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As the kids are back in school and summer vacation is over, now is a good time to sit down and review how to pay for the big “C”. Yes, college. The cost of sending a student to a 4-year college has been rising at a rate higher than inflation. What does that mean? It means it is time to start saving –now.

Currently, the University of Virginia, will cost an out of state student $27,750 in tuition. That number does not include room and board, at $7,435. If that seems to be a large number now, wait until your 1 year old enrolls.

According to The College Board’s “Trends in College Pricing” tuition has increased an average of 6.5% per year for the last 10 years.

At that rate. when you one year old turns 18, tuition could cost over $80,000 per year. Fortunately, there are some options to help you start saving now:

529 Plans. Each state has there own 529 plan. Most states will give you a state tax deduction if you use your own state’s plan. 529 plans come in two forms—prepaid tuition plans and college savings plans. Prepaid tuition plans allow you to buy future tuition at today’s prices. College savings plans, on the other hand, offer tax benefits and a variety of investment options. Earnings grow tax-deferred, and qualified withdrawals are tax-free. Nonqualified withdrawals are subject to income tax, as well as a 10% federal income tax penalty.

Coverdell Education Savings Accounts (ESAs, formerly known as Education IRAs). You can contribute $2,000 annually to an ESA, and funds may be used to pay for elementary and secondary education, in addition to college expenses. One major advantage of Coverdell ESAs is that if the funds are used to pay for qualified education expenses (e.g., room and board), earnings will not be taxed. Certain income limits may apply.

Series EE Savings Bonds. These types of savings bonds usually can be purchased and/or redeemed at your local bank. They are issued in denominations that are half of the bond’s face value ranging from $50 to $10,000. For example, a $50 bond would cost $25. Depending on your income tax bracket, EE savings bonds may offer state and local tax-deductible interest. When used for qualified education expenses, interest may be free of state and federal taxes, as well. However, they are generally subject to federal income tax and early redemption penalties may apply if the bond is redeemed in the first five years. Another possible advantage to savings bonds is that they may be purchased by anyone for your child, for any occasion.

Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA). UGMA and UTMA accounts are custodial accounts. You may make unlimited contributions to such accounts, and the funds may be used for whatever purchases you deem appropriate. The UGMA account is particularly useful if you are considering purchasing stocks or mutual funds for your child to help save for education. More specifically, UGMA typically authorizes the transfers of cash, bank accounts, stocks, and mutual funds to minors without the need for an attorney; an UTMA account authorizes expanded transfers, including real estate, and royalties. For both UGMA and UTMA accounts, a portion of the earnings may be tax free or taxed at the child’s rate, generally a lower figure. You may make unlimited contributions to such accounts, and the funds may be used for whatever purchases you deem appropriate.

If you plan wisely, when your precious one year old enters college, you will be emotional for the right reasons.

In continued attempts to entice new cardholders, credit card issuers have developed a large variety of credit card offers. Consumers now have access to just about every type of credit card they are looking for; many of which offer rewards. Travel reward credit cards are great for people who travel frequently for business or pleasure. Most credit card issuers allow cardholders to redeem points for hotel stays, airline miles, car rentals, cruises and more. These points are earned every time you use your card to make a purchase.

If you often travel for business, then you probably stay in the same chain of hotels, use the same rental car company and fly on the same airline. Am I right? If so, you could potentially save your company thousands of dollars each year in travel expenses or earn free travel for you or your family. Many issuers have credit card offers that are affinity based with many of the service providers that business travelers frequent. If this is the case – get a travel rewards credit card! With each business trip purchase you earn points, sometimes double points or more, towards free hotel stays, free airline flights, free car rentals and more! If you earn enough points, you can earn a combination of all three for a vacation that has virtually no travel expenses.

If you travel a lot for personal pleasure, then you can probably relate to your business counterparts who also tend to frequent the same hotel chains and airlines. If this is the case, then you should get a travel reward credit card too! By earning points that can offset or even eliminate most of your travel expenses, then you can afford to spend an extra day with family or friends or you even take that extra little trip to visit that “hidden” destination. Either way, you’ll be glad you did because you earned it by making purchases with your travel rewards credit card.

Whether you’re a business traveler or travel for personal pleasure; take advantage of all that credit card issuers have to offer. Travel reward credit cards can give you the flexibility to choose how you’ll be rewarded on your next trip.

Have you been wondering how to fix your credit report score? Stop worrying about it and take control of the situation by monitoring your credit report score. If you have a low credit score, you can find out how to raise it by getting the free consultation the credit repair service has to offer you.

Get to Know What’s in Your Credit Report

You should know what is found in your credit report score. After all, it is a financial history that you have written, including details about how you pay your bills. Thanks to the United States Federal Trade Commission, you can get a free copy of your credit report from all three of the national credit-reporting agencies, TransUnion, Experian and Equifax.

While looking at your credit report, keep in mind that this is the same information given to banks if you ask to borrow money from them or potential landlords that you may apply for housing from. Your credit report score will be the determining factor for a credit agency to qualify you for one of their programs.

Reporting Agencies Do Make Mistakes

Small errors on your credit history file could cause you to have a lower credit score than you deserve, so be sure to look over your credit report carefully, at least once a year. Report any errors immediately to the credit company who has given the wrong information. Besides company errors in reporting, other reasons for errors on your credit report could be fraud or identity theft, just another reason to monitor your credit report yearly.

Obtaining a Free Credit Report

If your credit score is so very low, you may need to acquire the services of a credit repair agency. A credit repair agent can put your mind at ease by giving you the information about repairing your credit report and will most likely suggest a debt consolidation loan to manage your debts, worry free. A debt consolidation loan will combine all of your eligible debts into one small monthly payment.

Your FICO credit score is a numerical score derived from your financial activity over the life of your credit history. FICO credit scores change frequently with new activity in your credit report. It can range from a score of 300 to 850, with 850 considered excellent and 300 considered very bad credit. Your FICO score is the number banks and other financial institutions use to decide whether they will loan you money or not. The better your FICO credit score, the more likely you will get the loan.

You should know how your FICO score affects your financial health. The numerical score for your FICO credit score is based on your credit history and the information contained in your credit report. Your credit report keeps records of all the bills you’ve ever paid and if you paid them in a timely manner. Banks and other financial institutions decide if you will be a risk to loan money to from your FICO score. The higher your score, means that you will be less of a risk, and the more likely you will be to repay the loan.

FICO Credit Score Ranges:

300-499 Very Bad Credit
500-580 Bad Credit
581-619 Poor Credit
620-679 Average Credit
680-699 Good Credit
700-850 Excellent Credit

You will find that your FICO score is important to your finances because it proves to your lenders how you handle your finances. If you have a low credit score, you will find it hard to get a loan. If your credit score is high, you will be able to pick and choose who you borrow from in order to get the best deals available.

Make it a priority to know what’s in your credit report and what your FICO credit score is. If you let your credit score drop, it could take many years to get it back on track, and could also lead to financial disasters.

Now that you are aware of how your FICO score impacts your finances, you may be wondering “How do I get a free online credit check?” Easy, To learn more about obtaining a free online credit report, visit http://freeonlinecreditcheck.googlepages.com/, an excellent resource on credit reports and your credit score. There are dozens of websites that offer totally free credit reports. There are so many, in fact, that it can be a little bit overwhelming when trying to decide which company to choose. Some things to look for when choosing a credit reporting service are: ease of use, customer service and assistance, detail of reports, accuracy of reports, and whether they offer to assist in repairing your credit score.

If you are about to begin college, you’ll find yourself bombarded with opportunities to apply for as many credit cards as you can handle. You’ll be offered t-shirts, visors, sun glasses, I even got a portable massager once. The problem is, you’ll probably be offered more than you can handle. Just as the tobacco companies prey on the young, credit card companies view young college students as the best investment they can make, for themselves, not for you.

Now don’t get me wrong, credit cards are not the ultimate financial evil. Used correctly, they can be a great asset. You just need to limit how many cards you get, and how you use them. Just as importantly, you should get a card that fits your needs. If you are going to use a credit card, you might as well get the most out of it that you can.

Rewards cards are best for this. For example, if you are going to school far away from home, and will be flying back and forth, you may want to get a rewards credit card that offers sky miles, or adds to your current frequent flier miles. If you are going to school closer to home, or commuting, you’ll probably want to consider a gas rewards card. Other rewards credit cards that are issued these days are hotel rewards, retail rewards, travel rewards, or even cold hard cash.

Don’t just jump at a rewards credit card just because of the reward it offers, you’ll also want to look at interest rates, fees, penalties, and all the fine print. Rather than rewards, you may want to reward yourself with an introductory 0% interest rate, these are usually interest free for the first six months. Just make sure you can still handle the payment once the interest kicks in. All to often I come across people who maxed their cards out during the interest free period, and were unable to keep up the minimum payment once the interest free period was over. Keep in mind too that 30% of your credit score is based on how much you owe, and 35% is based on how you pay your debts, i.e., on time, 30, 60, 90, and 120 days late.

Many companies offering credit are also looking at your debt to credit limit ratio so it’s very important to refrain from maxing out your credit cards. They look at it like this: Let’s say I have three credit cards each with a $5,000 limit. On the first card I have $1,000 charged to the card, on the second I have $3,000, and on the third, I have $1,500. Should something happen to my source of income, I still have access to $9,500 to carry me through a rough time. Now lets say I only have one card with a $1,000 limit and $500 charged to the card. Even though my debt to income ratio is great, if something happens to my income, I only have $500 to help me out, so the credit card will probably get maxed out, and the payment not made. The credit card companies can preach all day that a good debt to credit limit ratio shows responsibility, but they couldn’t care less whether or not you are responsible in the use of your cards, just as long as you continue to make payments to them.

We have an article that details the benefits of canceling old, unused credit cards, but is this always a good idea? The answer to that is no. There are times when keeping a credit card line open is actually more beneficial to your overall credit health than closing it.

One occasion when you might want to hold off on canceling those older credit cards is when you plan to apply for a major loan. Major loans include such things as a home loan, car loan, boat loan, or other loans in excess of a few thousand dollars.

The reasoning behind this is that closing credit line accounts, especially those that you paid on time and in full, can actually lower your credit score.

Paying down accounts that still have a balance is important to your credit score, but simply closing paid off accounts will not help you improve your credit score at all. As mentioned above, canceling a large amount of unused credit may actually hurt your overall credit score.

You may be saying to yourself: That doesn’t make sense!

Here is how this works. It has to do with how credit bureaus calculate your score.

The reporting agencies use many different factors when figuring out your credit score and one of the factors that they use is the total amount of debt you have on your credit cards and the revolving accounts that you have divided by the total amount of debt available on those accounts. Once these calculations are done, a number less than 1 (one) will occur.

This fractional number is one way they use to judge your credit worthiness. The lower this fraction is the better. To help you better understand this, if the resultant number was exactly 1, then that would mean that your outstanding debt is equal to your available credit and you would be at the maximum level, or maxed out for credit.

For example, if you had $5000 in current debt and you had $15,000 in your various credit lines, you would divide $5000 by $15,000 and you would get 1/3. This means you are currently using 1/3 of the credit that is currently available to you.

To take this a step further: If you cancel an old credit card that has a $5,000 limit (but no current balance owed on it) you will still have the same $5000 in current debt (see above example) but you only have $10,000 in your credit lines (as compared to the $15,000 mentioned above). When you do the math you come up with the fraction of ½. In other words, you are using ½ of the credit that is available.

Keep in mind that the closer you get to the number 1, the less attractive you are for future credit.

The best advice for anyone contemplating a home or auto loan is to keep the credit lines that you have until after you have finalized the loan itself. Then it is safe to cancel the card.

If you are not planning a major loan activity and the balances on your old cards is zero, go ahead and close them out. This will not hurt your credit score.