Keep tabs on your credit utilization.
A credit utilization ratio is a calculation used by creditors that measures how much credit you’re using compared to how much you have available. The more unused credit you have, the better. Your credit utilization accounts for 30% of your score.

Stay in contact with your lenders.
If you find yourself in a tight spot and you don’t think you’ll be able to pay your bills on time, contact lenders immediately. You might be able to work out a payment plan.

Devise—and stick to—a budget.
Knowing exactly how much money you have available will help you manage your finances.

Cut the fat.
Once you’ve devised a budget, identify areas where you’re overspending. Cut back or eliminate those items.

Pay off high-interest debt.
Once you’ve paid off those bills with the largest interest rates, apply your dollars toward your next highest debt and so forth. This way, you’ll get rid of high maintenance fees faster.

Use cash whenever possible.
Paying for items with actual dollars from your wallet will make you think twice about creating new debt.

Add income.
If your belt can’t get any tighter and spending less isn’t helping much, find a way to make more money. Now is the time to look for a part-time or freelance job.

Seek help from a certified financial planner.
A CFP can help you identify areas where you need to improve and assist you with reaching your goals. Some planners will conduct the first session for free or at a reduced cost.

Here are four ways to keep your credit in tip-top shape during the holidays.

Don’t apply for store credit cards.
Opening a new account could spell trouble for your credit score. This is because the length of your credit history makes up 15% of your FICO score.  The older your credit age the better, as it shows a long history of credit management. Opening a new credit card account will lower your overall credit age, and consequently, your score. Applying for credit also means that there will be an inquiry on your report. Inquiries related to new credit accounts make up 10% of your FICO score.

Don’t overcharge.
Be mindful of how much you’re spending. If you won’t be able to repay the amount you charge at the end of the month, reconsider your purchase. Charging too much on your card will cause the amount you owe to spike. Amounts owed account for 30% of your FICO score.

Be cautious when shopping online.
If you’re shopping for gifts online, make sure that you only visit websites that you’re familiar with or that you’ve done business with in the past. You can also protect your information by applying for a temporary credit card number. To do this, you have to contact your credit card issuer or bank and make a request. The bank then provides a new, temporary number that is linked to your credit card account.

Don’t forget to pay your bills.
It’s easy to forget to pay your bills when you’re traveling and visiting relatives. Set up reminders on your calendar or automatic bill payments so that you won’t miss a payment and get a negative mark on your credit report.

STEP 1 : Plan ahead.
Figure out meals for the week ahead of time. This way, you’ll clip coupons according to what you need. This will also save you from engaging in impulse buying as you wander aimlessly through the grocery store aisles, deciding what you need to buy. “There are sites online called grocery list matchup sites. They track the sales cycles of the stores for you and give you a list of where everything is in the cycle and when things are at their lowest price. Then it tells you exactly what coupon to use. If you use one of these lists, you’re looking at spending only 30 minutes to an hour per week on planning. All you have to do is click the things you need to buy, print the list, get the coupons, and you’re ready to go,” says coupon expert Jill Cataldo. CouponMom.com is one popular grocery list matchup website.

STEP 2: Search for coupons.
Store circulars and the Sunday paper aren’t the only places you’ll find coupons. There are also coupons online. Some of the most popular coupon sites are Coupons.com and CouponCabin.com. Some store websites also feature printable coupons. In addition, if you sign up for a store’s mailing list, you’ll often get coupons in the mail or via e-mail.

STEP 3: Wait for sales.
The best way to maximize your savings is to use coupons when they match up with store sales for the week. Also, go to stores that double or triple the value of coupons for even bigger savings. “Using a coupon at the right time is just as important as using a coupon. For example, if I have a coupon for $1 off Crest toothpaste, I don’t want to use that coupon when it’s $2.99, I want to wait to use that coupon until it goes on sale for $1.00—then it’s free,” says Cataldo

STEP 4: Branch out.
Don’t feel obligated to stick to certain brands. If you see a coupon for an item you need, but it’s not the brand you usually buy, try it. The savings will be worth it. Also try shopping at different stores. For example, Target has great deals on groceries. In addition, make sure to sign up for store loyalty cards.

If you owe a large amount or if the debt is reaching its statute of limitations (past the number of years when a debt collector could sue you and win in court), a collector may be more likely to sue. “Once the statute of limitations on a debt has expired, depending on state law, they either can’t sue you, or if they sue, you can tell the court the debt is too old, and they would lose the lawsuit,” says Detweiler.

A creditor may also be more likely to sue if you’ve sent a cease communication letter. It’s your right under the Fair Debt Collection Practices Act to write a letter to a debt collector stating you don’t wish to be contacted. Be aware, though, that such a missive could trigger a lawsuit. “It leaves them with no other option but to sue you because they can’t call you, talk to you, or try to work something out,” says Detweiler. So unless you know for sure you don’t owe the debt and there’s nothing they can go after, use caution when sending this type of letter.

So, what should you do if you’re sued?

Consult an attorney
Many attorneys will provide a free or reduced-cost initial consultation. It is recommended that consumers at least talk to an attorney with expertise in representing consumers in debt collection cases, according to Detweiler and Sonya Smith-Valentine, a consumer rights attorney and author of the forthcoming book, How to Have a Love Affair with Your Credit Report. “Bankruptcy attorneys are familiar with the debt collection lawsuit process. They understand what happens if a collector enters a judgment against you. They’ll also know what property is safe from creditors and what’s not,” says Detweiler. At the National Association of Consumer Advocates website (www.naca.net/find-attorney), you can search for an attorney by area of expertise as well as location.

Organize your documents
In order to prove that your debt is past the statute of limitations, have available the last six months (at least) of payment statements before you stopped paying. “This will show where the statute of limitations should be calculated,” says Smith-Valentine. She notes that a credit report by itself is inadequate to prove that a debt is past the statute of limitations. “You need to have information regarding when payments were last made on the account provided directly from the creditor, not a third party,” she says.

Show up in court
“If you don’t, the court might issue a judgment against you for the amount the collector is suing you. Consequently, the collector can attempt to garnish your wages or freeze your bank account,” says Smith-Valentine.

Sometimes you can work out a settlement or payment plan if you’re sued. “However, if you come to an agreement, make sure you get it in writing before you pay, and confirm with the court that the debt collector has dropped the lawsuit,” says Detweiler.

If you’re struggling to keep up with your credit card payments, credit counseling is probably one solution you’re considering. However, you might hesitate to seek help because you believe one of the many myths floating around about what can happen to your credit if you talk to a credit counselor. Read on so you can separate fact from fiction.

FICTION: Credit counseling will hurt my credit score.

FACT: Credit counseling has no effect on  your score. You won’t be penalized for getting the help you need. What’s more, not getting assistance could do more harm than good. If you continue to let your situation spiral out of control, you’ll be in a much worse position.

FICTION: If a counselor arranges a debt management plan, I don’t have to pay my bills.

FACT: The purpose of a debt management plan is to help you get a  handle on your debt and make it easier to pay off your bills by arranging for a lower interest rate or a lower monthly payment. The goal is to learn responsible money management. In other words, you still have to pay what you owe.

FICTION: Credit counseling is expensive.

FACT: Not true. You can receive credit counseling from a certified consumer credit counselor at low or no cost.

FICTION: A credit counselor will fix my credit and wipe out all  negative marks.

FACT: A consumer credit counselor cannot clean up your credit report. If the negative marks are accurate, they can remain on your report for up to seven years. A bankruptcy will remain on your report  for 10 years.

For more information on credit counseling, visit the National Foundation for Credit Counseling website. They have a wealth of information, including a budget worksheet, calculators, and a financial education blog. You can also conduct a counseling session online. And help doesn’t just stop at credit cards. In addition, the NFCC offers housing counseling, bankruptcy counseling, and education.

Mistake 1: Having inadequate insurance—or none at all. Just because you haven’t had a cold in five years doesn’t mean you don’t need health insurance. Your health could change at a moment’s notice. Why take the risk of having a major accident or unexpected health issue and then being saddled with a hospital bill that could take years to pay off? In addition, singles should have long- and short-term disability insurance. If you are unable to work due to a disability, you’ll need to have your salary covered.

Mistake 2: Not having emergency savings. While married couples need to have at least six to eight months stashed in an emergency savings fund, singles need to have at least 12 months of expenses saved. Why? Because you alone are responsible for your financial survival, and the impact of not having enough saved in case of an emergency could be much more serious. For example, if you’re married and can’t find steady employment after an extended period of time, you’ll still have some financial support from your spouse when it comes to basics like groceries and mortgage payments. If you’re single and run out of money because you can’t find steady employment, you’re in a much tougher spot. It could get to the point where you can no longer feed yourself and keep a roof over your head. Prepare for the worst case scenario—just in case.

Mistake 3: Not having an estate plan. Estate rules vary depending on your state of residence. However, in most cases, if you’re single with children and die without a will (dying without a will is known in legal terms as intestate), your estate would be split evenly among your children. But if you’re single wit no children and you die intestate, your estate would be automatically distributed to your parents (if they are still alive). However, you may not want this arrangement. Perhaps you want your estate distributed to a favorite uncle or aunt who really needs the money. If you didn’t specify that in your will, you’re out of luck. There’s no guarantee that your parents will distribute the money as you had intended.  Depending on state laws, if a married person dies intestate, all of their property could go to their spouse. So regardless of marital status, it’s important to clearly outline your wishes after death so that your property is passed on to the appropriate people.

The cost of a college education could quickly empty out your pockets. It’s probably the most expensive purchase you’ll make besides a home. Who wouldn’t want a break on tuition? The good news is you can lighten your financial load by taking advantage of tax incentives that are available to you. The April 2012 tax deadline is several months away, but you can start tracking educational expenses that might be eligible for a tax break. Here are some tax deductions, credits, and savings plans that will help loosen the chokehold on your wallet.

American Opportunity Credit. Tax credits are beneficial because they reduce the amount of income tax you might have to pay. The American Opportunity Credit adds required course materials to the list of qualifying expenses and allows taxpayers to claim the credit for four years of college instead of two. The maximum annual credit of $2,500 per student is available to individuals whose modified adjusted gross income is $80,000 or less or $160,000 or less for married couples filing a joint return.

Business Deduction for Work-related Education. Deductions reduce the amount of your income that is subject to tax, which can reduce the amount of tax you might have to pay. If you’re self-employed and you itemize your deductions, you might be able to claim a deduction for money used to pay for education related to your job. According to the Internal Revenue Service, the deduction will be the amount by which your qualifying work-related expenses in addition to any other job expenses is more than 2% of your adjusted gross income. If you are self-employed, you can subtract your expenses for qualifying work-related expenses from your income. Consequently, this can lower the amount of your income subject to both income tax and self-employment tax.

Scholarships and Fellowships. Whether the amount is tax free or taxable depends on the expense paid with the scholarship or fellowship and whether you’re a candidate for a degree. A scholarship or fellowship is tax free if you’re using it to pay qualified educational expenses and if you’re a degree candidate. Qualified educational expenses include tuition and fees and course-related expenses such as books, supplies, and required equipment. Non-qualified expenses include the cost of room and board, travel, research, clerical help, and equipment or other expenses that aren’t required for courses.

Expansion of 529 Plans. These plans come with a tax-free withdrawal of earnings that build up in the plan based on the contribution made. Tax-free college savings plans and prepaid tuition plans can also be used to purchase computer equipment used for school.

For additional information and a detailed list of restrictions, go to the IRS website and check out the Tax Benefits for Education Information Center.

If your business is structured in such a way that you’re personally liable for your business debt (such as a sole proprietorship or partnership), you are personally responsible for the card. Therefore, your business credit card usage is reported on your individual credit report, which means your personal credit could be negatively affected.

Here are some things you should watch out for:
Account terms can be changed at any time. The Pew study found that 80% of business credit cards allow issuers to change terms of an account at any time with little or no notice or ability to opt out.

Penalty fees are unrestricted. The study also found that 73% of business cards had a late fee attached to them and 67% of business cards had an over-limit fee.

Payments can be applied to lower-rate balances. Credit card companies can apply your payments to low-rate balances first while interest accrues on your higher-rate balances.

An application model is a scoring system that takes into account information you put on an application. All the information (salary, how long you’ve been with an employer, whether you rent or own, how long you’ve lived at the same address, etc.), in addition to your credit score, is scored. Based on your answers, you are then given a custom application score. Lenders also use application scores by themselves in order to make a loan decision. A good application score doesn’t mean a good credit score, and a bad credit score doesn’t mean a bad application score. In a case where one score is good and one score is bad, conservative lenders could make their decision on the lower score, especially in light of the current economic climate.

Custom scores are used because they’re more predictive than a credit bureau score. “Credit bureau scores are referred to as generic scoring systems. Any lender of any size can use them; they can all buy the same exact score from a credit bureau. But a custom application score is a score that only a specific lender has access to,” says Ulzheimer.