Wednesday, November 16, 2005

How To Save Money and Ruin Your Credit Rating In One Easy Step

The Pittsburgh Post-Gazette runs consumer affairs columns by two writers, Yvonne Zanos (who assists readers with "consumer issues, products and service troubles") and Lawrence Walsh (an expert at "sorting through bureaucratic mixups and tangles"). In recent weeks, I have come to believe that these features are the worthiest reads in the PG simply for the practicality of their application in everyday life.

This morning, Mr. Walsh tells us how to get assistance paying our home heating bills via a program called LIHEAP. I have considered applying for this before, but never did, even though I meet the eligibility requirements. (Two of my children could disappear as if they never existed, and I'd still be eligible.) For one thing, it is a federally funded program, and I abhor the thought of receiving taxpayer money for my own private use. It's not the government's responsibility to pay my bills; it's mine. And I'm not exactly planning on staying low-income forever, though my prospects for advancement are somewhat limited at this stage in my career.

There are also potential consequences of officially admitting that you might be having trouble paying your bills. But what?

Well, just last week Ms. Zanos took a question from a reader who took advantage of her (and my) electric utility's Customer Assistance Program. It turns out that the electric company reported this fact to the credit bureau, but the customer does not learn this fascinating tidbit of information until he/she receives the acceptance letter. Who was taking advantage of whom, then?

I'm not exactly in the market for another credit card, or a new car, or a new house right now. But I did refinance both my home mortgage and my auto loan earlier this year in order to cut down on monthly costs, as well as getting a new credit card with low interest and low credit limit that helps pay down the mortgage. Who knows when I might start getting desperate again?

One thing's for certain: I'll never try to get any kind of assistance from my electric company. I'll sleep better at night without all that light in the house anyway. If I get desperate enough, though, I might go for the gas company assistance program. If I do, I'll follow Yvonne Zanos's advice and check out the company's reporting practices first.

Supposing they don't report you to the credit bureau. What if they change this policy at a later date? Somehow it seems like you're screwed, no matter what.

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