Elisabeth Leamy Answers Your Questions

Credit cards and home loan advice.

This week, as I often do, I am answering questions from readers. Correction: I am answering questions and comments from readers. A month ago I started writing about ways to SAVE BIG, the title and topic of my upcoming book. The premise is that there are lots of ways to save more than $1,000 in less than a year by focusing on our top 5 costs instead of on what I call "Small Stuff Savings' -- like giving up your daily latte. I'm happy to say that my first few columns have generated an interesting dialogue. So below, I answer the comments -- and also criticisms -- you've posted or e-mailed me. Hey, I can take it! I was a rhetoric major in college -- the art of argument. I think vigorous debate is a pathway to good decisions and great ideas.

Credit Score Do's and Don'ts

Question: I would like to get my credit score without having to pay for it since I'm a senior. Can you tell me how to obtain my score? Thank you.
~BB, San Pablo, CA

Answer: BB is probably thinking of credit reports, which are now available for free. You can get one freebie from each of the big three credit bureaus each year, by going to www.annualcreditreport.com. There are ways to get free credit scores, but I don't recommend trying it unless you want to subject yourself to a blizzard of sales pitches. Fortunately, ordering your credit score is not expensive. It costs $16. Get it directly from Fair Isaac, inventor of the credit score by clicking here.

Comment:People, you can work for years to build your credit score, it goes up very slowly. But miss a payment and it will drop like a rock. So she could have saved a lot of time by just making the headline say "Pay your bills on time."

Answer: This comment came in response to my article on the "Don'ts" of having a good credit score. Rh2199 didn't bother to read the previous week's article on the "Do's" of credit scoring. In that article, "Pay on Time" was one of the top tips. So rh2199 is right -- just not very thorough!

Question: "You said in "Don'ts of credit score" that one's FICO score will be affected even if the person has a small balance like $25 on an account and it was not paid and went into collection. Well, I just read in Consumer Reports Web site a few weeks ago that FICO2009 does not take into consideration any balance smaller than $100. Who is right? You or the Consumer Reports Web site?"
~PH, Two Rivers, WI

Answer: We're both right. Older versions of the FICO scoring system count any unpaid balance against you. It's true that FICO revised its 2009 scoring model to ignore small, unpaid balances, however you cannot count on lenders using FICO 2009. Many lenders have not bothered to buy the latest scoring software or they use multiple versions to assess your creditworthiness. So don't ignore small balances! Pay them off in full, on time.

Paper or Plastic?

Comment: Having plastic is total BS and a huge money making scam. I have been plastic free. I feel lots more secure having my emergency fund and using cash for everything. The system can keep their precious credit scores. Paying cash hasn't stopped me from buying what I want.

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