-- By Pushpa Sathish, Staff Writer

If you’re one of those people who like to start each New Year afresh with a clean slate, you’d better not be among the debt holders down under. According to industry estimates, the people from the land of Oz will enter the new year with a whopping $40 billion in credit card debt. And that’s not the end of the bad news – the people most in debt are older and retired citizens, who are in too deep and have no way of paying back their creditors.

The finger of blame is being pointed at the banks, as Katherine Lane of The Consumer Credit Legal Center accuses them of indiscriminate lending, aggressively soliciting new customers, raising limits for existing ones, and providing them with more cards. With some people owning eight and nine credit cards, spending is bound to increase. And making just the minimum payment every month will not help in paying back the principal. The breakdown comes when the bills start pouring in and families are unable to cope with the stress that is a part and parcel of the debt process.

The center is not able to handle all those who approach them for help, more so since the number has doubled over the last year. The trend of spending has also changed, with people throwing away money that is not theirs all through the year rather than just during the holiday season. Credit card debt stood at $15.5 billion in 2000, just one-sixth of what it is today.

Speaking on behalf of and defending the banks, Ian Gilbert, the CEO of the Australian Bankers’ Association (ABA), said that credit card debt remained at only 5 percent of total household debt. He added that the ABA encouraged responsible use of credit cards, and that according to statistics from the Reserve Bank, repayments were more than new transactions.

--By Priya Jestin, Staff Writer

How healthy are your credit ratings? Why do I ask? Well, because this thingummy called credit rating can actually affect the quality of your life? It could determine whether you lead a satisfied, happy life or find it extremely difficult to get the smallest of things done.

If you’ve ever applied for a personal loan, a job, or insurance, a consumer reporting agency promptly maintains your credit record. And they keep records of where you presently work, your designation, how many and what types of accounts you hold and your payment histories to these accounts. If there are any late payments, or outstanding debt, they are also mentioned.

All this information goes to create your credit scoring. You get points for each factor and the total points are tallied. This final figure helps the credit company ascertain if you will repay your debts on time.

Newspapers, radio, TV and the Internet are filled with advertisements that offer for a fee to erase accurate negative information in your credit file. The credit repair scam artists who run these ads can't deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit history record. This section is designed to help you understand credit reports and credit repair scams.

Credit Reports

Does your credit report accurately represent you? A recent study conducted by the Public Interest Research Group (PIRG) found over 70% of credit reports contain errors. Among the principal findings of the report were the following:

Twenty-nine percent (29%) of the credit reports contained serious errors that could result in the denial of credit."

"Serious" errors included false delinquencies, public records or judgments that belonged to a stranger, or credit accounts that did not belong to the consumer.

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