While the formulas are a secret, the elements of the FICO score are made public. The largest portion of your credit score is payment history, accounting for 35% of your credit score. The fewer times you’ve ever been late and the longer it has been since those late payments, the better.

So the number one thing you can do to improve your credit score is to pay your bills on time, month after month. If you’re not currently caught up, get caught up.

Another major factor that goes into your credit score is how much you owe. This accounts for another 30% of your score. Not only does this consider how much you owe, but the amount of your credit lines you are using. The smaller the balances, the better. If the amount you owe is at or near 80% of your credit limit, you are considered maxed out. After you’ve gotten caught up on your bills, the next thing to work on is getting the balances lowered. Bonus: this will help you save money as you’ll be paying less interest!

A third major factor is the length of your credit history, which figures for 15% of your credit score. This accounts for how long you’ve had the accounts, and how long it has been since there has been activity on your account. The longer you’ve had your accounts, the better, as you’ve proven your creditworthiness over time. If you have older credit cards that you no longer use, it is often best to keep them open, using them for small purchases a couple of times a year, and then immediately paying them off. Of course, if they have any time of annual fee, it is best to close them.

Of lesser importance are the types of credit you have and the number of newer accounts, each making up 10% of your score. For credit purposes, it is good to have some type of revolving account (credit card) and some type of installment loan (mortgage, car loan) currently or in your recent history. You also want to avoid opening multiple new accounts over a short amount of time.

The more you understand how your credit score is figured, the more you are prepared to improve that score.

Before August 15, 2010, financial institutions could automatically cover your expenses when you used your debit card and spent more than your remaining balance. For years consumers have been clamoring to stop this practice, wanting those debit charges to simply be denied. If you attempt to overstep your lending limit with a credit card, they will deny the charge…many consumers wanted the same to happen with debit cards as well.

The problem is not with the protection (which in essence turned the debit card into a credit card in many cases, or else simply withdrew the needed money from a linked savings account) but with the fees associated with it. At about $30 a pop, a day of shopping could turn into a $150 ordeal…on top of the money you were already spending (that you thought you had).

So should you opt-in like your bank or credit union wants? They do make it sound good…like you will be left out if you do not join. We all like to join in. However, they have their own profits to consider, and fees are a big area where they see profit.

The new Federal Reserve law was designed to protect consumers…and it will, if you do not opt-in.

How should the rule change how you treat your debit card? If you regularly use your debit card, you need to always be aware of your account balance, so you won’t face being denied at the register. This is a good practice regardless, and helps you keep a handle on your spending.

If you are unsure whether you have enough in your account to cover your expenses, either choose wisely to not purchase the item, or put it on a credit card. But if you put it on a credit card make sure you will shortly have the money in order to pay the balance in full. Getting charged interest and fees by the credit card company is no more in your interest than paying fees to your financial institution!

So while the financial institutions spin it to sound like they are offering you protection, what they are really asking you to do is give them permission to charge you fees. The good thing is that to opt out, you simply have to do nothing.

What is a Re-age?

When a creditor re-ages your account, they agree to restore current status. This change in status provides multiple benefits.

First, you no longer are required to pay for arrears. Instead of catching up through sending in back payments in addition to your current month’s payment, you can now send one payment each month. This is important when your budget is already stretched.

Second, you can say goodbye to late fees. That $39 to $45 a month that you were getting charged as a penalty goes away when your account is current.

A third major benefit to an account re-age is that your creditors can now report your current status to the credit bureaus. While your late payments will still be on record for 7 years, your scores will jump when your current status is reported. This current status will outweigh older late payments in your credit report, which will allow your scores to continue to climb as long as you maintain that current status.

Major credit card companies are restricted in how often they can re-age an account. You should understand that you may only get a maximum of 2 chances over a 5 year period to re-age your accounts. Therefore, they will not make the decision lightly. They want to make sure that you are serious about maintaining your account.

When you enroll in a debt management program, it provides proof to your creditors that you are committed to getting back on track. They will compare your program summary with your credit report to make sure that you are enrolling all of your credit card accounts. If they see multiple accounts with balances left off the program, there is a possibility that they may deny benefits until you have added those accounts. That is why it is imperative that you include all of your unsecured debt for maximum benefit.

To see how re-aging through credit counseling can benefit you, imagine this scenario. You have a credit card with a $200 a month payment. If you miss a payment, your next month may require $447 as a minimum payment rather than your usual $200. This includes 2 months payments, additional finance charges on your higher balance and a late fee. If you dare fall 2 months late, your interest rate will skyrocket to 29.99% or more, depending on the penalty rate on your account.

By enrolling in a debt management program, your creditor can re-age your account. Instead of a $447 minimum payment, your new monthly payment might be $160. Your payment could be lower or higher than this example. Your new payment primarily depends on which creditors you owe as well as specific details on those accounts.

If you fail to receive credit counseling before your accounts are charged off as bad debts, you lose the right to a re-age as well as the other benefits of a debt management program, such as lower interest rates, reduced payments and a rebuilding of your credit rating. You only have a limited window to act. Once an account approaches 4-6 months late, you can expect your lender to provide final notice of charge-off. If you miss their ultimatum, you get to deal with the nasty collection agents that will pursue collection of the defaulted debt. For more information about re-aging your past due credit cards, contact our financial counselors today.

Free tax preparation services are available to the elderly, the disabled and any household with less than $50,000 in annual income. This threshold is determined by the Internal Revenue Service to allow for free tax assistance to those who may lack the means to afford pricey services by paid preparers.

If you would like to benefit from this service, contact Vision Credit Education at 919-338-0882 or toll-free at 800-379-4720. You may make an appointment to meet with a trained VITA volunteer who can prepare your income tax return.

Since this program is also supported by the Internal Revenue Service, you may have your return e-filed. This allows for instant submission to the IRS, clearing the way for a prompt refund. Most federal tax refunds are received within 10 days through the service. There is zero charge for preparation, e-filing or refund services.

To receive any funding from the City of Raleigh during such difficult economic times shows how important this program really is. We are grateful for the opportunity to expand our VITA program to provide much needed services to the city residents that need it most.

Tax season runs from January 17 to April 15, 2011. Volunteers will also be on hand at limited locations prior to January 17 for anyone who needs to file a prior year tax return.

This removes one potential source of confusion that likely led to overdrafts from customers who thought their account balance was as high as what was posted in “Account Activity.” Now all transactions appear on that page.

Prior to May 2010, Bank of America would omit any pending or completed scheduled bill payments for the current day from the “Account Activity” listings. This resulted in an overstated account balance.

As anyone knows, when your actual account balance is lower than what you believe it is, you run a higher risk of over-drafting your account. Such a discrepancy in account balances has likely resulted in millions of dollars in overdraft fees over the years.

This change to Bank of America’s online account management console aids transparency and improves accuracy of account information. A better informed customer is better able to plan future payments and ensure they will have enough money in their account.

While Bank of America has finally embraced full transparency of their online banking, other major financial institutions have not. Since regulatory interference is unlikely, it will be up to the competitive market to put pressure on those banks that still do not provide a true balance to their customer.

Indeed, the entire Bank of America online banking experience is much improved. Users now have direct access to all linked accounts, including checking, savings, money market, credit cards and even investment accounts through Banc of America. Having access to all accounts facilitates payments and moving money around. It still takes a day to transfer funds from checking to investment banking, but I imagine this barrier will soon fall as well.

We recommend meeting face-to-face with a financial counselor whenever possible. CCCS of Northeastern Ohio provides face-to-face counseling. However, we also understand that navigating downtown Cleveland is not always the easiest chore.

Our counselors know how to deal with high limit credit cards that are burdened by heavy balances. Juggling multiple accounts can be stressful, since late payments are not an option.  Transferring balances have also become more expensive due to 4-5% upfront balance transfer fees.

Our counselors are certified as Accredited Financial Counselors and understand the types of benefits that major credit card companies frequently provide through debt management programs. Many of our clients were surprised at how they could successfully manage tens of thousands of dollars in high interest credit card debt.

Being in debt does not have to mean that you will have to file for bankruptcy. If you take action while you still can, you may be able to avoid the embarrassment and expense of bankruptcy.

We cannot promise that you can avoid bankruptcy. We cannot promise that all of your interest rates will be lowered. We cannot even promise that we can lower your rates. These are benefits typical of our debt management program and are enjoyed by our current clients, but they cannot be guaranteed.

This might be different from what you see on television from many of the so-called “debt relief” companies that profit from your misfortune. Of course, if you look at their Better Business Bureau rating, you might find that they cannot back up their extraordinary claims.

We at Vision Credit Education will help you evaluate your situation. We will help you develop a budget, analyze your debt situation and provide feedback based on our years of experience with other clients in similar circumstances. Of course we also know that no two clients are exactly alike.

That is why we take the time to tailor a plan to meet your needs. You cannot feed MasterCard before you feed your family. We will help you prioritize your needs and answer your questions about your available options.

We cannot tell you what to do. Instead, we discuss your options with you and support your decision on how to handle your situation.

If you are in Lorain, Avon Lake or Elyria, give us a call to discuss your financial situation. You may contact an Accredited Financial Counselor at 1-800-379-4720. Find out how you might benefit from the interest rate reductions and lower payments available through our program.

Allegro is one of many large debt settlement companies that skirt consumer protection laws. According to Alabama Attorney General Troy King, Allegro violated the Deceptive Trade Practices Act and the Sale of Checks Act.

Owner Keith Anderson Nelms plead guilty to violating multiple rules of professional misconduct. His Alabama law license was subsequently suspended.

Allegro failed to obtain a license from the Alabama Securities Commission, yet offered debt settlement services to Alabama residents. Approximately 175 of 15,000 total clients were Alabama residents.

Allegro made false, deceptive and misleading claims to customers in regards to its services. One such claim was that since Allegro was run by an attorney, that they would be able to achieve superior results over what other debt settlement companies could provide. The court came to a different conclusion:

Defendant’s debt settlement program failed to reduce consumers’ debt in most cases, negatively affected consumers’ credit ratings, and subjected customers to increased lawsuits and collection activities by creditors. It was deceptively unclear to Allegro consumers that Allegro Law would collect its fees in full before any funds were used to pay creditors.

In fact, the court found that instead of providing legal services as claimed, Allegro instead referred all cases to a third party that did not practice law, yet made claims to the contrary. This was a violation of the Deceptive Trade Practices Act.

These are the summary findings of the court in regards to Allegro:

(1)consumers were led to believe that Allegro Law, LLC was a law firm providing legal services, when in fact, consumers were not provided legal services; (2) consumers believed that Allegro was located in New York, when it was located in Prattville, Alabama; (3) consumers were not aware that they would be charged a fee of 16 percent of their total debt enrolled in the program and that 100 percent of their monthly bank drafts would go toward payment of that fee until the fee was paid in full; (4) consumers were deceived about the effectiveness of Allegro’s program and the certification of Allegro’s services; and (5) consumers were directed to stop making payments to creditors, which resulted in increased interest rates, late fees, further damage to their credit ratings, and additional and increased collection activities by their creditors.

Allegro clients are unlikely to see most of their money. It is unlikely that the court appointed receiver will receive substantially more than the $12 million seized so far. Splitting that $12 million between 15,000 unhappy customers would result in an average refund of $800. Once you count the legal bills of the receiver, the average could be far less.

For information about filing a claim for a refund, view the contact information for the court appointed receiver. Make sure you share your story so that you can warn others away from a similar fate.

Triangle Gives Back is an initiative of the Triangle Community Foundation, one of the fastest growing community service foundations in the Carolinas. What truly makes TCF unique is that they assist individual donors with planned giving while providing the oversight and accountability to ensure that those funds are being spent in a responsible manner to achieve the donor’s goals.

While the $250 grant itself is unrestricted, it will directly support our financial literacy efforts. Many of our clients are currently taking advantage of the free tax preparation through our Volunteer Income Tax Assistance (VITA) program.

We are finding that approximately 10% of our free tax clients are also taking advantage of a free budgeting session with a financial counselor, getting help with debt problems or getting started in our pre-purchase housing counseling program. We thank Triangle Community Foundation and their Triangle Gives Back initiative for the support they have shown in our programs. Thank you!

Which Accounts are Targeted?

If you charge more than $200 a month to your Citi card, then you likely will be spared this $60 annual fee. According to Citi, all of the letters were mailed out and affected cardholders have already received notification.

Accounts that are used less frequently and fall well below the $2,400 annual threshold are likely to see the fee. Citi did provide affected cardholders with the ability to reverse this fee:

However, because we value you as a customer, we wanted to give you an opportunity to have the annual fee credited back to your account.

Decisions to reverse the fee reportedly depend on the customer demonstrating that they do indeed charge close to that $2,400 annual threshold. Otherwise, it is likely that many of these requests will be refused.

The first annual fees are set to be charged on April 1, 2010. It is worth stating that this is not an April Fools joke!

If you want to opt out, the deadline is March 31, 2010. Here is the contact information:

Call Citi at 1-866-915-9425. If you choose to write them, include your name, address and account number in the letter:

What Was Amiss?

Specifically, I noticed that my credit card balance had increased from a $-17.53 to $46.47. Curiously, I wondered what was that $64 charge?

As a matter of habit, I routinely review all of my transactions to ensure that no fraudulent activity has occurred. A review of the account activity as well as the actual statements showed no transactions, yet the balance mysteriously showed that something had been charged.

The Culprit

My interaction with a Bank of America text chat specialist revealed the answer. This was her response:

please do not check the online banking balance as it is in correct.

The online banking is under maintenance and hence your are not able to see correct information.

Due to new card act that has been introduced, there will be a user friendly site for the customers to use it more efficiently due to that online banking is changing and there are lot of changes made I request you to do check it after 24 hours as we updating it as per the new card act from the federal government.

What she was referring to is the Credit CARD Act of 2009 that places new restrictions on financial institutions. It is expected to make usage of credit cards a bit less of a debt trap.

I was able to view the charge a few hours later. I will be sure to sign into my online account in a couple of days to see how they have changed the online experience. Hopefully it will make things even better.