ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, May 13, 1996 TAG: 9605130163
SECTION: BUSINESS PAGE: 6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Are you borrowing money on your credit cards to pay current bills?
Do you charge everyday expenses or small items?
Is there an increase in the number of arguments in your household that concern money?
Are you paying more than 20 percent of your take-home income for installment purchases and credit card debt?
According to Virginia Garretson, president of Consumer Credit Counseling Service of Roanoke Valley Inc., these are some of the signals that could alert you to possible financial danger because of the way you have handled your credit.
Here are a few more questions to ask:
Are you forced to reduce your debt payments to pay for food and housing expenses? Are any of this month's bills coming in before you have finished paying the bills from last month?
Do you find yourself unable to save money for expected annual and occasional expenses such as insurance premiums, car repairs and property taxes?
Are you borrowing more money before the old loan is paid off? In other words, are you renewing loans before repaying them?
Is your total indebtedness more than you can pay off in 12 months?
And, finally, do your charge account balances grow each month? Are you at the limit on your credit cards?
If you have answered ``yes'' to any of these questions or to any of those in the accompanying credit dilemma test, Garretson said, you need help managing your money.
That is especially true, she said, if more than 20 percent of your paycheck is devoted to installment payments and credit card charges, though other credit advisers set that limit as low as 15 percent.
Garretson recommends that anyone slipping into financial trouble should put away his credit cards. Better yet, she said, cut up the cards and return them to the creditors.
People say they need the cards for traveling. Garretson replies that people should review the bills for the things they are charging. If they do, she said, most will conclude that they are charging for impulse buying, not travel.
``We are fooling ourselves,'' using the cards ``to get what we want,'' she said.
Besides, anyone in financial trouble should question whether he has the funds to afford trips.
Consumer Credit Counseling offers free classes for people who believe they are getting in over their heads financially - or who would simply like to improve their money management skills.
The class begins with the test on financial dilemmas. Garretson said people are asked to fill out the answers honestly, but they don't have to show the responses to anyone. The test is for your own guidance.
The class covers budgeting and money management and lasts only 90 minutes. Only one class is necessary.
In Roanoke, the class is scheduled from 10:30 a.m. to noon every first Wednesday and from 7 to 8:30 p.m. every first Thursday. It is given at the agency's headquarters at 7000 Peters Creek Road.
Similar classes are also held at offices in Christiansburg, Bristol, Lynchburg and Martinsville, and in Kingsport and Johnson City, Tenn. (In Lynchburg, Kingsport and Johnson City, the agency is known as American Credit Counselors Inc.)
Although there is no charge for the classes, the agency requests advance registration by phone. The number in Roanoke is 366-2227. Residents of other communities should call (800)926-0042.
Some people in serious credit difficulty may also enroll to work with Consumer Credit Counseling in preparing a budget and paying off debts. If necessary, the agency will take the person's payments and distribute them to creditors.
In many cases, Garretson said, the agency can work out a reduction in minimum payments and interest rates, or even elimination of interest, for people enrolled in the program. The family must, however, agree to live on a budget.
When a family completes the program, she said, the agency helps them re-establish credit and work out a savings plan.
People in potential trouble should also check their credit reports. The reporting agencies must provide one free copy if the person has been rejected for credit, employment or insurance within the past 60 days because of adverse information in a credit report. You must submit the letter of rejection with your application for the free report.
There are three major credit reporting agencies:
Equifax is used by the Credit Marketing and Management Association of Roanoke, which covers 12 Southwest Virginia counties and has satellite offices in Dublin and Galax.
Ronald Ernest, president of the association, said you can see your credit report for $5 at the Roanoke office at 5240 Valley Park Drive in Valley Pointe or at the satellite offices. In some cases, the credit report is free.
TRW, another reporting agency, can be reached toll-free at (800)682-7654. TRW will give you one free report a year if the request is made in writing. Instructions for writing are given on the phone line.
You can reach Trans Union, the third agency, by calling either (216)779-2378, which gives instructions about writing, or (316)636-6100, which is an interactive ordering line. There is a toll charge for these calls. The agency charges $8 for a report unless you qualify for a free copy, according to a spokeswoman.
If you find an error in your credit report, don't be afraid to challenge the information. The credit bureau must investigate the disputed data, correct any errors and delete any information it cannot verify.
You also have the right to submit a short (100-word) statement explaining any facts pertaining to your credit information. Your statement will become part of your credit report.
LENGTH: Long : 108 lines ILLUSTRATION: GRAPHIC: Are you in a credit dilemma? colorby CNB