But whether or not a plastic revival will be good for consumers depends on how well they manage their accounts. To help ensure everyone stays in the black, MainStreet asked some of its favorite credit card experts to provide one piece of credit advice consumers can apply in the new year. Here’s what they had to offer:

Ken Lin, CEO of Credit Karma
“2012 should be the year for rebuilding credit. Consumers can take proactive steps by reviewing their credit report for errors, creating a plan to pay down any existing debt, and monitoring and tracking their credit scores to gauge their success.”

John Ulzheimer, CEO of SmartCredit.com 
“When choosing between retail store credit card debt and other general use credit card debt (like Visa or MasterCard), choose to pay off retail store card debt faster. The rate on those cards is 10 percentage points higher on average, so you’d be exhausting the most expensive debt the fastest.”

Tim Chen, CEO of Nerd Wallet 
“For those who are carrying a manageable balance, if you’re paying more than 10% on your credit card, call a few local credit unions and see if they can do better. Chances are that they can beat your bank’s rate, no matter where your credit stands.”

Curtis Arnold, CEO of CardRatings.com 
“The first half of 2012 should be a great time to shed debt incurred in 2011, including holiday debt. There will be some great 0% (no interest) balance transfer/teaser rate offers for up to 18 months that consumers can take advantage of.”

Adrian Nazari, founder and CEO of Credit Sesame
“So many people focus on coupon-clipping and penny-pinching, yet continue overpaying on their mortgages. So in 2012, instead of wasting hours of your valuable time wondering how to split your hard-earned dollars, resolve to look at the big picture – the big debt picture – and you may be surprised at the savings you’re able to find.”

Beverly Harzog, card expert with Credit.com
“Remember that you’re the boss. If you have excellent credit and you have a credit card with a high interest rate, call the issuer and negotiate. This can be really effective if you have a few low-interest credit card offers in hand from a competitor. You’re the one who decides which credit card issuer gets your business.”

Source: MSN Money

Interest rates and credit limits are not the only terms set based on credit scores. Insuranceproviders are beginning to set premiums based on credit scores. Property managers set rentaldeposits based on credit scores. Service providers, such as residential and mobile phonecompanies, approve accounts and set deposits based on credit scores. FICO scores range from 300 to 850, with 850 being the best possible score.

The average creditscore is 675 and the median credit score is 725. Typically, any credit score over 720 is eligiblefor favorable credit terms, like a low interest rate, while credit scores below 660 usually can onlyqualify for expensive, high-interest “subprime” credit.The average American has about $10,000 in credit card debt and the average annual percentagerate (APR) is about 15% (1.25% monthly periodic rate). If this average American paid 2.5% of the debt each month ($250), it would take 26 years to pay off the debt and cost $9,757.71 ininterest. So, this average American borrows $10,000 and pays back nearly $20,000.Now, imagine two not-so-average Americans borrow the same amount on each cardholder’scredit card account. One, we will call him Jack, has a 780 FICO score and the other, Jill, has a600 FICO score. Jack was able to get a 9% APR while Jill’s credit card company gave her a 24%APR. Using the same low monthly payment model as the average American with the 15% APR,we can see how much bad credit can cost you.Jack, with a 9% APR (0.75% monthly periodic rate), will pay $250 each month for 19 years andfour months to pay off the $10,000 balance and only pay $4,191.60 in interest. Jill, with her 24%APR (2% monthly periodic rate), will have to pay $298 each month because of new regulationsrequiring credit card companies to set minimum payments no lower than all interest and fees plus1% of the account balance. This means that more of Jill’s monthly income ($48) is consumedwith minimum monthly credit card payments, but that’s not all. It will take Jill about 33 yearsand five months to pay off the entire balance and she will pay $19,949.30 in interest – nearlytwice what she borrowed!

As you can see, bad credit is costly. It cost Jill an extra $15,757.70. Bad credit can causeproperty managers to require hefty deposits (that’s assuming they approve your rentalapplication) and may even cost you an employment opportunity as some employers use creditreports to screen potential hires – and let’s not forget about insurance premiums. But these areonly the immediate costs of bad credit. Jill also lost over 14 years and $48 of monthly cash flowthat she could have used to pay other bills and buy groceries.

The cost of bad credit stretches beyond what you pay in interest, deposits and higher insurancepremiums. There are the lost opportunities because so much of your hard-earned money is beingsunk down the bad credit drain. Your credit card payments equate to $250 you are not investingeach month into a 401k, ROTH IRA or other investment account. If Jill was able to contribute$100 to her company’s 401k plan and her employer matched her $100 each month for 35 years,she could retire with about $760,000 (assuming a 10% annual rate of return).

So, low credit scores cost us far more than interest payments and even more than the lostopportunity to earn nearly one million dollars. Debt stress seeps over into our personal lives,causing marital stress, personal stress and even health problems. But don’t let these facts get youdown. Use them to motivate you in your efforts to better your situation and put the gloomy daysof poor credit behind you.

A common public misperception is that these bureaus are government agencies or extensions of the federal government.In fact, the bureaus are private, for-profit companies that gather your credit history information and sell it to businesses that are legally permitted to see your report.The businesses allowed to request your credit report include creditors such as banks and credit unions, credit card companies, mortgage lenders, and retail stores, in addition to employers, landlords, and insurance companies. A consumer credit report is a document prepared by the credit bureaus that provides the following: Personal Information, Credit History, Public Records (bankruptcy, judgments, etc.), and Inquiries.Other than inquiries, all of the above information remains on your credit report for seven to ten years.This information is documented and sold to current and/or potential lenders, employers, landlords, and insurance agents for the purpose of providing the consumer’s payment history and credit worthiness. Based upon the Fair Credit Reporting Act, credit grantors are permitted to review your credit report to objectively determine your credit worthiness.There are 190 million credit active people in the United States who have a credit file, meaning they have applied for credit in some form since they were eighteen.As consumers pay their bills, most lenders report the payment and account information to at least one of the three credit bureaus. However, a recent study shows that up to 79% of all credit reports
contain inaccuracies.

While a bankruptcy, judgment, or late payments can lower your credit score pretty quickly, improving your score takes time.It is best if you check your credit scores and credit reports at least every 6-12 months, especially prior to applying for a loan.This way, you have no surprises when a potential lender views your report. You’ll have time to work on improving any inaccuracies on your credit report and work to increase your credit score, if needed.

1. Postpone that refinance until your credit is squeaky clean
Even a small blemish on a credit report can cost you at closing. Money expert Denise Winston found that out firsthand: Her husband hadn’t paid a $40 pager charge. The unpaid bill was turned over to a collection agency and ended up damaging his credit score.

Because of that one small unpaid bill, the interest rate on the couple’s mortgage was 0.25% higher than if he’d had a clean score. Put another way, that’s $13,000 over the life of the loan.

The lesson? Even small items can damage your financial position. Get your credit report beforehand to see if there’s anything damaging. If so, consider postponing a refinance (http://www.houselogic.com/articles/mortgage-refinance-you-have-think-long-term/) or HELOC (http://www.houselogic.com/articles/consider-home-equity-line-of-credit/) (home equity line of credit) until small but potentially costly dings fade over time.

2. Pay your mortgage-now
Not all late payments are created equal: Almost nothing hits your credit score harder than a late mortgage payment. Payment history generally accounts for 35% of your credit score, which is bad enough, but credit score agencies consider late home payments graver than late credit card or car loan payments.

In fact, credit score agency VantageScore will knock off more than 100 points beyond what it would do for delinquent auto loans or credit cards.

But if you think you can improve your credit score with early payments, think again. Geoff Williams, co-author of Living Well with Bad Credit, says it may make a slightly positive impression on today’s risk-averse lender, but it won’t make a big difference in getting future credit.

3. Cool it on second mortgages and HELOCs
Drawing down a second mortgage or HELOC can have a negative impact on your credit score because 30% of your credit score is based on how much you owe to creditors. However, if you pay the loan on time, it will have less of an impact, says Winston.

Also, you can mitigate the credit score damage of a HELOC by staying within 30% of the limit.

4. Protect your mortgage to protect your insurance rates
Late payments on your mortgage may also affect your home owners and automobile insurance rates, potentially costing you hundreds of dollars a year, says Williams. Insurers may assume that if you’re strapped for cash and pay your bills late, you’re more likely to file a claim because you need the money.

5. Pay your utility bills and property taxes on time
If you’re late on your utility bills and your account is assigned to a collection agency, that agency may report it, causing a drop in your credit score, says Winston. The good news is that utility companies often don’t bother to report late bills to credit bureaus until your delinquency becomes serious.

Interestingly, late payment of property taxes won’t affect your credit score unless you find yourself with a lien on your property. Since liens are public records, they may appear on your credit report and might cause a drop in your credit score.

6. Refinancing? Beware of taking out equity, too
Refinancing your home generally won’t have an impact on your credit score as long as you continue to pay your loan on time, says Williams. However, if you extract equity in the deal, you could marginally affect your credit score because the amount you owe will increase.

Credit score models that provide widely inconsistent scores can increase the risk exposure for a lender. That risk exposure results in less attractive products and pricing, because consumers who receive such scores are potentially not being matched with the right types of credit and at the most appropriate terms. Inconsistent scores occur largely because other credit scoring models use a different algorithm for each CRC, and because of variations in the data reported by creditors and the timing of that reporting.

“It benefits lenders and consumers to have credit scores that are as consistent as possible,” said Barrett Burns, president and CEO of VantageScore Solutions. “We developed this measurement methodology so that lenders can understand whether inconsistent scoring is obscuring their true risk profile. It is readily available in the research section of our website for all to download and use.”

The VantageScore credit scoring model is used by numerous lenders, making billions of decisions annually, including four of the top five financial institutions, the top five credit card issuers, two of the top five auto lenders, and one of the country’s largest mortgage lenders. Recent media reports disclosed that banking giant Chase adopted VantageScore in January of 2011. Secondary market participants including Fitch and S&P also rate securitized loan package issues using the VantageScore model.

Source: VantageScore Solutions, LLC

If you possess sweat remembering to pass your monthly payments on your attainment cards, it may be a saintly intent to see if you can set up an automatonlike entry from your bank reason. This way you never hold to perturb most missing a defrayal, and you can ever pay added if you requirement to.

Really don’t acquire almost any completely new debt. That way you may consentrate on repaying debt you presently have. After you purchase completely new debt, it could possibly produce repaying others trickier. When you have to employ a credit cards for just a invest in, always cash 100 % to protect yourself from interest fees.

Make sure to borrow no more than 30% of the credit available to you. Your credit score will start to suffer if you have any higher credit utilization than that. Make sure to use your cards, though, because using none of your available credit hurts your score as well.

An important tip to consider when working to repair your credit, is to be sure that you hang onto all of the good standing status for any accounts that you can. This is important, because if it comes down to it, going further in debt on one account is much better than ruining the record of two accounts.

Check credit reports for any mistakes. Sometimes credit reports have mistakes on them. This affects your ability to get credit today, so notify the credit reporting agency that you believe a mistake has been made. They will investigate and mostly likely remove it. Getting rid of mistakes helps your credit rating improve that much sooner.

Before signing up with a credit repair counselor, be sure they are a legitimate company. There are many scams that exist in order to take advantage of desperate people in serious debt. Read the reviews from other customers and the company’s listing with the Better Business Bureau before signing anything with a credit repair counselor.

Credit repair companies may offer to file dispute letters with credit bureau’s on your behalf. They may have expertise in this and it may help–if they are ethical companies. But, on the other hand, you can write these letters yourself with help from online tips–and save the fee you would have paid the credit company.

An easy way to start the credit repair process is to limit yourself to one credit card. The less cards you have the easier it will be to keep track of balances, fees and payments. Write the issuer of each card you do not plan to keep and close the account. You’ll need to transfer that balance or pay it off.

Credit repair is possible, just be sure you follow these helpful tips to get the most out of your efforts. You don’t have to pay higher interest rates. Given time, you can have stellar credit and obtain great rates on your loans and credit cards.

A new speculate finds that fill with bad assets scores are statesman restive – author believable to choose quick rewards kinda than wait for a larger teach ulterior. In it, two economists attempts to translate the rootage of the protection mortgage choice crisis.

“Most oft, the reasons economists put gardant are, maybe there was not enough display for mortgage applicants, or securitization, or opposite institutional reasons,” said Dr. Stephan Meier, who was excavation at the Fed Reserve’s Centre for Activity Economics and Decisionmaking with Dr. Charles Sprenger at the measure they did the explore.

“That’s definitely chief, but in the end humans neaten those payment decisions. So there must be author psychological factors that explain how people accomplish those decisions to fail or not.”

The search testament be publicised in an upcoming issuing of Psychological Science, a journal of the Tie for Psychological Subject.

During tax season, Meier and Sprenger recruited 437 low-to-moderate income group at a dominion center in Boston that was message tax intellection improve.

Apiece somebody was specified a questionnaire in which they made choices between a smaller, quick teach and a larger reinforcement ulterior. This is a lowborn judge for sight if grouping are choice to slow satisfaction.

The questions tender diverse period periods and dissimilar amounts. The participants also agreed to let the researchers gain their ascribe scores.

Short group had berth attribute scores. A low credit win can point several problems with assets in the recent, equal failing to pay bills or defaulting on a mortgage.

“Conceptually, it does pretend sensation that how group discount the futurity, i.e. how restive they are, affects their resolve to failure on their loans,” Meier said. “Individuals cumulate debt and then hold to terminate whether to move the money or use the money for something else.”

If they don’t pay off their debt, they will somebody short-term benefits – any exchange on extremity is open for something else – but the costs/problems come often subsequent, when a landlord, mortgage lender, or someone else sees their bad payment news.

Researchers countenance that not everyone defaults on a give by select as sometimes fill retrogress their job, see a monumental scrutiny crisis or several otherwise upset catastrophic experience.

“But there is a little bit of strategic defaulting deed on, where many group change this cost-benefit analysis” – those individuals would kinda feature solon money now and sell with the repercussions subsequent.