10/25/2011 12:09 pm ET

Radio Talk Show On Credit

I did a radio interview for a show called Tomatoes in the Trenches.

I was interviewed by Cheryl Benton & PTA Mom from The Three Tomatoes. We were joined by Jan Bina and Debbie Zipp from In the Trenches Productions on the West Coast.

We talked about employment, refinancing homes, what happens when closing credit card accounts and so much more! These ladies had great questions!

Q: If you've never had a problem with your credit, why should you check your credit report/score?

A: You need to be aware of what is being reported. Something could be incorrectly reported as a late payment or an account that does not belong to you. If you are aware of an error then you can fix it!

Q: I was surprised to learn that potential employers may check your credit report as part of the application process. Is this a common practice?

A: It seems to be happening more & more. Some jobs in the financial industry have a policy that your score has to be a 660 or above. Credit is important not only for interest rates & loan approvals, but also for your job.

Q: A while ago I thought I'd simplify my life by closing a VISA account which I'd held for many years. A friend advised me not to. Why would my FICO score drop if I closed a long standing VISA card?

A: Closing credit cards can lower your score because it is changing your ratio of credit limits available to you vs. your balances.

Q: The rate for 30 year fixed mortgages may drop below 4% which is going to create another wave of re-financing. I have a 2 part question: If we plan to re-finance, how should we prepare? Why does an inquiry by a potential creditor lower your credit score?

A: The impact of an inquiry can be as little as 5 points, but when you apply for many accounts in a short period of time it can be reviewed as a risk and that is why it is important to be careful about when and who you have pulling your credit. As far as preparing for a new home loan with your credit would be, think ahead. You want to at least 3 months in advance pull your FICO score and know where you stand. Then review your credit reports and if you see any errors you have time to contact each credit bureau to get them fixed and lastly if you see you need a higher score you can lower your credit card balances to get more points. It can take time for the new balances to get updated so again plan ahead.

To listen to more questions you can go to

Please write to me and let me know if you have a credit question and maybe I can use your story in an upcoming blog