Summer is synonymous with a lot of things, but two of them are sports and camping. Most children’s sports take place during the spring, summer, and fall months. Most family sporting events and sports-related vacations also occur during these seasons. Now is a great time to buy sporting goods, but only if you know how to get deals. Use these seven tips for buying sporting goods and camping gear to save a bundle.

Buy Used Sports Equipment
This is especially important for children who are adopting a new sport. Your little baseball star may decide he likes soccer next year, so don’t invest in expensive bats, balls, and gloves. Instead, visit a used sporting goods store like Play It Again Sports. Of course, there is a caveat: helmets and shoes. Always buy the shoes new, to prevent injury from worn out soles. Helmets for some sports can be bought used, but take a close look at it to make sure it didn’t take any hard hits. For you golfers – this is a great way to upgrade your clubs without spending a fortune.

Buy Surplus Camping Gear
If you’re heading out to the woods for some quality time with nature, then you’ll need a tent, sleeping bag, and camp stove. Before you head to Target or a sporting goods store, check your local Army surplus store for deals. Most of the stuff is brand new and just as good as the name brands you’ll find at other stores.

Buy Late in the Season
If you want to upgrade your camping gear or sports equipment, wait until the end of the summer. That’s when you can nab close-out deals on major name brands at major sporting goods stores. You’ll also find close-outs at stores like Target a little earlier in the summer.

Visit Costco and Other Big Box Stores
Costco, Target, and Wal-Mart often carry high-quality gear at lower prices than the sporting goods stores. Several years ago I bought a name-brand tent from Costco for 50% less than the Sport Chalet price. Right now, you can buy a hydration pack for $19.98, as I mentioned in my article on the Costco haul.

Scan Craigslist and Garage Sale Ads
I wouldn’t recommend eBay because I prefer to inspect sports equipment and camping gear in person, but you can find great deals at garage sales, moving sales, and on Craigslist. This is spring cleaning time, which means lots of gear is being dragged out of closets and sold. Check again at the end of the summer for more deals.

Check Amazon
Amazon sells everything, including athletic equipment and camping gear. When shopping at Amazon, I would buy new rather than used, and look for the deals offering free shipping. This stuff is heavy. I spotted several tents that were 40% off the list price, and I wouldn’t have to pay shipping or tax, which brings the savings close to 50% versus buying it from a local store.

Don’t Buy It – Borrow It
If your kid is trying a new sport this year, or you only camp once a year, hit up friends and relatives for borrowed equipment. As long as you return the gear in excellent condition and return the favor when they ask to borrow something of yours, it’s a great way to reduce costs for everyone.

Sports equipment and camping gear can quickly get expensive, but if you shop wisely and borrow well, you can save a bundle on used equipment that is just as good as the new stuff.

SupercapitalismSupercapitalism: The Transformation of Business, Democracy, and Everyday Life is a new book by Robert Reich, former Labor Secretary under Clinton. If you listen to NPR’s Morning Edition or American Public Media’s Marketplace, you’ve probably heard one of his commentaries.

The book delves into the development of US economy during the last century, mostly since the 1950s. His central argument is that the power and influence of capitalism has risen while the power of democracy has declined. We’ve now reached a point where most laws and regulations are passed due to corporate lobbying. Our power as citizens now lies mostly in our ability to make decisions as consumers. He also argues that our never-ending search for a better deal or a lower price forces producers to cut costs, which usually means cutting wages. We’ve created an endless circuit where our search for deals results in the decline of our own wages.

He offers two solutions to the problem:

Become aware of your choices as a consumer and consider paying more to support a company that supports your values. For example, saying you want corporations to help the planet, and then buying an SUV rather than a hybrid undermines your statement of your values and encourages corporations to continue supporting the SUV lifestyle.

Realize that corporations are not people, and therefore should not have the same rights or responsibilities as people. They should also not be expected to act in ways that are “socially responsible.” Corporations are solely charged with producing profits for shareholders. They will only act in the public good when it benefits the bottom line. Pretending anything else is foolhardy. He argues that corporations should not pay tax, but they also shouldn’t have the right to sue to block legislation or be able to donate money to political parties or candidates.

With these concepts in mind, we turn to the articles in the Festival of Frugality. True, we’re all still interested in the deal, but most frugal people understand that being frugal sometimes means spending more to get a better value for a better product or to achieve the kind of world you want to live in.

Editor’s Picks

Money Blue Book manages to find the upside to higher gas prices – less traffic and more use of public transportation.

Mrs. Nespy’s World runs down the job benefits that can be a deciding factor for prospective employees. It pays to treat employees well.

Cheap Healthy Good explains why diet foods are actually not good for your weight or health and suggests ways to eat more healthfully instead.

Frugal Homemaker Plus discusses the importance of teaching children about frugal values early.

Just Shoot Me Now shows you how to outwit the stores by always checking the unit price. Bigger isn’t always cheaper.

Credit Addict explains how to combine the stimulus checks, grocery gift cards, and rebate credit cards to save loads on groceries.

Saving Money

The Digerati Life shares 25 tips for saving money with grocery coupons.

Save and Conquer explains how home health remedies can save you lots of money.

FIRE Finance shares the top five freebie websites.

Funny about Money shares his cost-effective home renovation strategies.

I Create for Less shares her tips for saving money on framing art.

Home Life Weekly explains how to make dishwasher detergent.

Monroe on a Budget shares how she learned to love iced tea, the money-saving alternative to soda.

On Financial Success shares his astounding $92 savings on a $122 grocery bill.

Gagazine offers helpful tips for saving money on baby items.

I Want Better Gas Mileage argues that premium gasoline isn’t always worth the cost.

Free Money Finance shares more ways to save money on wedding costs.

Be Thrifty Like Us explains how to make a $19 swingset.

Finally Frugal switched from rice to Top Ramen to save money.

My Daily Dollars explains how to make homemade crackers.

Buxr explains what refurbished really means, and how to buy refurbished items.

The Financial Engineer discovered a way to stop roots from clogging his pipes – thus avoiding a costly plumber.

Lazy Man and Money explains how members of the military can take nearly free vacations.

Wealth Junkies shares her strategies for saving money with coupons.

Stop the Ride offers a simple tip for making your own plastic scrubber.

Living the Cheap Life provides a tip for earning money without doing anything.

Smart Easy Money shares her love of thrift-store shopping.

Hustler Money Blog offers 10 quick ways to save money.

Finance Gets Personal argues that you can save money by planning ahead and shopping less.

Blueprint for Financial Prosperity lists sales tax holidays for various states. Plan to shop then so you can save money on sales tax.

Money Ning discusses occasions when saving money shouldn’t be your goal.

Dough Roller offers 25 ways to save money on gas.

Frugality

The Wealth Accumulator compares consumerism and thrift, and shares tips for becoming more thrifty.

My Family’s Money presents five deceptively simple ways to change your saving habits.

Saving Advice wonders why more faith communities don’t promote simple living.

FinancialZip suggests four ways to make more intelligent spending choices.

Tight Fisted Miser explains that tracking every penny is his way of budgeting and controlling spending.

Moolanomy shares his top 5 budget busters.

Frugal Fabulous proves that it is possible to entertain friends on a budget.

Five Cent Nickel continues the ongoing debate about frugal vs. cheap.

My Small Cents demonstrates that being organized can save money.

Cash Money Life tells you how to extend the life of your computer.

You Might As Well Burn $5 suggests ways to create your own financial windfall.

Freezing in NH discovered the joys of making and freezing her own toaster waffles.

Green Living

Gardeners Tips brings us money saving advice from the garden. Growing your own food is a surefire way to ease the impact on your wallet while also helping create a more sustainable world.

Oh My Aching Debts shares tips for saving money with alternative forms of energy.

The Q Family Adventure shares her tips for saving cash and the planet.

Not the Plan offers more tips for saving money while going green.

Green Pastures wonders how long you could go without buying something new and offers strategies for buying less and reusing more.

Paid Twice also makes the argument for reusing perfectly good items.

Paying Off My Future found new uses for junk mail envelopes.

Money Crashers offers ten inexpensive ways to live a greener life.

Frugal Babe shares her success with homemade diapers.

Hunting Happiness explores the new all-electric Chevy Volt and whether it can save money.

Planning

Phil for Humanity argues that not planning ahead is stupid, and explains why. Robert Reich would agree.

The Personal Financier teaches us how to enjoy budgeting and saving.

Chief Family Officer explains how to choose a college by comparing the costs.

Uncommon Cents offers another take on managing college costs.

Christian Personal Finances teaches us the simplest way to make a budget.

Financial Learn walks you through the process of setting up a budget.

Miscellaneous

KC Lau reviews a book on insurance for Malaysians, but he also includes a few tips that are helpful for everyone.

WenchyPoo argues that shortages and inflation are stealth tax increases. Robert Reich would agree.

Forex Trading Strategies shares strategies for knowing when it’s time to get out of a stock.

My Dollar Plan shares her found money success - an unclaimed bank account.

Saving to Invest presents the hard numbers about the rise in food costs.

Squawkfox offers several strategies for improving your education for less.

I hope you enjoyed this week’s Festival of Frugality. Be sure to submit to next week’s festival, hosted by Frugal for Life.

Just like the living debt, sometimes old debts can come back to haunt you. This is called zombie debt. The good news is that you can fight this illegal debt collection without having to pay them a penny. I tell you how in the last of my five-part series on credit.

What is Zombie Debt?
Zombie debt is charged-off or expired debt that collection agencies have purchased for as little as one cent on the dollar. Sometimes they purchase them from creditors, other times they purchase them from other collection agencies. Even though you’re not legally required to pay the debt, they will review the credit scores and histories of potential victims. They then target those who have the most to lose.

Typically, you’ll receive an excessive bill for a debt with one of three characteristics:

  • The statute of limitations has expired
  • It was a result of identity fraud
  • It was discharged via bankruptcy or some other settlement

The collection agency will send you a letter demanding payment and threatening to sue you or add the collection to your credit report if you don’t pay up. Any attempts to deal with them will only encourage them to push harder. They’re banking on your fear of having your credit ruined, and your lack of awareness of your rights.

How to Fight Zombie Debt
First, don’t try to deal with the collection agency directly. Do not speak to them on the phone; do not offer them money to go away. If you pay them, they might decide you can pay more. If you speak to them, you may inadvertently agree that you do owe the debt.

Instead of dealing with them, take the following actions:

Verify the debt. Don’t speak to the collection agency, but do check your own records for some history of the debt. If it was charged off, you should have a record of that. If it’s an old debt, verify the statute of limitations in your state and the state where you created the debt. If both statutes of limitations have expired, you can’t be required to pay anything. The statute of limitations for most debts is six years, but it can be up to fifteen years in some states.

Write to the collection agency. Send them a certified letter demanding that they cease contact with you. Federal law requires that they comply. State that you do not acknowledge the debt in the letter.
Monitor your credit report. Often, they will illegally re-age the debt to make it appear current and restart the seven year clock. If the debt appears, dispute it with the credit bureau. If the collection agency persists, demand that they produce documentation of the original debt. In most cases, they don’t have documentation. Continuing to report a debt they can’t document is a violation of the Fair Debt Collection Practices Act. If they do have documentation, then it will most likely prove that you no longer owe the debt.

Hire an Attorney. If the statute of limitations isn’t expired, hire an attorney to negotiate a settlement with them. Contact the National Association of Consumer Advocates for a referral. If the debt isn’t valid, they can’t document it, and they continue to harass you, hire an attorney to fight for you.

Fortunately, the FTC is actively pursuing illegal collections, and has shut down some collection agencies engaged in aggressive practices, including pursuing zombie debt. If you’re the victim of an illegal debt collection, follow the above steps and then report them to the FTC.

Welcome to my weekly blog carnival round-up. Next week I’ll be hosting the Festival of Frugality, so get your submissions in!

This week we’ll kick off with that very festival – the Festival of Frugality #122 at On Financial Success. He takes a sort of Mad Libs approach, except in this one the sentences make sense. He included my post discussing whether pets are frugal. In the same section about different financial choices, Financial Zip examines how frugal choices impact your health.

Next up, the Money Hackers Carnival #9 at Quest for Four Pillars. I had to look away a lot because he features horror movies, but I did see that he featured my post on reducing prescription drug costs (which can be truly scary.) You might also enjoy another savings tip that offers a scary realization: what’s your furnace pilot light costing you?

Finally, the grandmama of the finance blog carnivals, the Carnival of Personal Finance #149 at the Happy Rock. You’ll find my six ideas for an affordable vacation, along with a stern warning about the expensive mistake of missing a flight.

As I mentioned in the post about credit monitoring, you can get a free credit report every year at AnnualCreditReport.com. The best approach is to access one of the three free reports every four months. That will give you a year-round view of your credit for free. However, there are other occasions where you can get a credit report for free, even if you’ve already received your free annual report through the government site.

You Live in a State that Requires Free Copies of Credit Reports
If you live in Colorado, Maine, Maryland, Massachusetts, New Jersey or Vermont, you’re entitled to another free report. You can’t access it through the federal website, but you can request it by mail by writing to each of the three bureaus or by visiting the websites for Equifax, TransUnion, and Experian. If you live in Georgia, you’re entitled to two reports a year.

You’re Denied Credit, Insurance, or Employment
When you apply for new credit, the creditor will review your credit report. If you’re turned down because of information on your credit report, you’re entitled to a free copy of the report that contained it. The creditor must explain the reason credit was denied. You then have sixty days to request your report in writing if you include the reason credit was denied in your request.

Some insurers use your credit report when determining whether to extend insurance to you. The theory is that people with poor credit are more likely to make insurance claims. If you’re turned down for insurance due to your credit history, you can request a copy of the report they reviewed within sixty days of being notified.

Employers can also use credit reports when making hiring decisions. If you’re denied employment due to your credit report, you can also request a free copy of it.

You Receive Public Assistance
If you receive welfare benefits or other public assistance, you can request free copies of your reports.

You’re Unemployed and Looking for Work
If you’re unemployed and plan to begin looking for work within the next sixty days, you can request free copies of your reports.

You’re a Victim of Fraud
If you know you’re a victim of identity fraud, or suspect fraudulent activity, you can request a free copy of your report when you place a fraud alert on your file.

Obviously, none of these are ideal ways to get a free copy of your credit report, but it’s good to know that you’re entitled to it if one of them occurs. You can also try to game the system by using the free credit report offers at various bureaus and private firms, but most of these deals require you to provide a credit card number and will start charging you a monthly fee if you forget to cancel the service within the first thirty days. I’d much rather play it safe and use the government site.

FICO credit scores determine whether you’ll qualify for a loan or credit card, and if so, what your interest rate will be. A low score can cost you thousands of dollars over the life of a mortgage To help you learn more about this vital piece of information, I cover what goes into your scores and what you can do to fix them.

How Credit Scores Are Determined
As I mentioned on Monday, there are now two breeds of credit scores: the VantageScore and the more familiar FICO score. The FICO score is used by most lenders and creditors. Although the exact formula is proprietary, FICO says that it currently ranks the following elements of your credit history:

  • 35% payment history
  • 30% outstanding balances
  • 10% types of credit you hold (loans, credit cards, etc.)
  • 15% credit history length
  • 10% recent history

The resulting number is a three digit score between 300 and 850. The average credit score in the U.S. is 723, which is considered good.

The Credit Score Scale
If you’re even moderately aware of the mortgage industry, then you know that scores are grouped into three tiers by mortgage lenders:

  • Prime
  • Alt-A
  • Subprime

Subprime borrowers were previously considered to have scores below 620. Alt-A borrowers had scores between 620 and 720, but also often had high debt-to-income or low loan-to-value ratios, were self-employed, or had other factors that made them higher risk. Prime borrowers had scores above 720, solid employment, low debt, and a good down payment, all of which made them lower-risk.

Rather than tiers, FICO divides the scores into the following range. As you can see, the range helps determine your interest rate. The difference between the first two tiers is $42 a month on a $300,000 loan. It’s $97 a month between the first and third tiers.

FICO credit score scale

Each of the three bureaus generates its own FICO scores. Lenders generally pull all three and then use the middle score. If you have a co-borrower, they will use the middle score of the lower-scoring borrower. For example, if one of you had 720, 730, and 740 and the other had 660, 670, and 680, your rate would be determined based on a score of 670.

How to Get Your Credit Score
Unfortunately, your credit score is not available for free at AnnualCreditReport.com. You can either buy them from the credit bureaus, or buy them with your reports at MyFico.com. If you’re currently applying for a loan, you can ask the lender to show them to you. If you have a Washington Mutual Credit Card, you can view one of your scores for free anytime.

As far as I’m concerned, credit reports and scores should be available to consumers for free at any time. The credit bureaus make most of their money selling the information to banks. Their information is our personal information, which is used to make decisions about our financial lives. We shouldn’t have to pay to see something based on our own data.

How to Fix Your Credit Score
If your credit score is low, you can take a few steps to boost it, but you may also inadvertently harm your score. You should never pay someone to repair your credit score. Anything they could do, you can do for free yourself.

Review Your Credit Report. The most important thing you can do is review your credit reports and correct errors to the bureaus. Incorrect negative information can have a major impact on your score, and fixing it is usually simple. Don’t dispute negative items that are accurate, though. Even if the bureaus temporarily remove them, they will return because the information is correct.

Don’t Close Old Credit Accounts. There’s a lot of conflicting information about how cancelling credit cards affects your score. The current advice is to leave them open. This is especially true of your oldest card. If you’ve had one card for fifteen years and the rest for five, cancelling the oldest card will shorten your credit history, which negatively impacts your score. There are exceptions, though.

Become the Co-Owner of a Card with Good History. A year ago, you could be an authorized user and have the benefit of the owner’s account history applied to your score. Due to fraud, FICO stopped doing that. You do still get a score boost if you’re the co-owner of the card (and therefore legally responsible for it.) My husband had an old card with a fee and a low limit. When we got married, we made him the co-owner of two of my oldest cards and then cancelled his younger, high-fee-low-limit cards. Remember, though, that you’re on the hook for any debts incurred on the card if you’re a co-owner, so this is really only a good idea for spouses.

Don’t Open Several Accounts Before Applying for a Loan. New credit accounts detract from your score. The general rule of thumb is to avoid acquiring new credit for one year before applying for a home or car loan.

Don’t Pay Off Really Old Debts. Collections and old debts fall off your report after seven to ten years. Even if they’re still on your report, they have less impact as they age. If you pay them off, you may inadvertently refresh them and lower your score more.

Even though your score affects your borrowing ability, there’s no reason to stress about it until it’s time to apply for a new loan, or if your credit card interest rate shoots up. Then you can take steps to improve it to lower your costs.

I now return to my series on credit history and credit scores. Monday, I covered the VantageScore. Today, I focus on credit monitoring. FICO, the three credit bureaus, banks, credit card companies, and many other independent services try to use scary warnings about identity theft to try to convince you monitoring is a necessity. So what exactly is credit monitoring and is it worth the cost?

What Is Credit Monitoring?
Monitoring services constantly check your records and send you daily reports concerning changes or alerts. Most services provide the following features:

  • Unlimited access to all three credit reports
  • Unlimited access to all three credit scores
  • Daily alerts regarding changes to credit reports, credit scores, public records, and your address
  • New account alerts
  • New inquiry alerts
  • Identity theft insurance (usually up to a maximum of $20,000)

Prices for the monitoring vary, but they usually run $12.95-$14.95 a month. Some offer discounts for prepaying a year in advance.

According to Consumer Reports, some services also check forums, chat rooms, and other websites where stolen credit information is sold. The article also states that credit monitoring won’t protect you if someone uses your social security number with a different name.

Who Needs Monitoring?
For most people, monitoring is a waste of money. You can get a copy of each your credit reports for free every year at AnnualCreditReport.com. If you mark your calendar to check one of the reports every four months, you can stay on top of your credit pretty easily. You won’t access to your credit scores, but that information isn’t necessary unless you’re preparing to take out a new loan or applying for new insurance.

A monitoring service may be a good idea if your identity has already been stolen and you’re in the process of documenting the extent of it and getting your credit cleaned up. If your information was stolen as part of a large data breach, the company holding your data may offer you free monitoring for a year. If so, accept it and use it for that year.

Should You Monitor Your Children’s Credit Reports?
You’ve probably heard recent ads touting monitoring services for children. The ads claim that your children’s identities could be destroyed if you don’t buy protection while they’re too young to apply for credit. It’s a nice theory, but in most cases, children’s identities are stolen by their parents, not by strangers. If you’re very concerned, request a free credit report annually. The credit bureaus won’t be able to provide a report in most cases because a social security number or savings account alone isn’t enough to create one.

In summary, credit monitoring is unnecessary for most people, including children. It’s only worthwhile if your identity has already been stolen and you’re in the process of stopping the breach and cleaning up your information.

The credit series will resume tomorrow, after this brief interruption for Earth Day.

A lot of people are looking for ways to save money these days. Although they don’t intend it, their newfound frugality may also be good for the environment. However, it also helps to be intentionally eco-conscious when making frugal choices. Here are ten tips to Reduce, Reuse, and Recycle. As a bonus, you’ll probably save money. If frugality doesn’t motivate you, discovering your carbon footprint might.

Carry Canvas Grocery Sacks
But won’t you have to buy a grocery sack first? You might not! If you dig deep into your closets, chances are you’ll find a treasure trove of canvas bags from conferences, events, gifts, and donations. I have several in various sizes – small ones that are perfect for walking up to the store for one item and big ones that are great for my full weekend shop. Even if you do have to buy them, you can usually get them for $1 and they last a long time.

Make Reusable Produce Bags
Once you start using canvas grocery bags, you won’t want to fill them with plastic bags. You can make cheap reusable produce bags to load all your produce in. You could also buy them, but making produce bags would be more frugal if you have a sewing machine or a friend you can borrow one from. Here’s a third produce bag to give you another idea.

Reuse Ziptop Bags
This one grosses some people out, but it’s really not that bad. I reuse my plastic lunch baggies for four days, which means I go through a total of about seven a week (I bring my snacks to work, too.) You can either rinse them out, or just use the same bag for the same item each day. I also have a permanent lunch sack made from nylon.

Reuse Glass Jars
When I buy something in a glass jar, I inspect the lid. Even if I have to spend twenty cents more, I might do it if it means getting a glass jar with a screw-on lid that I can reuse later on. Do that a few times and soon you have your very own free jar collection. They’re great for storing leftover sauce or making crème fraiche.

Stop Junk Mail
Stopping junk mail not only reduces your urge to get another credit card or buy something for a catalog, it also reduces the amount of wasted paper. That’s good for everyone! Since signing up with Catalog Choice and the DMA no-junk list, I’ve reduced my pile of junk mail to ¼ its original size. Some days the mailbox is empty.

Reduce Energy Use
We reduce our energy use through careful control of the heater and air-conditioner, through the wise use of window blinds, and by installing CFLs in most of our lamps. There are a few that the bulbs won’t fit into, so we’re looking for replacement lamps that will fit them.

Eat Local, Grass-Fed Meat
I recently read The Omnivore’s Dilemma and no longer feel comfortable eating corn-fed beef and pork. Fortunately, a farmer sells grass-fed beef and pork at my nearby farmer’s market. It’s only marginally more expensive, but greatly reduces the impact on the earth. I know we could cut red meat entirely, but my diet is already so limited that I hate to cut more items!

Buy Produce at the Farmer’s Market
We’re also buying as much produce as we can at the farmer’s market. Most of it is grown without pesticides on local farms, which reduces the impact on the earth from food transport and pesticide production/waste. It does mean eating more seasonally, but the improved taste is definitely worth it.

Use Old Socks and T-Shirts for Rags
My mom still uses my old cloth diapers as dust rags. That’s over thirty years of reusing one item! They’re not hard to wash, and it’s cheaper than paper towels or wasteful disposable cleaning wipes. I love to use old socks to polish silver and brass because the soft cotton doesn’t scratch them.

Use Cloth Napkins and Dish Towels
We switched to cloth napkins and dishtowels a few years ago in order to reduce our use of paper towels and napkins. Not only has it saved us a bundle on paper products, but we create less trash.

As our awareness of the environment and our determination to save money have increased, we’ve started to reduce, reuse, and recycle as much as possible. We’ve definitely seen an impact on our energy and household expenses bills. Hopefully we’ll see a reduction in our food bills, too.

How do you reduce, reuse, or recycle? Tell me in the comments.

This is the first of five posts relating to credit scores and credit history. If you ordered a credit score along with your Experian credit report, you probably got a VantageScore and wondered “what the heck is this?” It’s a new credit score developed by the three credit bureaus (Experian, TransUnion, and Equifax) to compete with the FICO score.

How Does the VantageScore Work?
The VantageScore is derived similarly to the FICO score, but uses a few additional scoring metrics. The score range is wider and higher, and you receive a letter grade in addition to your number.

FICO scores range from 300 to 850, while VantageScores range from 510 to 990. Each 100-point range is also assigned a letter score from A to F. Scores of 900-990 are the equivalent of an “A.”

Although both formulas are proprietary, experts say the scores are based on several factors.

The FICO score is calculated with the following factors:

  • 35% payment history
  • 30% outstanding balances
  • 10% types of credit you hold (loans, credit cards, etc.)
  • 15% credit history length
  • 10% recent history

The VantageScore adds a few factors and changes the scoring model slightly:

  • 32% payment history
  • 23% amount of credit you’re currently using
  • 15% credit balances
  • 13% length and depth of credit history (kinds of credit and age of accounts)
  • 10% new credit accounts and inquiries
  • 7% total available credit

Who Uses VantageScores?
I couldn’t find much evidence to date that lenders are using the new scores. The score was introduced in 2006, so most lenders are still testing its use versus the FICO score. If you’re planning to apply for a mortgage, take out a car loan, or just want to know what the lenders are seeing, buy your FICO scores. You could ask your potential lenders if they use VantageScores, but I wouldn’t buy them unless they say they do.

Are the Scores the Same for All Bureaus?
Each credit bureau computes an individual VantageScore using the information they have in their files. Some of your accounts may not be reported to all the bureaus, so there could be some variation.

How Does the Score Compare to the FICO?
We discovered the VantageScore when my husband checked his credit report and requested his credit score along with it. We were confused when we saw this strange number and letter grade, so we ordered his FICO score and Experian report from MyFico.com. The FICO score was 20% higher than the VantageScore, a significant difference that could impact his interest rate. If we were applying for a mortgage today, we’d want that top score used!

What Does It Mean for You?
Currently, the score means nothing for you. However, it’s possible that lenders will opt for these scores in the future. They’re cheaper than FICO scores, so smaller institutions might opt for them sooner. On the other hand, bankers don’t like change; they might opt to stick with the score they know for several more years.

It appears that you can no longer buy your FICO score from Experian. The other two bureaus still sell them rather than VantageScores. That does make me wonder how good the scores really are if the other two bureaus don’t sell them to consumers. I suggested that my husband call Experian to demand a refund, but he pointed out that they asked if he wanted to buy his “credit score,” not his “FICO score.” Technically, they didn’t lie, but I think it’s very deceptive marketing. Most people don’t know about VantageScores, and everyone knows about FICO scores. If you see the words “credit score,” you assume “FICO score.”

If you’re very curious, go buy your VantageScore from Experian, but I would wait until there’s some evidence that the score is in use. Unfortunately, that means you can only get two of your three FICO scores for the lower fees charged by the credit bureaus. FICO will only sell them bundled with a credit report for $15.95 each. Want to see your FICO score for free? Get a Washington Mutual credit card.

This week I was thrilled to be featured in the MSN Smart Spending blog. She focused on my post about saving money during wedding season. Thanks for the link and welcome new readers!

And now onto the weekly blog carnival round-up. We’ll kick things off with the:

Carnival of Personal Finance #148 at Gather Little by Little. In addition to my post about saving money during wedding season, you might also enjoy Financial Gals’s tips for resisting the urge to splurge on your own wedding.

Next up, the Festival of Frugality #121 at Rather Be Shopping. In addition to my post about my $14 kitchen makeover, you might also enjoy Frugal Gal’s post on the wondrous nature of caulk.

And last, but definitely not least, the Money Hacks Carnival #8 at Be Thrifty Like Us. In addition to my post on using CVS Coupons and ExtraCare Bucks, you might also enjoy Moolanomy’s free money opportunities.

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