities for losses, should you fail to report the theft within a certain period of time (anywhere from 2 to 60 days). A lost debit card is like cash to a thief -- they simply have to forge your signature to use it. (Customers get a $50 maximum liability with most credit cards. They can be responsible for up to $500 in fraudulent debit-card charges.) Consumers recently raised a stink about this, and debit-card issuers like Visa and Mastercard have made moves to improve security and liability. Still, read the fine print and make sure your lender offers you the same protections as a standard credit card.

Secured credit cards also look like standard Visas and Mastercards. They let consumers with shaky credit histories deposit money into an account and charge goods and services against anywhere from 50% to 100% of the amount. Some charge exorbitant fees to even apply for the card. Make sure they will refund it if you are not accepted.

Now, onto the Debt Doctors.

9. Step 9: The Debt Doctors

Debt happens. And there are a lot of organizations that want to help you get out of it. The best known nationwide credit counseling service is the Consumer Credit Counseling Services (CCCS). It bills itself as a non-profit debt counseling service and has provided much-needed advice to those in serious debt.

Here's how it works: If a debtor's situation is dire enough (they accept only the hardest-luck cases), CCCS will help develop a debt repayment plan for a reasonable monthly fee, which could be as high as $50 based on your overall debts and income. (Should you use the services of a for-profit organization, do not use one that asks for a large up-front fee.) CCCS contacts your creditors on your behalf and gets them to lower monthly payment requirements and either notch down interest rates or do away with them altogether. Why the generosity? Creditors don't want you declaring bankruptcy and defaulting on the debt altogether.

Fools should know from whom the advice comes if they consult with CCCS. The organization is largely funded by "the credit industry" -- read: creditors, many of whom are credit-card issuers. They'll talk about a lot of options, but they'll never mention bankruptcy.

Some customers have nicknamed CCCS the "Credit Card Collection Service," saying the organization is more concerned with getting the creditor paid quickly than insuring that the debtor has enough monthly income on which to live. The debt repayment plans they peddle encourage customers to turn over their paychecks each month for CCCS to dole out among creditors. The organization decides whom to pay and how much.

Listen to their advice, adapt it to your needs, but never hand over control of your monthly income. In many instances you can negotiate lower rates on your own. But if your creditors number in the double digits, you may find it exceedingly difficult to get all of them to lower interest rates or work out an acceptable payment schedule. That's where the services of CCCS can come in handy. It has relationships with nearly all unsecured creditors and can usually negotiate lower rates.

If you do sign up for a debt-repayment plan from CCCS or any other organization, follow through. Should you renege on the plan, it can show up as uncollected debt on your credit report for seven years -- a red mark almost as bad as bankruptcy.

CCCS, and other organizations like it, develop debt repayment programs. (If you are in serious debt, read through our 9 Ways to Pay it Back.) There are other companies that offer to repair your credit rating -- usually for a large up-front fee.

Fools, there are only two things that will improve a bad credit record: time and re-established credit.

Debt doctors, credit repair clinics, and such organizations cannot remove negative information from your credit report if it is accurate, no matter how much you pay them. If you find information on your credit report that is outdated or inaccurate, contact the credit bureau directly to have it changed.

You can contact the three major credit bureaus at:

Equifax: http://www.equifax.com/

Experian: http://www.experian.com/personal.htm

Trans Union: https://www.tuc.com/default.asp?Folder=CreditReport

Next, we'll talk about why you should contact these organizations, even if you aren't having any problems getting credit.

10. Step 10: The Credit Report

Imagine a document that determines if you are offered a job, if you can move into an apartment, if you can open a checking account, and even if you can get insurance.

That document is called your Consumer Report, or better known as your credit report. This lovely little collection of personal spending habits is being used by more and more institutions -- not just credit card companies. The report contains details on where you've lived and worked, your payment history, whether you have declared bankruptcy, even whether you've been sued or thrown in the slammer.

For the most part, there are four instances when you'll pray your credit report is clean as a nun's rap sheet: When you apply for a loan or credit, when you apply for certain types of insurance, when you apply for certain jobs, and when you apply for housing (either to rent or for a loan to purchase).

The strange thing is that even though by law people have a right to see what is in their file (and correct erroneous information), they rarely do until it is too late. You, Fool, should check your credit report at least once every two years to make sure that everything on it is accurate.

Here's how you do it: First, you'll need a copy of it. The "Big Three" credit reporting agencies are Experian, Equifax, and Trans Union. You can order your credit report from each agency individually -- or order from all three agencies in one easy step at TrueCredit.com. Before you go ahead and request a report, we suggest you check out A Fool's Guide to Credit Scoring for an overview of the credit scoring process and tips on how to maximize your credit score.

If it turns out your record is less than squeaky clean, we've got some tips on how you can get your financial house back in order. What happens if, on the other hand, the information you have about your credit history and your official credit report don't match up? In order to bring databases up-to-date, you will typically be asked to mail the following: A photocopy of a paycheck stub showing current employer, address and Social Security number or a Social Security Card, a photocopy of a valid driver's license or other photo ID, and all the information needed to bring your report up to date.

Credit reporting agencies can charge no more than $8 for providing you with a copy of your report, and under some circumstances they must provide it for free. There's no charge if you've been denied credit, insurance, or employment because of your report, though you must request the report within 60 days of having received notice. Also if you are on welfare, unemployed and plan to look for a job within 60 days, or believe your report is inaccurate due to fraud, you are entitled to a free report.

Avoiding obtaining a copy of your credit report is sort of like avoiding the dentist, it will eventually come back to haunt you. It is also the first step in guaranteeing a long and happy credit history, where the words "credit report" do not have to be whispered.

As we mentioned before, there are a lot of companies that would like to help you clean up your credit report. It is worth repeating here -- only two things will improve a bad credit record: time and re-established credit. Get your own credit report and do it yourself!

Click here to go to Payoff Credit Card spreadsheet - Need Microsoft Excel to open

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