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Let's Talk Credit: Archive of Q&As by Jane McNamara

Credit expert and CEO of GreenPath Inc. Jane McNamara answers questions from readers about credit counseling and debt issues each week in her column, "Let's Talk Credit."
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How minimum payments are applied to small balances -- Don't slip up and forget a credit card payment when the balance is almost paid off. A late fee could be larger than your minimum payment ... (See Minimum)

0-percent balance transfer after debt in collections? Good luck -- Balance transfer offers aren't lifelines offered to people with bad credit, they're a deal for those who maintain good credit ... (See Balance transfer )

Tick-tock debt: Law gives 30 days to respond to collector -- When a debt collector makes first contact, federal law gives you the right to seek verification of the debt and to dispute it -- if you act quickly ... (See 30 day debt clock)

One mistake results in big credit score drop -- A single mistake on a card bill caused a huge drop in a customer's score and highlights a credit rule: The bigger the score, the harder the fall ... (See One mistake's credit score cost )

Thanks, Sis, but I'm ready for my own card now -- A man who got his sister's help to raise his score is ready to graduate to credit on his own -- taking his remaining debt with him via balance transfer ... (See Balance transfer)

Move beyond the starter card with a personal loan -- A perfect payment record on a starter credit card won't earn great rewards. Try a personal loan at the same bank that offers the rewards card you want ... (See Starter card)

Get that debt settlement offer in writing -- An offer to settle old debt for a 10th of what's owed may soun good, but get it in writing, and make sure you understand the consequences ... (See Old debt)

Authorized user backfire hurts son's credit score -- Adding their son as authorized user backfired after they both lost their jobs. Now his plan to buy a house is in jeopardy ... (See Authorized user backfire)

There ain't no cure for the bad co-signer credit score blues -- When you co-sign, you agree to take on responsibility for the loan -- and the credit damage that results if it's allowed to go into default ... (See Co-signer credit score blues)

Big bill, small credit limit: Know your options -- In one hand is a big bill. In the other, an offer for a credit card with a 0 percent interest rate, but a too-small credit limit. They're not the only choices, Jane says ... (See Credit limit)

Debt settlement vs. bankruptcy: Which damages credit score worse? -- Debt settlement means the creditor gets at least something back, so it damages credit scores less than bankruptcy, which wipes out debt ... (See Credit damage)

Got a medical card, but can't afford the procedure -- A dentist suggested financing a procedure with a medical card and then charged upfront; now the patient wants to cancel ... (See Cancel medical debt)

You don't have to wait for a zero-balance statement to avoid interest -- Caution is good, but you don't have to wait for a zero-balance statement to use a credit card again. Paying on time avoids interest charges ... (See Zero balance)

Shifting debt from credit cards through a mortgage refi -- Paying off credit cards via a home refinance could change your credit utilization and help your credit score, if you don't go charging again ... (See Refis and credit scores)

Pay the whole debt or pay part: Which helps credit score more? -- Much of the credit score damage was already done back when you defaulted, but paying it off can make you look better to other lenders ... (See Partial payment)

Paying all you can vs. leaving a cushion in savings -- If there's enough money to make a big dent in your card debt but not enough to pay it off, you have choices to make, and the right one depends on your goals ... (See Paying vs. savings)

Help! Mom trashed my credit -- It's tough to find that a card you never signed up for is dragging down your credit and chances for employment, but if you were just an authorized user, you'll get off easy ... (See Credit)

If authorized user goes bankrupt, account holder's credit not at risk -- Granting authorized user status to a partner who later goes bankrupt won't risk your credit, but watch out for any joint accounts ... (See Partner's credit)

Steps to building your credit before 1st auto loan -- A newcomer to credit, even someone who's handled credit well so far, won't have a great score. Additional work is need to get a good first auto loan ... (See 1st auto loan)

How rapid rescoring works to improve a credit score -- A rapid rescore can be requested by a mortgage lender to quickly undo damage from an erroneous credit report, but it won't erase your old mistakes ... (See Rapid rescore)

What helps credit score more: Pay debt all at once? Or in bits? -- Paying all at once may be harder on your budget, but it's the fastest way to get a crucial credit scoring ratio back out of whack ... (See Pay down entire debt)

Don't confuse introductory rate, deferred-interest deals -- Interest accumulates like a ticking bomb on deferred-interest deals, exploding into huge charges if you don't pay the balance in time ... (See Intro vs. deferred)

How long can a judgment impact your credit score? -- Once you have a judgment against, you, it's bad: Some state laws allow them to be in force for decades. But it may fall from your credit report sooner ... (See Judgments)

Erroneous loan default report won't affect other credit accounts -- When a large error claiming you defaulted suddenly appears on your credit, you have to fight to remove it, but it won't impact other loans ... (See Not my debt)

Next steps if your settlement offer to a debt collector is rejected -- Once negotiations over a debt stall and collection efforts reach the legal threat stage, it is better to have your own attorney ... (See Debt collection)

Options for overcoming thin credit -- If you've had little or no credit history and have no income, secured cards and becoming an authorized user are your best options ... (See Overcoming thin credit)

Having trouble making your credit card payments? -- Do your best to continue making minimum payments on your cards. For any cards that you are not able to pay, communicate regularly with the card issuer to let them know the status of your situation ... (See Late payments)

Should you remove money from your retirement savings? -- Generally, it is considered a bad idea to take money out of a retirement account to pay off debt, particularly if you must pay early withdrawal fees ... (See Retirement withdrawal)

Despite settlement, demands to repay old debt resurface -- A collector's new demands you pay an old debt should go away if you got written verification of the settlement agreement. If not, take these steps ... (See Written verification)

Death announcements serve notice to creditors -- A published death announcement serves notice to creditors that the clock has started ticking for them to file claims against the estate ... (See Death notices)

What percentage of available credit should you stay under? -- How much of your available credit should you use to keep a high credit score? There's no one-size-fits-all answer, but the less credit you use, the better ... (See Ratio)

Tips for building credit before renting a home -- Landlords commonly check the credit history of potential renters; knowing and polishing yours can hand you the keys to a new home ... (See Credit check)

Can card issuer send bills just 11 days before due date? -- The Credit Card Accountability Responsibility and Disclosure Act of 2009 says consumers should get 21 days from the time the bill was sent until it's due ... (See Due dates)

Cards maxed out for 10 years? Perhaps you need a plan -- If you've lived for a decade with maxed-out credit cards, consider a debt management plan, but pick your counselor carefully and know the credit impact ... (See Debt plan)

Adding a spouse as authorized card user to boost score -- Couples looking to buy a house can buff their team credit score by having the person with better credit add the partner with worse credit as an authorized card user ... (See Score)

Seeking low-interest cards in quest for a better credit score -- If you're trying to recover from bad credit, will canceling old cards and opening new cards improve your credit score? ... (See Credit score)

Yes, debt collectors have the right to collect, and sue -- Some people mistakenly believe that when a debt is charged off, the obligation to pay disappears. Not so. Debt collectors have the legal right to pursue, and sue, you ... (See Debt)

Bankruptcy's credit damage worse than debt settlement's -- Both hurt badly, as they should, since they're serious debt defaults. But bankruptcy causes the greater credit score damage ... (See Bankruptcy vs. settlement)

Credit mix and maxing out: Undoing damage from a heavily used card -- If you have one credit card that's close to maxed out every month, having a mix of other types of credit will help soften any credit score damage ... (See Credit mix)

Sorry, repaying loan from mom won't help your credit score -- It's good you're paying back the personal loan from your mother. You're a fine son. But that doesn't count to credit bureaus ... (See Credit score)

Is it OK to close a card before I buy a condo? -- Closing a high-fee card can be a smart thing to do, but not when lenders are considering you for a home loan. Any credit score hit may cost you ... (See Credit score)

Will making minimum payments damage my credit score? -- Consistently making minimum monthly payments on a high balance is a dangerous habit that can damage your credit score if your financial situation worsens ... (See Minimum)

My 88-year-old mother lives on cash advances -- A mother who has been supplementing Social Security by taking credit card cash advances needs a financial intervention -- and a budget ... (See $40,000 debt)

I'm buried in debt. Can I just stop making payments? -- If you're swamped with credit card debt, it may be tempting to stop making payments and hope the problem goes away. Sorry. It won't ... (See Stop paying)

Can a car dealer garnish my wages after selling me a lemon? -- Every car owner's nightmare is to get stuck with a trouble-prone vehicle. Can a dealer garnish your wages if you can't afford to pay off the loan on a useless auto? ... (See Garnish)

Stroke, spending spree leaves family with debt emergency -- After his wife suffered a stroke, she racked up card debt. He may be able to argue diminished capacity to have it dismissed, but should be prepared to pay up ... (See Health debt)

Have I fallen prey to identity theft? -- It's relatively easy to find out if you've fallen victim to identity theft, given the availability of credit reports and online billing statements. Clearing up an identity theft issue, however, is more difficult and may require contacting local authorities or placing a freeze on your credit report. ... (See Fraud)

The path to a lower interest rate -- Most banks and credit unions tie their credit cards' interest rates to the prime rate, but knowing the prime rate alone won't lead to lowering yours ... (See Your rate)

Even with very old debt, don't ignore collection efforts -- The statute of limitations doesn't bar collectors from trying to get you to pay old debts, but you have rights and can stiff-arm them easily ... (See Old debt)

Oops! I bought something with my 0-percent balance transfer card -- If you transferred a balance to a 0-percent card and then bought something with it, you'll need to do some fancy minimum payment math to avoid interest charges ... (See Oops)

Servicemembers Act helps, but soldier, straighten up your debt -- The Servicemembers Act limits rates for loans to active-duty military personnel, but controlling debt should be a soldier's first financial duty ... (See Servicemembers Act)

Settling a debt? Verify it, and get everything in writing -- If you want to settle a debt with a collector for less than owed, do it safely and permanently by following these steps ... (See Settling debt the right way)

Want to help a relative in debt? Do it carefully -- Sure, you can help a relative overwhelmed by debt. Help her negotiate, consolidate -- but be careful about taking that debt on yourself ... (See Relative in debt)

Old debt, new collector: Negotiate? Ignore? Or pay up? -- When an old debt resurfaces as you're trying to make a credit comeback, getting it listed as paid in full does the most benefit to your credit, but the most harm to your cash flow ... (See Old debt, new collector)

If you have the choice, pay off that big debt -- When a generous uncle offers to pay off a $30,000 credit card debt, say thanks and do it -- then figure out how to pay him back and stay out of debt ... (See Pay off debt)

How card companies report credit utilization to bureaus -- Card issuers vary in how they report card use, which can affect your credit score. Usually, it's no big deal, but it becomes one when you want new credit` ... (See Credit use)

Keeping your credit score high in retirement -- As retirement approaches, it's time to review your collection of credit cards to make sure they're still working for you, and to keep debt low ... (See Credit score in retirement)

Two balance transfers means payment dilemma -- The federal CARD Act of 2009 created rules about how payments should be allocated when there are multiple rates, but not for multiple balances ... (See Payment allocation)

Debt lingers on credit report even after garnishment, repayment -- Through garnishment, an old debt has been repaid, but the credit damage can linger for years. The good news? It fades with time ... (See Old debt and credit reports)

Help! My sneaky sis used my credit card, damaged my credit -- When family is involved in fraudulent card use, the choice is tough: Silently suffer the credit consequences or rat out a relative ... (See Fraud)

Debt pay-off choices: Less now or a lot later -- You can save now by paying an old debt at a discount, but consider your credit over the long run before making up your mind ... (See Pay debt now or later?)