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Free Credit Checks

It has been stressed many times over by the Federal Trade Commission (FTC) and many consumer-advocacy organizations: credit reports should be, and is, free. Despite their efforts though, there are still a number of unscrupulous companies that want to seek to abuse consumers. These firms also divert consumers away from a government-backed site where they can get easy access to their free online credit report.

Even one of the credit bureau, Experian, has gotten the ire of FTC because of their The site has been under the FTC’s watch for some time now because they mislead people into believing they need to pay a certain fee to get their credit report. Additionally, another one of their tactic is to use the report as bait so that people will sign up to the $14.95 a month service that alerts members to changes in their status.

The government itself has not taken an active stance in discrediting the service, which is fast becoming a $1 billion niche. Currently, the biggest player in this niche is Experian. The company’s market share is over twice that of its three competitors. Experian spent $54 million on television advertising to attract the attention of this market.

The main issue with credit monitoring services is that most don’t actually need it. Most people who have signed up often do so unwittingly. Basically, all a credit monitoring service will do is provide consumers with updates about their credit files. While the service can be beneficial for identity theft victims, it is only a waste of money for the vast majority. Most individuals don’t modify their accounts drastically, and when they decide to, they are typically aware of what it will do to their credit rating. If any errors occur on the report, checking it and reporting to the appropriate credit bureau is often enough.  The greatest use for these monitoring services that I found was when I was taking actions to improve my credit score.  I was able to monitor my progress and see how my actions directly impacted my score.

The Signal of Recovery? – Warren Buffet Buys an Ailing Railroad Company

Warren Buffet’s move to buy a railroad company has garnered a lot of attention. His purchase is not only seen as an investment, it is also widely viewed by others as a sign that the recession has bottomed out. As many know, Warren Buffet is known by many as one of the greatest investors today. His firm, Berkshire Hathaway has a significant amount of “cash hoard” from his previous initiatives.

How Much Did Warren Buffet Buy the Company For?

The firm will be buying the Burlington Northern Santa Fe Corp. at $44 billion ($100 per share). During the last year, the stock price of Burlington has dragged the performance of the Dow Jones Transportation Average. Financial analysts believe that Buffet has paid 18.2 times Burlington’s estimated earning for 2010. The move is not characteristic of the revered investor especially with his past history of not paying a premium when investing new capital. As a result, many think that the explanation behind this is that the man sees hidden potential in the company.

Contrary to Market Trends

Transportation is an ailing industry. As of the November 2 market close, its stocks were dragging behind the entire stock market in the United States at a margin of 15.94 percent. In addition, the number of passengers that the rail services are depressed, a key indicator of an economic downturn.

The Association of American Railroads announced that for the week ending Oct. 10, there was weak demand for goods all over the United States. On the West Coast, it was down 15.4 percent and on the East; it was down by a staggering 19.7 percent.

Given all this, Warren Buffet’s decision to invest in the railway industry come a surprise to everyone. However, even if it proves to be a good move in Buffet’s part, it isn’t necessarily an indication of an economic recovery.

Credit Card Debt – The Worst Things You Can Do

When it comes to money, no one can make all the right decisions all the time. Most people have done things they later regretted, especially when it comes to credit card debt. It may be a simple thing like getting charged $3 for withdrawing cash from an out-of-network ATM machine or a big mistake like maxing out your cash advance option without any apparent means to pay for it.

Some mistakes are easily resolved while others take years to sort out. Whatever the case, blunders happen when it comes to money management. The important thing is to understand the severity of the transgression. So in this article, we will score common mistakes on a scale of 1 to 10 based on its impact on your finances:

Paying Past Due Date: 5.5

Credit card issuers are never happy with late payers. Because of this, they have severe penalty charges and charge high interest payments for individuals who pay past the due date. In addition, some issuers even report your transgression to the credit bureaus so your credit score will suffer as well. If you’ve been an on-time payer in the past, some companies may let it slide. Just make sure to call them and ask them to waive the interest fee as well.

Paying the Minimum: 5

Generally, credit card companies earn the most from slow payers. Paying only the minimum might not affect your credit score but you might end up paying more on the interest than the principal. This is not a good practice because it keeps you in debt for a lengthier timeframe.

Missing a Payment: 9

This is one of the worst mistakes you can commit if you have a credit card. You will be slammed with high interest rates, penalty fees, and other charges. As if that’s not bad enough, your credit score will also take a huge hit. Because of this, you will need to pay more when you take out a loan next time. In essence, missing a payment is a no-no. Pay the minimum at the very least.

Tighter Credit for American Business Owner

Majority of small business owner in America can tell you how difficult it is to secure sufficient loan for their business. This difficulty is never more apparent than today as banks tighten credit in an effort to stop massive losses. The effect of this constraint is not only being felt by individual businessmen, but by the real economy. When expansion plans and prospective growth are hindered, overall economic growth comes to a standstill.

And the problem is, there are very little indications that banks will relax their lending standards in the near future. A survey conducted by the Federal Reserve Board revealed that senior bank officials expect that credit will still be tight until at least the middle of 2010. This credit squeeze points to an aversion to risk among today’s lenders. It has more to do with their concerns about the economy than the viability of individual businesses.

Banks are also worried about the high unemployment rate and their losses as credit card charge offs increase. As they expect more troubles in real estate, they will continue to hold on to their capital. Sam Thacker, a partner at Business Finance Solutions said that “the banks are just deathly afraid…I don’t see commercial banks coming back to the market anytime soon.” Although the above view might not sound good today, it might be healthier over the long term.

Right now though, businesses aren’t very happy with the banks’ reaction. Economists agree. They believe that bankers are overreacting because even stable companies are finding it difficult to borrow. But all is not bad news. Banks depend on borrowers to make money. Raymond Davis, the chief executive of Umpqua Bank said that “banks want to lend money” but the effects of the recession are still being felt. Be that as it may, without the banks’ help, the economy might take longer to recover because money is needed to stimulate demand and growth.