Credit 101

Most financial advisors will tell you that it is never too early to build a good credit history, but it’s also never too late to start as well. This article explains what credit is and what it takes to achieve good credit history. Basically, credit consists of borrowing money with the intention and agreement to pay it back at a later date. Any kind of loan, such as student, home and car loans, and credit cards are examples of credit. In order for a lender, usually a bank, to agree to lend to you, the borrower, money, your credit history will have to be reviewed and be up to standard with the lenders credit policy. If you have good credit history, getting a loan for that dream house is in your future. Good credit, bad credit. You hear people talking about it all the time, but what does it mean? Having good credit means that you pay all of your bills and money you owe on time, all the time. Lenders know that you are responsible and will take bigger risks on you by lending you more money in the future. Bad credit means that you historically have not paid your bills on time and have increasing debts. Having bad credit makes it harder to get loans and almost impossible to get low interest rates on them. Many students and younger people might have no credit at all. That’s OK; we all start out at the same spot. Having no credit simply means that you don’t have a credit card or have never borrowed money from a lending institution, so there’s no recorded history of whether or not you are financially responsible. If you are new to credit, or have a poor credit history, here are the most basic and easiest ways to build and maintain good credit: First, make a budget for yourself to manage all of your expenses. Think of it as a daily schedule planner, but for your money! Be realistic with your spending abilities and keep track of what you spend your money on by saving copies of purchase receipts. Save receipts for everything from food and clothing to gas and movie tickets. Be sure to stick to it. Next, open a checking and savings account, or if you apply for a credit card, try to get the lowest interest rates possible and keep the balances low. If possible, pay the balance off every month and don’t miss payments. If you want to make a big purchase, save up for it instead of charging it on your credit card. Don’t buy on an impulse. Also, every bill, from rent to telephone to utilities, should be paid on time. On-time bill payments are a great way to build non-traditional credit and show lenders that you are serious about fiscal responsibility. Keep copies of cancelled checks and bill statements to prove that you have paid on-time. If you keep up with bill payments, ask your landlord or utility company to write a reference letter explaining how you have been a favorable customer and have had an outstanding payment history. Lenders like to see these forms of proof that you a responsible with your money. Once you are on your way to building and maintaining good credit, you’ll want to keep track of where your credit stands. This is done by viewing your credit report. Your entire credit history, including every time you use a credit card, make or miss credit card and bill payments, is included in the report. Any loan debts you have had over the last 7 years, and their payment history, are also included. In addition, your employment history is kept to show whether or not you can keep a job. Your credit report should be viewed at least once per year. Equifax, Experian, and TransUnion are the three companies that you can receive your credit report from. Be sure to check it for accuracy and contact the credit agency if corrections need to be made. Having good credit will affect your future for the better, so be smart with it. Once you have good credit, you’ll be able to get that dream house and car and have a financially secure life. Even your children’s lives will be affected by your credit, your ability to offer them the best life possible. Remember, you now have the knowledge and ability to take control of your credit and change it for the better.

Need a credit card no problem. and that s the problem

Need a credit card? No problem! And that's exactly the problem. In a nation where instant gratification is touted as a virtue, credit is available to anyone no matter what their credit history. This is causing personal and financial problems for many consumers who abuse the easy availability of credit and find themselves unable to pay back their loans. There was a time in history when extensive credit was available only to the aristocracy, and debt carried a social stigma for anyone else. The poor and middle class were carefully scrutinized when they applied for loans, and debtor's prison awaited those who did not repay their debts. Americans are more indebted than ever in the nation's history. The amount owed on loans for cars, homes and credit cards adds up to nearly 100% of annual after-tax income, according to a report in Business Week magazine. Yet, according to the Consumer Fedaration of America, this alarming level of indebtedness has not deterred the moneylenders: credit card companies have more tha $3 trillion of unused credit lines up for grabs, approximately $30,000 per American family. According to Fair, Isaac and Co. (FICO), the average consumer has access to $12,190 on all credit cards combined. Not everone is a spendthrift: more than half of cardholders use less than 30% of their total credit limit. However, one in eight is using 80% or more of their credit limit, and 1 in 10 have a total debt greater than $10,000. Cardweb estimates that 20% of American credit cards are maxed out. There are specialized credit cards being offered to all kinds of borrowers, from students to small business owners. Each demographic group is targetted with a specific sales pitch. People with good credit ratings can easily access lines of credit at an interest rate of 5% or less over the current prime rate, and such applicants are also qualified for Platinum credit cards. However, about half of cards in circulation are Gold cards, which require just $10,000 in annual income for qualification. The credit industry uses credit scores to divide potential customers into "prime" and "subprime" markets, referring to the prime interest rate set by banks. Elite borrowers can obtain a line of credit on a Platinum card at an interest rate around 12%. A Gold card carries an average interest rate of 15%, while a standard credit card charges rates around 17%. Then there's the subprime market, which first emerged in the 1990s, dealing with consumers whose credit scores are 500 or less, little or no credit history, those emerging from bankruptcy and anyone with an inconsistent performance in managing credit. These people are often low income earners and/or poor money managers, but the credit card industry finds a way to profit from these most needy of borrowers. Unlike "secured" credit cards, cards offered to subprime borrowers require no security deposit. Credit limits start out very low -- initially in the $100 to $500 range. However, fees can be hundreds of dollars and interest rates can easily soar to usurous rates of 30% or more. The industry also offers "secured" credit cards to offer high-risk customers. Borrowers are required to pay an up-front security deposit from $99 to $5,000 to serve as collateral in case of default. Many social and business commentators have denounced the subprime lending business for exploiting the poor, comparing the industry's problems to depression-era banking scandals. Lenders take on poor and desparate customers at their own risk, writing off losses in the 15% to 17% range, versus the average industry loss rate of 6.5%, according to CardWeb. The delinquency rate among subprime card issuers is 10%, twice as high as the industry average. Some credit card companies, such as NextCard, have been unable to recoup their losses and have closed up shop. According to many pundits, the American economy has been thriving in the past 5 years, with a steady growth in the GDP. However, 90% of this growth has been due to the housing bubble; real wages have declined by 4% since 2000 while health costs have risen by 40%. Middle and lower class Americans are becoming increasingly financially squeezed and unable to pay their debts. A record number of 1.3 million cardholders filed for bankruptcy in 2004. In response, the credit industry lobbied successfully for stricter bankruptcy laws. However, according to the Consumer Federation of America, the increasing incidence of loan defaults did not spur the card companies to become more discriminating in their choice of customers. In fact, they actually boosted their promotional campaigns to a record 5 billion solicitations ( approximately 50 per American household) compared to 3.5 billion the previous year, many of these ads targeting the sub-prime market. Now consider the debit card: it is decorated with the Visa or Mastercard emblem, and has all the functions of a credit card in that can be used at a cash register and for internet and telephone purchases. However, it takes money directly out of the cardholder's bank account and allows no more spending once the account is empty. A debit card has no monthly fees and no interest charges, and no chance of getting into debt. Perhaps this is the best consumer solution to a credit-mad economy.

Balance transfer credit card rules

A balance transfer credit card aids in consolidating credit card debt and sometimes can also be a way of steering clear of the burden of debt. You will find as you are searching through all those credit card company offers you receive all the time that they are now offering balance transfers in a variety of ways. You will also notice they all these credit card companies are all competing for your business so the incentives are becoming more and more appealing all the time especially when it comes to credit card balance transfer offers. The dream of most Americans is to have an interest free credit card all the time, not only during an introductory special. There are a few rules that you can use to ensure that you get the most out of a balance transfer. Pay close attention to any balance transfer offers that you may find. They change all the time and you do not want to apply after they are no longer offering this special deal on Balance Transfers. Watch that your credit card balance transfers are completed on time without any overlapping time from one credit card to another. You will find yourself paying a lot more in interest charges. When you are responding to banks and credit card companies by mail, remember to take in consideration the delay that normally happens with mail. The company must have time to receive your correspondence and then reply to you. Are you going to have a balance transfer to a store card or a major credit card? You should pay attention to the APR on the credit card that you plan to place your balance transfer. Many store cards have a higher APR than major credit cards; choose a credit card for your balance transfer that has a low APR. The way in which you handle your credit card balance transfer can be practical and expedient, and can be a great way in which to evade extra credit card debt. Always read the fine print. If you are applying for a 0 APR credit card then that is what you should be receiving, make sure the 0% includes your balance transfer and the length of time you have before the APR changes. Do not apply with any company that you do not trust. You should be able to understand their terms and conditions, their rules regarding balance transfers, etc… If you have never heard of the company do your own investigating, never feel pressured to applying because you are afraid of missing a good thing, you may be in fact saving yourself some heartache and financial drawbacks. Find out as much as you can about the company that you are applying with, are they quick with balance transfers and do they respond quickly with answers to your questions and information regarding your account.

What is the fair credit reporting act and what you should know

: The Fair Credit Reporting Act (FCRA) and the recent update to this law called the Fair and Accurate Credit Transactions Act (FACTA) protect consumers against inaccurate information being reported by credit bureaus and the privacy of that information. What does this mean to you? When you make purchases on a credit card, make payments to your accounts, open new bank or credit accounts, borrow money, buy a house or a car, and even fund your education, your financial information is reported by creditors and lenders to a credit bureau. The three major credit agencies that serve as clearinghouses for this information are Equifax, Experian, and TransUnion. Each lender and credit company may report your information to a different agency, depending on the location of the business and the service agreement between the companies, so each credit agency might print very different information on your credit report. According to the FCRA, you have the right to know what is on your credit report if you ask for it. You can contact each of the credit bureaus separately and pay for a report at any time. However, if a company refuses you credit, employment, or insurance, you may request a free copy of your report within 60 days. Simply ask the company that denied you credit for the name and contact information of the credit bureau they use. In addition, all three agencies must provide a free copy of your report in cases where you have been the victim of fraud or identity theft. Due to the recent changes by the FACTA, you will be entitled to one free copy of your report from each agency per calendar year, effective in all states by the end of 2005. (You can order it at annualcreditreport < annualcreditreport/> ) For example, if you order a report from Equifax in June of 2005, you may request a free report in June 2006. The credit bureaus must also supply you with a list of everyone who has requested your report in the last year. The FCRA requires that all credit bureaus and all information providers, such as lenders, credit card companies, or landlords, correct any inaccuracies that they are aware of in your report. If you find inaccurate or incomplete information in your credit report, notify all three agencies by phone and follow up in writing by using certified mail, return receipt requested, so you will have documentation of all requests and responses by the bureaus. Also send a request for the correction in writing to the information provider.

If the provider finds that the inaccuracy is substantiated, they must notify all national credit bureaus of the correction. If the dispute results in a change, the credit bureau is required to provide you with written results and a free copy of your adjusted report. Privacy is a serious issue when it comes to your personal information, and the FCRA includes provisions to guard the privacy of your credit report. Your employer or a potential employer may only gain access to your credit history with your consent.

An employer, insurer, or creditor cannot access a report that contains your medical information without your approval. Only people with a legitimate business need, such as an application for credit or a rental agreement, are allowed under the FCRA to obtain a copy of your credit report. The FACTA has enabled consumers to place a fraud alert on their credit report with one phone call to the credit agency.

In cases where you suspect that you are the victim of identity theft, or have simply lost your identifying information, you can stop potential thieves from accessing your credit. You can also get records from businesses where a thief has used your personal information without your consent, provided you have a copy of the police report detailing your identity theft. These records are invaluable in the process of clearing your name after such a crime. Also new with FACTA is the requirement that mortgage lenders and credit bureaus provide consumers with their credit scores upon request.

In addition, if an information provider is sending negative information to a national credit bureau for inclusion on your credit report, they must now send you written notification prior to doing so. These laws, the FCRA and its newer counterpart the FACTA, have made significant strides toward protecting the consumer from potentially damaging errors and breaches of privacy. More information can be found at apscreen

Credit protection insurance just another consumer rip off

Credit protection insurance is a good example of a consumer rip-off that affects millions of people, yet receives little attention in the financial media. Simply stated, you should NEVER buy "credit protection insurance," or a "payment protection plan" or any other similar type of credit-related insurance. Let's take a look at how these programs work and why they are a bad deal for the average consumer. First, let's dispense with the scam version of this insurance. With identity theft in the news so much lately, con artists have set up telemarketing boiler rooms to call people and try to scare them into buying worthless credit insurance products. Representatives will try to convince you that you're at risk if someone gets hold of your card and starts making fraudulent purchases in your name. When they call, they may even pretend to be from the "security department" of your bank. In fact, they may actually be part of an identify theft ring, with the goal of getting you to disclose personal information over the phone. Or they may simply be trying to make a fast buck by selling you an insurance policy that you absolutely don't need. Under Federal law, you are limited to a maximum of $50 liability for unauthorized use of your credit card. If you didn't authorize a charge, don't pay it! Follow your credit card bank's procedure for disputing bogus charges. You simply don't need insurance to protect yourself from a situation that is already covered by Federal law! Now, what about those "payment protection plans" offered directly by the big credit card banks? These are plans that promise to cover your minimum monthly payments for an extended period of time (usually 12-24 months) if you get laid off from your job, become hospitalized due to an accident or illness, or become disabled. On the surface, a plan like this sounds like a pretty good idea. After all, how could you keep up with your payments if you suddenly lost your job or became too ill to work? Of course, you should not be carrying balances on your credit cards anyway. If everyone paid their balances in full every month, then credit protection insurance would not even exist in its current form. You are charged for the insurance based on the amount of debt you're carrying on the card, so if the balance is zero, then there is no fee. In fact, some bank representatives use this as part of the sales pitch when trying to entice people to sign up for that "free 3-month trial" on their payment protection plan! They attempt to talk you into adding the insurance now, while you don't need it and when there is no cost, in the hope that one day you will start carrying a balance. By then, you'll probably have forgotten you signed up, and you'll wonder what those mysterious charges are on your statement every month. If you do carry balances on your cards, credit protection insurance is still a very bad deal. To see why, let's look at the math here. A typical loss protection plan costs 85 cents for every $100 of balance carried on the card. So if you're carrying a debt of $5,000 on the credit card, it will cost you $42.50 per month to buy the insurance. Over the course of 12 months, you will spend $510 under this scenario. That's equivalent to paying an extra 10% in annual interest! A light bulb should be shining over your head right about now. Why not take that same $42.50 per month and use it to pay down the balance faster? Good question. When you consider that most consumers who have credit protection carry it year after year, without ever becoming eligible for a claim against the insurance policy, the amount of wasted money can add up to a truly staggering sum. Continuing with our $5,000 example, with a typical minimum payment of $125/month, it will take more than 26 years to pay off the balance in full, at a cost of $7,115.42 in interest. By applying that extra $42.50 per month that would otherwise go toward the insurance, for a total monthly payment of $167.50, you'll have the debt paid off in only 40 months! And you'll have saved $5,435.22 in interest charges. It simply makes no sense to waste this money , especially when you consider that the credit protection plan is normally only good for 12-24 months anyway. There's another important factor involved here. Credit protection is also a bad deal because the eligibility requirements are so very restrictive. When you read the fine print, you'll realize that there are all kinds of situations that aren't covered. Let's say, for example, that you've been fighting a medical condition for some time. So you buy the insurance thinking it's a good idea. Eventually, you end up in the hospital for treatment and recovery. Can you breathe a little easier knowing your credit card payments are covered? Nope. Most of these policies have exclusions for pre-existing conditions. And there are numerous other loopholes that allow the bank to deny your claim under the policy. In view of the lousy math and the restrictive nature of this type of insurance, these programs should really be named "bank profit protection" instead of "credit protection insurance." Instead of spending good money on an insurance plan that you will probably never use, you're far better off applying that same amount toward paying off the debt early.

Details of the speedway reward card application

The Speedway Reward Card is for those applicants who have very good credit and make purchases frequently at Speedway SuperAmerica stores. With this program, a 1% rebate is earned on all general purchases, and a 4% rebate is earned for purchases that are made at Speedway SuperAmerica stores. During the first sixty days purchases at Speedway SuperAmerica stores will earn an 8% rebate. All rebates are applied directly to the cardholder’s account and can be used to purchase free gasoline. There is no annual limit to the amount of rebates that can be earned, but any unused rebates expire after a year. The Speedway Reward Card has an introductory rate of 0% that applies to both purchases and balance transfers for up six months with no annual fee based on the applicant’s credit history. After the introductory period, purchases are charged at a rate of 17.99% variable and cash advances 23.99% variable based on the Prime Rate. The card carries a 3% balance transfer fee with a minimum of $5 up to a maximum of $75 and a cash advance fee of 3% with a minimum of $10. The balance transfer fee may be reduced or waived at Chase’s discretion. Finance charges are calculated on a two-cycle average daily balance formula. The Speedway Reward Card provides the most benefits for those who qualify for the lowest rate, plans to pay in full after the introductory rate expires, and will use the card frequently to make purchases at Speedway SuperAmerica stores. The benefits a cardholder can derive from this card include the following: • Online access to account information • Reporting of lost and stolen cards • Emergency cash and card replacement • Emergency assistance and travel related services • Financial statement at year’s end upon request • Extended warranty for purchases made with the card • Purchase protection • Roadside assistance • Travel accident insurance up to $500,000 • Insurance for rental car • Lost luggage insurance up to $3,000 • No liability to the cardholder for unauthorized transactions

Best strategies for online approval of credit card application

Credit cards had been a popular form of purchasing items on a "chargeable" or borrowed term. The advantages of having a credit card are: 1. Security, since one does not have to carry a large amount of cash to purchase certain items. 2. Convenience. In case one has to purchase an item that is immediately needed (and is out of cash), these can be purchased using a credit card 3. Cash advances. Purchases that require cash payments may still be accommodated by the credit card through the cash advance feature. This works like a regular ATM transaction (with of course a corresponding interest rate) Disadvantages 1. Interest rate. Unlike purchasing with cash, credit card charges come with a corresponding interest (unless paid before the due date). The consumer should be aware of the various interest rates offered by the different credit card companies. One has to choose the mode of payment (plus the interest rate) that would best suit his or her capacity to pay. 2. Overuse. A consumer tends to purchase items that are not really needed or included in their budget if they have a credit card that is ready to use. 3. Annual fees. Whether one chooses to use his or her card, after activation, annual fees will be charged. 4. Other charges. A delay in the payment during one billing period would incur you additional charges. Credit card online approval usually is far easier than manual applications that require various forms to be completed before it can be processed. The company likewise is more likely to receive your application on a shorter period of time as compared to snail-mailing your forms. For a faster credit card online approval, take into consideration the following: 1. Do not leave any unanswered line, especially those marked with a red asterisk. 2. After completion of the online application, immediately send either through email or facsimile the additional requirements needed. 3. Take into consideration that credit card companies prioritize applications of the following group of people: - married couples - persons with a mortgaged house or car - persons with several dependents 4. Choose credit card companies that have a promotional offer in the application process, chances are, promos are offered due to low application rate, thus prioritization your entry is a sure shot. The logic here is that the more obligations an applicant has, the more they are likely to use the credit card, which equivalents to higher earnings (through interest charges) on their part.

Getting credit when you re over 62

If you’re an older consumer who has paid with cash all your life, you may find it difficult to open a credit account. That’s because you have “no credit history” of how you paid on credit. If your income has decreased, you may find it harder to get a loan because you have “insufficient income.” Or, if your spouse dies, you may find creditors trying to close joint accounts. A “joint account” is one for which both spouses applied and signed the credit agreement. Under the federal Equal Credit Opportunity Act (ECOA), it’s against the law for a creditor to deny you credit or terminate existing credit simply because of your age. This brochure explains your rights and offers tips for applying for and maintaining credit. Applying for Credit Applying for credit used to mean asking your neighborhood banker for a loan. Now, with national credit cards and computerized applications, the day of personal evaluations may be over. Instead, computer evaluations look at, among other things, your income, payment history, credit card accounts, and any outstanding balances. Paying in cash and in full may be sound financial advice, but they won’t give you a payment history that helps you get credit. A major indicator of your ability to repay a loan is your current income. Those who consider income must include types of income that are likely to be received by older consumers. This includes salaries from part-time employment, Social Security, pensions, and other retirement benefits. You also may want to tell creditors about assets or other sources of income, such as your home, additional real estate, savings and checking accounts, money market funds, certificates of deposit, and stocks and bonds. If you’re age 62 or over, you have certain other protections. You can’t be denied credit because credit-related insurance is not available based on your age. Credit insurance pays off the creditor if you should die or become disabled. On the other hand, a creditor can consider your age to: - favor applicants who are age 62 or older. - determine other elements of creditworthiness. For example, a creditor could consider whether you’re close to retirement age and a lower income. While a creditor cannot take your age directly into account, a creditor may consider age as it relates to certain elements of creditworthiness. If, for example, at the age of 70, you apply for a 30-year mortgage, a lender might be concerned that you may not live to repay the loan. However, if you apply for a shorter loan term, increase your down payment, or do both, you might satisfy the creditor’s concerns. Checking Your Credit History A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. You may find that your file doesn’t list all of your credit accounts. That’s because not all creditors report to consumer reporting companies. You may ask that additional accounts be reported to your file. Some bureaus may charge for this service. Credit information about shared accounts should be reported in your name and your spouse’s. If it’s not, ask the creditor in writing to report the account in both names. The Fair Credit Reporting Act (FCRA) requires each of the major nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months. To order your free annual report from one or all the national consumer reporting companies, visit: annualcreditreport; call toll-free: 1-877-322-8228; or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281. Do not contact the three nationwide consumer reporting companies individually; they provide free annual credit reports only through annualcreditreport, 1-877-322-8228, and Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281.

Bad credit car finance how to get pre approved for an auto loan with poor credit

Getting pre-approved for bad credit car financing will help you get the best rates possible. Pre-approved auto loans also give you an edge during car shopping, providing you with the most options. Your car shopping experience can be focused on getting the best price on a car, rather than worrying about financing. Why Pre-Approved Loans Are Better Some dealerships would have you think that getting financing with bad credit is nearly impossible. Not so. By researching lenders and their financing packages, you can find near market rates. By getting pre-approved, you also remove a barrier when negotiating the price of your car. With a blank check in your hand, you can buy from any dealership or person. Sellers are much more willing to go down in price in order to seal the deal. Start By Finding A Good Sub Prime Lender Most financing companies deal with prime and sub prime car loans. So start your financing search by asking for loan quotes from several different lenders. If you have no idea who to look at, start with recommended sites. When you ask for quotes, consider all possible terms. For example, selecting an adjustable rate loan will give you a lower initial payment than a fixed rate loan. Buying from a dealership will also get you better rates. Look at fees and closing costs, not just fees, when comparing car loans. The APR number will give you the overall cost of the loan, a helpful number to use. If you are planning to refinance, lean toward a low application fee loan with slightly higher rates. This can save you money in the long run. Online Application Speeds Car Loan Process Car financing companies have developed online loan applications to save time and money. By having you enter your basic personal and financial information, lenders can limit the number of personnel needed to process your loan. As a result, you can receive a blank check for you car purchase in five to seven days. You will also receive your loan contract at the same time. When you are ready to purchase your car, you simply sign both the check and loan contract.

Credit insurance is it right for you

Credit insurance protects the loan on the chance that you can't make your payments. Credit insurance usually is optional, which means you don't have to purchase it from the lender. In fact, the Federal Trade Commission (FTC), the nation's consumer protection agency, says it's against the law for a lender to deceptively include credit insurance (or other optional products) in your loan without your knowledge or permission. There are four main varieties of credit insurance: Credit life insurance pays off all or some of your loan if you die. Credit disability insurance, also known as accident and health insurance, makes payments on the loan if you become ill or injured and can't work. Involuntary unemployment insurance, also known as involuntary loss of income, makes your loan payments if you lose your job due to no fault of your own, such as a layoff. Credit property insurance protects personal property used to secure the loan if destroyed by events like theft, accident or natural disasters. Shopping Tips Before deciding to buy credit insurance from a lender, think about your needs, your options, and the rates you're going to pay. You may decide you don't need credit insurance. If you do, credit insurance can be an expensive form of insurance. For example, it may be less expensive and more practical for you to get life insurance than credit insurance. Before deciding to buy credit insurance, you should ask: How much is the premium? Will the premium be financed as part of the loan? If so, it will increase your loan amount and you'll pay additional interest, and more for points (if points are on your loan). Can you pay monthly instead of financing the entire premium as part of your loan? How much lower would your monthly loan payment be without the credit insurance? Will the insurance cover the full length of your loan and the full loan amount? What are the limits and exclusions on payment of benefits - that is, spell out exactly what's covered and what's not. Is there a waiting period before the coverage becomes effective? If you have a co-borrower, what coverage does he or she have and at what cost? Can you cancel the insurance? If so, what kind of refund is available? Before you sign any loan papers, ask the lender whether the loan includes any charges for voluntary credit insurance. If you don't want credit insurance, tell the lender. If the lender still pressures you to buy insurance, find another lender. And review your loan papers carefully to be sure they have been drawn up correctly. Lenders can't deny you credit if you don't buy optional credit insurance - and if you don't buy it directly from them. If a lender tells you that you'll only get the loan if you buy the optional credit insurance, report the lender to your state attorney general, your state insurance commissioner or the FTC. Consumers should ask these same questions about other extra products offered with their loan, such as auto or shopping clubs, home or auto security plans, and debt cancellation products.