10 ways to keep debt contained in 2015

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For well over a decade, it has been my pleasure to help my readers deal with debt and credit issues. The nature of my column means that readers write to me after experiencing a problem. Once a year, I give my top 10 tips for the coming year to help people prepare for, and hopefully avoid, those pesky problems.

There are big changes looming in 2015 from the large number of database breaches, as well as medical debt treatment and rising interest rates. How can you prepare to meet these challenges in the new year?

Here are my 10 best tips to keep you safe from debt in 2015.

1. Keep ahead of identity thieves by monitoring your credit reports

Identity theft continues to top the Federal Trade Commission's national ranking of consumer complaints. Millions of files containing personal and credit data were hacked in 2014. You can spot new fraudulent credit inquiries or accounts by getting a free credit report from one of the credit bureaus every four months at

2. Get help immediately if you believe you are the victim of identity theft

The place to get that help is the Identity Theft Resource Center at

3. Be alert

Place a fraud alert or freeze on your credit report if you have been told your data was compromised. At a minimum, place an extended fraud alert on your credit file. New credit applications will be scrutinized more carefully with this warning. Are you losing sleep worrying about identity crooks? You can freeze your credit file so no one will be able to access it without your permission.

4. Know your score

In 2015, it will be more important than ever to know your credit score. Why? Interest rates have been low for years. Experts expect this to end next year. Your credit score affects your ability to get credit and to get a low interest rate. Know what your score is and if you don't like it, find out how to improve it.

5. Get clean in 2015

Clean up your credit reports. Many credit reports contain errors that can be repaired easily. Contact to get your free credit report. More than your interest rates are based on your credit reports. Credit reports are used to screen you for insurance, jobs, promotions, security clearances and more. So read them and fix them, and do it often. Don't forget to ask national specialty credit reporting bureaus for your free reports on everything from medical data to gambling history. I list 46 of them in my book, "Credit Repair Kit for Dummies."

6. Lock in variable interest rates

Rates based on an interest benchmark like the prime rate or Libor, or London Interbank Offered Rate, are expected to rise. Lines of credit, credit cards and student loans may see increases in 2015.

7. Push back at credit card issuers

As rates rise, yours don't have to. Contact your credit card companies and ask for a lower rate. If they charge a fee for their card, ask for that to be lowered, too. Good customers are valued. I have saved several hundred dollars with this approach.

8. Ask for forgiveness

If you expect to go through a foreclosure, ask the bank to forgive any deficiency as part of any agreement to give them back the keys. More banks are now pursuing deficiency balances on mortgages than they have in the past. This may have tax consequences since the Mortgage Debt Forgiveness Act has expired.

9. Get a handle on your debt

Find out where you stand and make 2015 the year you come up with a plan to pay off high-interest debt, even if you can't completely pay it all next year. Knowing where you stand is the first, and sometimes the hardest, step to take, but it will be well worth your time.

10. Be prepared

For more than 20 years, I have been beating the drum to get people to set up an emergency savings account. Next year, emergency savings can help you get through any of the issues covered by the previous nine tips. Use money you don't have yet to fund your account. Put half of 2015 raises, promotions or tax refunds into savings and you will have a happy and secure 2015.


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