Keep focused on your long-term goal. So you’ve decided to reduce your spending to achieve a specific goal, whether it’s to slash debt, increase savings, or afford a new car or dream vacation. Now you need to take action to motivate yourself to fulfill that goal.

Whether it’s writing down daily reminders or pinning photos somewhere that you will see them every day, keeping that goal at the forefront of your mind will help you stick to your budget.

Find others with similar goals and band together. Bringing your lunch to work and avoiding dining out is a good way to cut expenses, so find co-workers and others who are looking to do the same. Conversely, avoid hanging out with the crowd that eats out two or three times a week.

Find ways to reward yourself for short-term achievements. If your goal is to reduce your spending by $50 a week, reward yourself at the end of the week when you achieve that goal. It may be a ticket to a ball game or a movie—something small you would normally do or buy that you cut out of your budget to meet your goals.

Keep a daily spending journal. It’s much easier to see where your money goes—and where you can reduce your spending—if you just write it down. It may be a bit depressing to see how much money you spend on coffee, soda, and snacks, but it makes it that much easier to stop spending money on such non-essential items once you see it in writing day after day.

If you can’t keep a journal, make a note to check your online bank account daily and jot down all your expenses.

Consider closing one or more credit cards. Shopping these days means having access to an iPad and a credit card. If you spend too much money shopping online, consider giving yourself fewer options by having fewer credit cards. While this may have a short-term impact on your credit score, it may be a good long-term strategy.

Ask for the support of family and friends. Talking about money with family and friends can be difficult, but if you want help from people, ask for their support. If that means cutting out costly trips to your favorite stores and night clubs, let them know you simply can’t afford to spend money at these places and meet your financial goals. Instead, get friends and family involved in the process by organizing inexpensive activities, such as potluck dinners and game nights, as opposed to dinner and drinks out on the town.

Schedule monthly and quarterly check-ups. Review your spending habits and goals at the end of each month and every quarter. Determine if you met your goal and if not, adjust your spending and savings plan. If you’ve fallen short, see if there are new areas where you can reduce spending and also make certain that your spending goals are realistic.

If you can’t make any more cuts, think about more serious changes, including selling your car (especially if public transit is an option), taking on a roommate, or getting a second job.

Mechel Glass is the Director of Education for CredAbility. In this position, she is responsible for developing the curriculum and educational materials for online classes including webinars, podcasts, videos and listen-on-demand classes. She is responsible for managing the agency’s community outreach programs and staff, including financial education specialists in a 14-county area throughout metro Atlanta and north Georgia. She also manages the development and reporting of education partnerships online for the agency.

Increased demand, increased write-offs

With the growing demand for student loans—currently at its highest level since 2006—and only a modest employment recovery, student loan write-offs have been increasing. Banks wrote off $17.4 billion in student loan debt in 2012, a record for the seven years tracked, according to a recent Equifax Credit Trends report. In addition, $5 billion in student loan debt was written off for the first three months of 2013, an increase of more than 45 percent from the prior year.

Outstanding loans and balances on the rise

The weak labor market and limited employment options for college graduates may also be contributing to a steady rise in student loan delinquencies and defaults. Outstanding balances on student loans, for example, increased by more than 16 percent from March 2012 to March 2013—from $748.6 billion to $896.9 billion. The number of outstanding student loans increased by almost 17 percent—from 107 million to 126 million.

Rising credit limits, new loan originations

While 2012 saw an increase in origination credit limits across six different loan types, the most substantial increase was for student loans—the student loan credit limit was at $88.5 billion in 2012, about a 24 percent increase from the $71.5 billion in 2011. Additionally, there were 18.6 million student loan originations in 2012, which was a 14 percent increase from the 16.3 million in 2011.

Because the college price tag is increasing faster than the rate of inflation, student loan debt is expected to grow. Therefore, it’s important that you consider how you are going to pay back debt once you receive your diploma.

All statistics from the Equifax U.S. Consumer Information Solutions: U.S. Consumer Origination Trends and U.S. Consumer Information Solutions: U.S. Consumer Credit Trends reports, released March 15, 2013.

Janet Dedrick is a strategic consultant with the Equifax Analytical Center of Excellence. Janet covers US consumer credit trends reporting and analysis in addition to supporting Equifax client analytical initiatives. Prior to Equifax, Janet worked in the financial services industry in various roles, including risk management and banking regulatory policy areas. Janet holds an MBA from the University of Chicago.

There’s no clear-cut rule for choosing which way to pay, but there are a few factors you may want to consider when reaching for your wallet.

Credit cards

When you use and pay down a credit card, you’re helping build your credit file. And unlike a debit card, a credit card is not linked directly to your bank account, which means you’re lessening the risk of someone getting access to and draining your funds.

When using most credit cards, money is not taken immediately out of your account. That money is due by the end of the billing cycle, which ranges from 25 to 45 days. You will be billed for all unpaid charges plus interest. Because purchases aren’t automatically deducted, you may have a better chance of contesting any fraudulent charges that may be made to your credit card account.

If you are concerned with establishing credit, you may want to consider a secured credit card (one where you post a security deposit with the issuing bank, usually at least equal to your credit line). The National Foundation for Credit Counseling offers some other good ideas on how to establish credit.

Another perk to credit cards is the rewards they offer. More often than not, credit cards offer better rewards than debit cards, and some can be used to buy products or pay back some of your credit card balance. Be careful, though—in some cases, these rewards may lead you to spend more than you really can afford.

It’s also easy to get carried away with credit cards. Using credit cards makes some people feel like they are not spending any money, which can lead to overspending. Do not focus on rewards or rely on the convenience of credit cards if these perks are causing you to overspend.

Debit cards

If you can’t stand the thought of paying interest, debit cards are a good option to consider because the money is taken directly out of your bank account. In addition to avoiding interest, you can also avoid hefty charges associated with late payments.

And unlike having many credit cards, which can potentially negatively impact your credit score, having many debit cards will not hurt your score. With that said, debit cards will not help you build your credit, either—a factor to consider when deciding which form of payment to use.

While carrying a debit card is safer than walking around with a pocket full of cash, you still run the risk of fraudulent use, either in the form of ATM withdrawals or purchases. Those activities will affect your account immediately, and you can easily remain unaware long enough to experience a significant loss. This is especially true in the case of identity theft, where thieves use your stolen information to access your accounts and, sometimes, create new ones.

Most debit cards do provide a little protection from fraud, but the coverage depends upon which bank you use, in which state you live, and how quickly you report the loss of the card, among other things. There are some banks that offer a zero liability policy for fraudulent use, but there is often a yearly fee for this benefit, and sometimes there are stipulations of which you need to be aware. Be sure to check with your bank to discuss how it handles identity theft and fraud issues.

Also note that if you overdraw your debit account—you make a purchase with a zero balance in the account—you can be hit with substantial fees. That is extremely important to remember if you have automatic payments deducted from your account or you are not keeping track of your spending. To prevent overspending, you may want to record each of your debit card transactions just as you would a payment using a check.

When making your choice, keep in mind that debit and credit cards are tools that, if not used responsibly, can easily damage your financial health. Be thoughtful and choose your method of payment wisely.

Steve Repak, CFP®, is a professional speaker and the author of Dollars & Uncommon Sense: Basic Training for Your Money.

To continue to provide top-quality resources for consumers, Equifax is launching IdentityProtection.com. The site will feature educational resources and tools, as well as stories from victims of child identity theft, medical identity theft, and tax identity theft.

With this website, consumers will learn how to help protect their identities and the identities of their children with helpful information such as precautions to take when filing their taxes, signing their kids up for after-school activities, filling out medical forms, and creating passwords online.

“Identity theft is an increasingly pervasive problem, particularly in today’s digital economy,” said Trey Loughran, president of the Personal Solutions unit at Equifax. “This new website will be a rich resource for people who want not only to educate themselves about the problem but also to take steps to help protect themselves and their families. Consumers who are armed with useful knowledge and tools can be a powerful deterrent to the rapid growth of this ‘invisible’ crime.”

Visit IdentityProtection.com to learn more about this new resource.

Identity Theft Protection and Warning Signs
Keep yourself safe while shopping online
Eight steps to prevent taxidentity theft
Monitor your credit report for identity theft red flags
Protect your family from identity theft
6 ways to prevent identity theft
Avoid identity theft: Get in the habit of protecting your personal information

Causes of Identity Theft
Top causes of identity theft? Not the Internet—yet
Becoming a victim of identity theft: How it happens

Tools for Preventing Identity Theft
Resources for victims of fraud and identity theft
New tool to help Consumers protect online information
Fraud alert versus security freeze
Identity theft: Can fraud alert protect you?

Children and Identity Theft
Child identity theft: The invisible crime
Protect your family from identity theft
Child identity theft and tax fraud: What you need to know
Identity thieves use children’s information to commit tax fraud
Fighting child identity theft with education and awareness
What to do if your child is a victim of identity theft
Protecting the innocent: The basics of child identity theft

Help for Victims of Identity Theft
What to do if you’re the victim of identity theft
Identity theft: What to do if your wallet is lost or stolen
Identity theft: What to do if you’re a victim
Identity theft: Dealing with a data breach

Q: Why does a lender see a different credit score than what’s on my Equifax credit report?

A: A lender may be seeing a different credit score than what you will find on your Equifax credit report because another credit score model is being used.

For example, Equifax calculates your Equifax Credit Score using information from all three nationwide credit reporting agencies. Other companies may calculate your score using different metrics. While some lenders use blended scores from the three credit reporting agencies, others apply industry-weighted scores.

Keep in mind that your credit score isn’t static and could change every day as credit grantors, collection agencies, and public records report data.

If your lender calculates a score that is very different from your Equifax Credit Score, consider showing your lender a recent copy of the score Equifax has reported. Then you can compare the inconsistencies and determine if any information is incorrect.

Q: Why is my credit score different among the three nationwide credit reporting agencies?

A: If you are pulling your credit report and score from each of the three credit reporting agencies and find that your scores aren’t exactly the same, it’s not a cause for alarm. There are multiple reasons why your credit score may differ.

If you access scores from all of the agencies at the same time, a score difference is normally due to the credit file data at each of the agencies. Not all creditors report to all three agencies, so some credit lines might not appear on all three reports.

Your credit report and score can also change daily, depending on your credit activity level. This could be the result of a balance increase or decrease, a new inquiry, or a new credit line.

When comparing your credit report from the three agencies, make sure that the personal information on each is correct and that all of the listed accounts and balances belong to you. Any incorrect information could alter your score.

Q: How do I dispute an error in my credit report?

A: It’s a smart idea to periodically check on your credit report because any erroneous information could affect your credit score. Remember that you are entitled to one free credit report every year from each of the three credit reporting agencies through annualcreditreport.com. You can also request your credit score for a nominal fee when you access your credit report.

If you have been a victim of identity theft or if a creditor has mistakenly reported your account as delinquent, it could affect your credit score. If the incorrect information causes your credit score to drop, it could be difficult for you to get credit at a better rate.

If you find inaccurate information in your credit file, directly contact the credit reporting agency posting the error and file a free dispute. At Equifax, you can file your dispute by Internet, phone, or mail. You will find step-by-step instructions for how to start an investigation into your credit report here.

If you have spotted erroneous information in your credit report from one of the three nationwide credit reporting agencies, consider ordering your credit file from the other two in order to check for the same mistake. You can find both Experian and TransUnion online.

The credit reporting agencies are mandated to investigate all disputes within 35 to 45 days after you have submitted your complaint. At this time, the credit reporting agency will contact you with your outcome—by mail if you submitted by mail or through email updates if you selected that option.

The credit reporting agency can update the status of the disputed information—which could include telling you that the furnisher of the information confirmed that it was reporting correctly—or delete the item altogether. If the agency finds no mistake in your file, the information will remain, but you have the option of adding a statement of explanation.

When you correct an error with one credit reporting agency, the two other agencies should also receive the updated information. To make sure that your information is quickly corrected across agencies, though, you should dispute the error directly with each one.

Over the next few weeks, we’ll be answering some of your most frequently asked credit questions. We hope that this discussion will increase your understanding of how the credit reporting process works.

Q: How long will a late payment remain on my credit report?

A: Consumers are often concerned about how late payments and other negative information, like bankruptcies and judgments, will impact their credit history and score.

In general, negative information that is more than seven years old from the date of last activity will be removed from your credit report. For bankruptcies, though, the time frame is normally 10 years from the date of last activity.

The on-time payment of your credit card bills or your mortgage, known as positive information, can remain on your credit history forever.

Remember that the information in your credit report does not come from the credit reporting agencies. Instead, credit reporting agencies compile the information that lenders, collection agencies, and public records report to them, and then they record it in your credit report.

If you’re concerned about how long information will remain on your credit history, it might be a good time to review your credit report. When you review your report, confirm that all of your information is correct and accurately reflects your financial history.

Check out a complete breakdown of how long credit accounts, collection accounts, public records, inquiries, and bankruptcy remain in your credit history.

Q: How are early payments factored into my credit score?

A: Early payments are factored into your score just like on-time payments. They are considered positive information on your credit report.

Learn more about how your credit score is calculated.

Updated May 7, 2013: IdentityProtection.com, a new website powered by Equifax, takes an in-depth look at each of the top 10 states for identity theft, examining state and metro area statistics, examples of widespread fraud, potential reasons residents of these states are at risk and local efforts to curb identity theft.

Trey Loughran, president of the Personal Solutions division at Equifax, said education is the key to helping consumers understand their risk and protect their identities. “Consumers can reduce the risk to themselves and their families by being vigilant and proactive to safeguard their personal information,” he said. “By analyzing the states and cities that have been hardest hit by identity theft, we can better understand the crime and help consumers protect themselves.”

Learn more about the Top 10 States for Identity Theft—and how you can protect yourself—by visiting IdentityProtection.com.

You might have seen recent news about data breaches and identity theft, and one of Hollywood’s latest comedy flicks is centered around this fast-growing crime. But the buzz surrounding identity theft isn’t the result of media hype or Hollywood fiction.

The Federal Trade Commission (FTC) received a record two million consumer complaints in 2012; identity theft accounted for 18 percent of all complaints, up from 15 percent in 2011.

According to the FTC’s 2012 annual report of complaints, identity theft was the number one complaint category for the 13th consecutive year, with 369,132 complaints.

Government documents or benefits fraud was the most common type of identity theft reported, representing 46 percent of all identity theft complaints, with a 27 percent increase from 2010. Tax- or wage-related fraud was the most common complaint within this category, reported by more than 43 percent of identity theft victims last year.

“The IRS is really where identity theft is making a big hit,” says Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association.

Credit card identity theft, however, has trended downward over the last few years, and out of 30 consumer complaint categories, complaints related to credit cards or credit bureaus rank at 10 and 19, respectively.

“I think lenders are making better use of fraud-prevention tools,” Magnuson says. “I think the industry on the credit card side has done a pretty good job of educating consumers on identity theft and ways to prevent it.”

Magnuson says direct consumer products offered by the three nationwide credit reporting agencies could have also helped to reduce credit card fraud by allowing individuals to more effectively monitor their credit reports.

More than one million of the FTC’s 2012 complaints, or 52 percent, were related to fraud. This reportedly cost the complainants more than $1.4 billion total. The median sum paid by fraud victims was $535.

Of the fraud victims who indicated how they were initially contacted, the majority said they were reached by either email (38 percent) or phone (34 percent). Twelve percent were contacted on the Internet, and 9 percent were contacted by mail.

Florida topped the list of states with the highest per capita rate of reported identity theft complaints last year, followed by Georgia and California. Florida and Georgia are also the states with the highest per capita rate of reported fraud and other types of complaints, with Maryland in third.

If you want to submit a consumer complaint to the FTC, you can do so online or by phone at 1-877-382-4357.

1. I pay my bills on time, so I don’t need to check my credit report.

Many people have a general understanding of how to behave responsibly with money. Earn more than you spend, pay your bills on time and be careful about taking on debt. But too often people think this excuses them from checking their credit report. They then check their credit report right before making a major purchase, such as a car or a house. What they find sometimes is shocking: They don’t have much credit or find a new credit card account they had not applied for (a potential ID theft issue). . Checking your credit regularly may help you avoid these surprises.

Tip: Did you know that you can access one credit report a year for free from each of the three credit reporting agencies? Go to annualcreditreport.com to pull your free report. You can also order your credit score for a nominal fee.

2. If I pay off a debt, any associated missed payments can be removed as well.

While it is generally a good idea to pay down debt, doing so doesn’t automatically erase any missed payments or delinquencies from your credit file. Missed and late payments are generally removed 7 years from the date of last activity or the date the missed payment was reported by the creditor.

3. I need to carry a balance on my credit cards or shut them down.

While you do want positive account activity, such as paying a credit card bill on time, there’s no need to carry a balance. Simply paying off a small purchase every month (or every few months) will typically trigger the credit company to report that behavior.

4. Credit bureaus are responsible for approving or denying credit.

Credit reporting bureaus do not approve or deny you credit and don’t make any credit recommendations to lenders. The lenders decide, based on their own criteria, to issue or deny credit to you based on your credit report and score, as well as plenty of other factors based on information that you provide to the lender.

5. I don’t have—and have never had—any debt or credit cards, so my credit is fine.

If you do not have any revolving credit cards (department store credit), installment loans (car loans, student loans) or a mortgage, then you probably do not have a credit file. Without a credit history, it is harder for creditors to determine your creditworthiness. You should consider whether it may help to establish credit if you intend to borrow money in the future. Continuing good habits like paying off your debt in a timely manner will help build your positive credit history.

Not including mortgages, loan originations increased from $659 billion in 2011 to $750 billion in 2012, according to a recent Equifax Credit Trends report. However, loan originations are still down from their pre-recession peak in 2006 by more than $400 billion. These dollar amounts highlight the idea that we are on the road to recovery—but that there is yet more road to travel.

There are many explanations for this—fewer people were taking out home loans because they lost equity or were underwater in their homes, more people put off purchasing new vehicles because they were worried about the economy, and so on—but the drop in loan originations generally is tied to economic factors. With the economy diving into recession, many people suddenly found themselves unemployed or income-insecure. They were worried they would lose their jobs, or they were facing furloughs or cutbacks in both hours and benefits.

Since the recession, which lasted about from December 2007 through June 2009, lending has increased, starting in 2010. Post-recession, auto loans have increased the most, but credit cards have also seen gains over the past year.

For the housing market, loan origination is still quite low. It’s growing, but at a very slow pace, largely due to the tough standards banks and other lenders have instituted since the recession took hold.

Many of the causes behind the recession, particularly in the housing sector (which constitutes about three-fourths of consumer debt), involved people taking on more debt than they could reasonably afford. As a result, lenders got strict about to whom they would lend—a trend that likely will not change in the near future, regardless of what kind of economic recovery we see.

Still, first mortgage originations have been increasing, thanks in part to people hoping to take advantage of low interest rates. By mid-2012, about 4.25 million first-mortgage starts were on the books, compared to about 2.5 million at the same time in 2011.

The strict underwriting standards are affecting who qualifies for those loans: About 80 percent of recent mortgage originations are comprised of prime risk consumers—those who carry little lending risk and therefore have credit scores of at least 700. By comparison, in 2006, only about half of first mortgages were taken out by those with credit scores above 700.

2012 was also the first year that home equity revolving lines increased, tracking alongside reports that home prices have increased over the last year. While this is good news on the home market front, it’s worth pointing out that the $65.5 billion in loans taken out in 2012 is a mere fraction of the $295.2 billion taken out in 2006.
Despite the increases in the number of mortgages, the amount of mortgage debt Americans are carrying as a whole has steadily decreased since its peak near the end of 2008, when Americans had $9.8 trillion in mortgage and home equity debt. That number is down by 14 percent to $8.4 trillion, due largely to foreclosures and in part to Americans paying down mortgage debt at a faster pace than they are taking it out.

Consumer debt, which does not include mortgage debt, has actually seen the opposite trend. It has been trending upward since 2010, reaching $2.51 trillion at the end of December 2012 (still down from the $2.57 trillion high in 2008).

It’s clear that consumers have been more willing to borrow money recently, but the mortgage market still lags behind the rest of the country’s recovery. Lenders are also more willing to offer loans, but they continue to have tough standards when it comes to mortgages.

Credit reporting agencies have a very simple but challenging goal with regard to accuracy of consumer credit files: we want perfection. It is important that our data is accurate, so that lenders can make a more accurate assessment of consumer risk.

The Consumer Financial Protection Bureau (CFPB) looked at the issue of credit accuracy last December and reported that between 1.3% and 3.9% of consumers disputed information in their credit report. Another recent study by the Policy and Economic Research Council (PERC) concluded that only 0.5 percent found an error that would cause the consumer to move to a higher risk category and possibly pay a higher interest rate. Even the recently released Federal Trade Commission study – which used “coaches” to help consumers find errors — said that only 2.2 percent of reports had an error which potentially could have a meaningful impact on the consumer’s score.

Studies show that when there is an error and consumers use the dispute process, they are satisfied with the outcome 95 percent of the time. We resolve three out of four disputes within 14 days – less than half the time required by law. And we’re instituting a new process that will reduce the dispute processing time dramatically – in some instances by up to 50 percent.

Incorrect data makes its way into our database for many reasons. When a consumer disputes a report, the first thing we do is to ask whoever furnished the data in the first place to verify it. In 2012, data furnishers responded to our verification requests in 8.5 days on average. (Legally they have 30 days to respond.) To speed this up even more, we’re upgrading our processing system to let us transmit the disputed consumer document images to the data furnishers rather than the current method of forwarding the dispute request, which triggers a process with the data furnisher to look up the necessary documents.

Over the past year, about 60 percent of these reinvestigated disputes were closed when the data furnisher verified the information in question was accurate. In 40 percent of the cases, Equifax modified or deleted data in a consumer’s credit file. In 36 percent data was modified or deleted as a result of the reinvestigation. The remaining four percent of modifications or deletions were a result of the data furnishers failing to respond in the legally mandated response window.

Our goal is perfection – we want to ensure that every consumer’s credit file is accurate. For that to happen, all parties – data furnishers, consumers, government agencies and the CRAs – have a responsibility and need to work together.