How Does A Charge Off Affect My Credit

Monday, November 30th, 2009 at 11:19 pm

How Does A Charge Off Affect My Credit
How Does A Charge Off Affect My Credit

Does My Child Really Need a Credit Card?

It is an amazing statistic that children age twelve to seventeen spent $150 Billion in 2008. It is estimated that teens spent an average of $300 per month on their Credit Cards in that same year.

The average college student is carrying approximately $2500 in Credit Card Debt, while the average grad student is $8700 in the hole.

Credit Card Companies are pushing their wares to a younger and younger target market with earnest ferocity. As a parent, you should ask if your child really needs A Credit card at this point in his or her life.

At the very least, you should be teaching your children good money management skills. Here are some ideas.

·Opening bank accounts should be a first step for young people. They must have both a checking and savings account. You, as their parent, should teach them proper money management from these funds before even the discussion of credit cards.

·Determine, through the use of these accounts and your sound judgment as a parent, whether your child can actually manage money responsibly.

·If he or she is doing well with the bank accounts, you can open up the discussion about credit cards. You need to explain exactly how credit cards work, what interest rates are and why they increase, fees, penalties, limitations, and restrictions on credit cards. Make sure they understand Credit Scoring and why a good score is important. Make sure they understand the risks of a credit card, because they already know the benefits. Be certain they understand that a credit card does not represent free money and that this money comes due every month.

·Research the different cards available together and suggest what card you think is best suited to your young person’s needs and abilities.

·Oversee their credit card use. Allow them to get in a little trouble if it happens, like eating a late payment charge or something else that will have no affect on their Credit Score.

·Bail them out if necessary. Do it before things get out of hand. Don’t allow your child to slide into high interest rates and negative Credit Reports. Bail them out and then straighten them out.

Consider a credit card to be a life lesson. If you think your child is ready for the training, give them the opportunity to learn. If you find out, together, that they can’t handle it, step in and take over.

All kids these days want that shiny flashing card in their name! But remember, it is not a toy! It is a tool to teach financial lessons. What will you remember while giving a credit card to your kids? Chintamani Abhyankar provides useful advice.

About the Author

Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. He has written many books explaining inside secrets of the magic world of personal finance. His famous eBook Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax.

How much does one, small negative item affect your rating?

A year ago my Credit Rating was 800+. Since then I had a dispute with a cellphone company over an early termination fee. I now have a single $175 charge off on my record. I have an explanation/dispute posted on the report. So will this item reduce my rating very much? Is it worth working to have it removed?

Probably not a lot but I would pull my own credit to be sure. Also, as long as you stay above 720, it shouldn't hurt your financing. Having said that I would still dispute the charge on all 3 Credit Bureaus. It's a bit of a pain but with all the creditor tactics (particularly cr. card cos.), and credit tightening going on today you never know. Also, creditors often will sell a debt to another collection agency if not collected so it might eventually end up on your credit more than once. They also may show it under a different account number making it look like more than one debt. Best to be cautious. Below are the 3 bureaus.

http://www.mortgage-bad-credit-new-home.com

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