What is the best way to negotiate with a credit-card company for lower interest rates?

Many credit-card companies and other creditors will discuss reducing their interest rate in one of two situations: when they believe that a valued customer will transfer their business to another card company or creditor offering a lower rate, or when they believe that a customer is facing a real financial hardship, and that a reduction is necessary to prevent the customer from filing bankruptcy. In these cases, it could be worthwhile to contact your creditors.

How can I consolidate a large amount of credit-card debt without using any assets for collateral?

Anyone with a large amount of debt and no collateral available to secure a loan would have real difficulty obtaining an unsecured loan, especially at a reasonable interest rate. There may be companies offering unsecured consolidation loans at fairly high interest rates, but those rates may be at or higher than the rate on the credit cards.

Does the number of credit cards I hold, even if I don't carry a balance on any of them, affect my credit rating? What if my credit lines are large? Is there an advisable ratio?

Most credit grantors today make their decisions on to whom they will grant credit to, and how much they will give, by analyzing credit reports. Two factors they definitely look at is how much credit is available to an individual, and how many accounts that individual has with other creditors. Therefore, it is usually advisable to close any accounts or lines of credit you don't need. While there is no ideal ratio, the more accounts of unused credit you have, the more likely that certain creditors will refuse you new credit or charge you higher rates for that credit.

I want to clear up an old debt that was handed off to a collection agency about six years ago. Problem is, no one has contacted me in awhile, so how do I find the debt?

Contact the business or individual to whom you originally owed the debt. They will accept the payment or refer you to the collection agency if it now owns the debt. Another possibility is to check the clerk of courts where you now live or lived when you last dealt with the collection agency, in case the agency recorded a judgment lien against you for the debt; the lien would identify whom to contact.

How do I get a copy of my credit report? Is there a reason I should request a copy if I don't have any credit problems?

You can request a copy of your current credit report from the three national credit bureaus by calling the following numbers; you will receive instructions on how to request the report. Usually, there is a charge of $8.00 for the report (although the agencies will sometimes give you a free copy of your own report).

• Equifax (800) 685-1111
• Experian (800) 392-1122
• Trans Union (800) 916-8800

It is a good idea to check the accuracy of your credit reports from all three national credit bureaus at least once every year or two, especially if you or anyone with whom you have a joint account (a spouse, for example) has frequent or large-amount credit transactions.

Is it wise to borrow from a 401(k) plan to pay off credit-card debt?

You should not borrow against your retirement savings to pay off credit-card debt unless you have too much debt at a high interest rate and your 401(k) funds are tied up in an investment that pays a relatively low rate of return.

You should be aware that you need to repay the 401(k) loan before you leave the job that offers you the 401(k) plan, or else you may owe income and excise taxes on the unpaid amount (that is, it may be treated as a premature distribution from the plan).