Clues That Your Credit Score Is Tanking

Everyone is entitled to a free copy of their credit report annually, so it's easy to keep track of whether you have any black marks on your credit that may affect your credit score. You can also pay the various credit bureaus to get a copy of your credit score. It's especially important to do this if you start encountering clues that your score is tanking.

Loan Denial

Say you want to buy a house or a car. You've got a good job, plenty of income and the necessary down payment. If you still get denied for a loan, Bankrate.com says that a low credit score is the likely reason for a loan denial. Even though you may fit all other criteria for obtaining the loan, a low credit score suggests to the lender that you are a high credit risk and more likely to default on the loan payments. If you are denied a loan, be sure to ask what the reason for the decision was.

High Interest Rate

If you are approved for that mortgage or car loan but at an interest rate that is much higher than the going rate, it's a good clue that your credit score may be low. Again, risk plays a big role. If a lender considers you a higher risk, it will charge a higher interest rate to make up for that risk. Experian, one of the three major credit bureaus, says that a credit score above 700 is considered good. Generally, the lower your score, the higher the interest rate you will pay.

Premium Increases

If your credit card company or insurer raises your rates absent any other reason, such as a damage claim or late payment, it may be a sign that your credit score has tanked. This is most likely to happen during the renewal process, but an insurer or credit card company may also raise your rates in the middle of your term if it finds out that your credit score has fallen.

Considerations

You should always check your credit report and score before applying for a mortgage or car loan to make sure there aren't any surprises. If there are mistakes on your credit report, you should dispute them in writing as soon as possible and provide any evidence you have that the entry is in error. If you have legitimate negative entries on your credit report, act quickly to reconcile them. For example, get current on any delinquent accounts and pay down high credit card balances if possible.

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What Is Listed on a Credit Report?

A consumer credit report contains vital information that lenders use to make decisions whenever you apply to borrow from a creditor.

Personal Information

A credit report will show your current address and any previous addresses on record. If there is a name change, the previous name will also appear. Social Security number and date of birth are recorded here as well.

Employer

Current and past employers' names, cities and states appear if the data has been reported. Also, the position held at the company will often be shown.

Public Records

Any legal issues are disclosed. Bankruptcies, foreclosures, lawsuits or charge-offs will be listed.

Alerts or Warnings

Any type of alerts will be listed in this section. This includes problems with the Social Security number or name or to warn the lender of any fraud possibilities.

Lender Information

A 24-month pay history will be displayed. Codes are used to show if the applicant pays on time, 30 days, 60 days or 90 days late.

Inquiries

Whenever a lender views your credit report, an inquiry will be notated. This lets creditors know how many lenders are viewing your credit.

Consumer Statement

You have the right to include a statement in your credit report. The statement may be used to explain reasons for credit problems or any issue you might want the lender to be aware of.

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When Does Your Credit Score Update After an Item Is Deleted?

Every time you apply for credit, the lender will run a credit check with one or more credit bureaus. The bureaus will use the information on your credit report to calculate your credit score. A new score is calculated for each inquiry. It can change from day to day. Once an item is deleted from your credit history, it no longer factors into the calculation.

Credit Score Updates

A credit score is a summary of your borrowing and repayment history from the past seven years. When the history changes, so does the credit score. The credit bureau calculates credit scores at the request of lenders, who want to check the creditworthiness of potential borrowers. Once an item is deleted from your credit report, it no longer figures into the calculation. Thus, the next time a lender requests your credit score, it will not include the deleted information. This happens automatically. You do not need to do anything yourself

Credit Reporting

Lenders report information to credit bureaus every 30 to 60 days. If you've opened a new account, it should appear on your credit report at the start of the following month. If you've missed a payment, this, too, will be on the report. If it's a one-off mistake, you may be able to prevent the information by appealing to the lender. Call them up and ask if they could remove it from your record, in view of your otherwise-outstanding repayment history. Many lenders will agree. Do this before they've had a chance to report it to the credit bureaus. After that, it becomes much more difficult.

Removing Errors From Credit Reports

If you've spotted a mistake on your credit report, you can have it removed by filing a claim directly with the credit bureau. Go to the bureau's website and fill in the necessary form. You may need to provide evidence of your claim, such as a canceled check. The bureau will investigate and make a ruling within 30 days. If the bureau rules in your favor, it will automatically fix the mistake on the report. This can improve your credit score instantaneously.

Removing Accurate Information From Credit Reports

It's almost impossible to remove negative information from your credit report if it is correct. You may be able to negotiate with a lender or a collection agency, but these negotiations are rarely successful. It's not in their interest to remove the information. However, even if you cannot get it removed, it will not ruin your credit score forever. Most information expires within seven years and is automatically erased. Bankruptcies disappear after 10 years. As time goes on, the negative information will matter less and less, as long as you continue to make payments on time and do not accrue too much new debt.

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What Happens After a Charge-Off?

Paying all of your debts on time is the best thing you can do to maintain a clean credit report and high credit score. Failing to pay a debt will lead to late fees, account closures and eventually charge-offs listed on your credit report. Once you have a charge-off on your report, you will face negative financial repercussions such as lower scores and difficulty qualifying for loans and credit cards.

Definition of a Charge-Off

When you fail to pay a debt, such as a credit card, the creditor will list your account as a charge-off. Typically, this occurs 180 days after your last payment, according to Bankrate.com. By listing your account as a charge-off, the creditor is stating he no longer considers your debt an asset and has closed your account. The creditor will inform the three major credit bureaus of the charge-off status on the account and may or may not contact you directly.

Financial Obligations

Listing your account as a charge-off does not release you from your payment obligations, and you will still owe the debt to the creditor. In most cases, the original creditor will sell your account to a collection agency. However, some creditors use their own in-house collection agencies. The collection agency or department will try to contact you to pay the debt. In many instances either the original creditor's in-house collection department, or the collection agency, will be willing to settle for a portion of the amount due.

Effect on Credit Scores

Having a charge-off reported on your credit report will have a negative impact on your credit score. If the creditor sells your account to a collection agency, the collection agency will open a file on your credit report as well, which will cause your credit score to drop even further. The charge-off will remain on your credit report for seven years plus 180 days from the date of nonpayment, according to Bankrate.com.

Effect on Personal Finances

Having a charge-off may make it difficult for you to obtain new credit cards, receive credit limit increases or qualify for loans. Allowing your charge-off to remain unpaid may prevent you from getting a mortgage. Many mortgage companies require you to settle your open charge-offs with the original creditor or the collection agency before they will consider your application for a home loan.

Tips

While paying a charge-off account will not remove it from your credit report, it may help you qualify for loans in the future. Before paying any settlement amount with a collection agency or the original creditor, ensure that the company will update the charge-off to read "paid charge-off" on your credit report.

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Why Does My Installment Loan Not Show Up on One Credit Report?

Three agencies, Experian, Equifax and TransUnion, control the credit records of 210 million Americans. But as many as 37 percent of these have some false information, according to Smart Money. The bureaus are separate companies, so they do not have all of the same information. An incomplete credit report could cost you points when you have an installment account in good standing, but not listed by one of the credit bureaus.

Identification

The credit rating agencies only report information when a lender sends it to them. Lenders do not necessarily report to all three agencies, because it costs money for the privilege of sharing data with the bureaus. Although most lenders report to the "big three," some creditors report to only one or no credit agencies.

A Mistake

It is possible that the lender simply forgot to update your account with one of the credit bureaus. You could most likely correct this error by calling the creditor and asking which agencies he reports to and then noting the missing information on one report. If the lender corrects the error, the information will not appear on your report immediately. It can take weeks for the credit agencies to update a report.

Time Frame

You might have to wait for the new data show on your report. Although having the most accurate and current data is critical for consumer credit reporting, updating the 210 million records usually only happens quarterly because of technical limitations. Credit scores, however, are fluid, and data can change on them at any time.

Tip

Consumers should ask their lenders if they report to all three credit bureaus before taking out loans, if they want to maximize the benefit to their scores. You are entitled to one free credit report from each agency annually, so you can spread your requests over the year to monitor your credit at no cost.

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How to Fix Destroyed Credit

Banks, lenders and some insurance companies use credit scores and credit history when reviewing applications. The lower your score, the harder it becomes to acquiring financing and low insurance premiums. But regardless of what happened in the past, you can fix a heavily damaged credit history.

Instructions

1

Review credit damage. Order a personal credit report from each of the three reporting agencies via Annual Credit Report. This site provides free reports, and examining your personal credit history helps you determine areas that need improvement.

2

Dispute incorrect information. Even with a legitimate bad credit history, some entries on your credit file may appear in error. Circle inaccuracies on your report and then notify creditors or lenders of their mistakes. Request a quick update of your file to help improve your credit history.

3

Pay bills on time. Reverse a terrible payment history and improve your FICO credit score. Send payments by the due date and your credit health will improve gradually. Consistently good payment habits results in creditors and lenders reporting that accounts are "paid as agreed."

4

Pay down maxed out credit cards. Owing several thousands of dollars, exceeding credit limits and maxing out credit cards can devastate your credit. Pay off these balance to recover, or at least pay down balances to below 30 percent of the credit limit, according to MSN Money.

5

Start over and practice better credit habits. A bankruptcy is a chance to start over and rebuild your credit. Make wiser choice after acquiring a new credit account following a bankruptcy. Open a savings account with a bank and get a secured credit card. Pay off the card in full each month and make payments several days before the due date to avoid a late payment.

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How to Reduce Credit Card Interest & Keep Your Credit Rating

When you have several credit cards with high interest rates, staying on top of monthly payments can sometimes prove difficult. If you do not make payments on time you hurt your credit score. Furthermore, entering into a debt settlement arrangement will also have a damaging impact on your credit score. However, there are steps you can take to reduce the amount spent on credit card interest payments without hurting your credit score.

Instructions

1

Review your credit card statements to determine the interest rate you are paying on each card and the grace period for each card. If possible, pay off any new charges before the monthly grace period ends as doing so will prevent the card company from assessing interest on the charges. If you have any surplus funds after making your minimum payments, make an extra payment towards the card with the highest interest rate.

2

Contact each of your credit card companies and request a rate reduction. Credit card companies do not have to lower your rate upon request but some may do so in order to prevent you from taking your account elsewhere. Stress your good payment history and length of account history as reasons why the company should accommodate you.

3

Shop around for promotions on balance transfers. Many credit card issuers offer low rates or even zero percent interest on balance transfers. You can continue to pay what you are paying on your cards now, your entire payment goes towards principal during the zero balance promotional period which means you can pay your cards down faster.

4

Pay your cards off with funds from another source. If you have cards with very high interest rates you can take out a loan against your employer's 401k plan and use the loan proceeds to payoff your cards. You pay interest to yourself when you repay your 401k loan and that interest helps your retirement account to grow.

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Do Garnishments Show on Your Credit?

Even though garnishment orders do not show up on your credit report, they can still prevent you from acquiring a loan. Also, the precursor to a wage garnishment usually does significant damage to your credit rating. You probably can avoid a wage garnishment by negotiating with your lender before a long default forces the creditor to take you to court.

Identification

Garnishments do not appear on a credit report, according to Jeanine Skowronski of the Main Street website. As of 2011, the credit reporting bureaus have access to garnishment orders but choose not to report them. What can affect your score is a civil judgment leading to a garnishment. Court judgments affect your credit rating by as many as -- and possibly more than -- 100 points. It has the similar effect of any other delinquent account, such as a collection account, charge-off or tax lien, in how much it lowers your overall credit score.

Debt-to-Income Ratio

Even though a garnishment order does not go on your credit report, you still have to report it on a loan application as a debt obligation. Lenders give almost as much weight to your credit rating as your ratio of monthly debt payments to monthly income. The ideal debt-to-income ratio varies by lender, but lenders usually won't lend to any application with a ratio higher than 35 percent to 50 percent, according to Erin Peterson of Bankrate.com. Omitting the wage garnishment could constitute credit fraud.

Considerations

You probably have several missed payments on your record and possibly other delinquent debts if you let a debt go into default so long that the creditor files a lawsuit. The garnishment can take up to 25 percent of your paycheck, which may mean you do not have enough money to pay your other debt obligations and cover other life necessities.

Tip

You can exclude some income from garnishment, such as Social Security, and your state may offer additional garnishment protection. However, you should try to settle the debt with the creditor. Creditors often negotiate on debts because filing garnishment orders can cost hundreds or thousands of dollars in legal fees. At the very least, you can offer to pay the debt in installments to avoid a civil judgment on your record.

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How to Remove Reposession from Credit Report

A repossession record is among negative information that can be reflected in a credit report maintained by Equifax, Experian or TransUnion. The federal Fair Credit Reporting Act (FCRA) requires consumer reporting agencies and the company that reported the repossession to correct information that is inaccurate or otherwise in error.

Instructions

Repossession & Your Credit Report

1

Ascertain if the repossession record on your credit report can be legally removed. Credit.com notes that vehicle and property repossession records stay on your report for seven years, after which they should drop off. An erroneous repossession record may show up on your credit report if you were the victim of identity theft, in which a con artist acquired your personal information to purchase property or a vehicle that was repossessed.

2

If the repossession record has expired or suggests that you've been the victim of identity theft, contact the consumer reporting agency or agencies in writing to dispute the record, advises the Federal Trade Commission. Your letter should contain your name and contact information and why you believe the repossession record is in error. The FTC urges you to provide copies of supporting documentation if you have them. Send the correspondence by certified mail, return receipt requested, to ensure that your dispute is received. Contact information for the three consumer reporting agencies is:

Equifax
http://www.equifax.com
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111

Experian
http://www.experian.com
P.O. Box 2104
Allen, TX 75013-0949
(888) 397-3742

TransUnion
http://www.transunion.com
P.O. Box 1000
Chester, PA 19022
(800) 916-8800

3

Give the consumer reporting agency at least 30 days to look into your dispute and get back with you in writing. If the repossession record has expired or is otherwise in error, it will be removed from your report. The consumer reporting agency must send you a copy of your revised credit report if the repossession is removed.

4

If you're unhappy with the resolution of the consumer reporting agency's findings, you are permitted by law to send the agency a brief statement (100 words or less) clarifying your case. This will be maintained in your credit files.

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Does an Unactivated Credit Card Hurt a Credit Score?

Closing a credit card account usually hurts your credit score, because it increases the percentage of your total credit you are using compared with the total credit limit of your other cards. Unactivated credit cards can hurt your credit score too, even if you cancel the card. You cannot know if a credit card impacts your credit score until you check your report.

Impact on Credit Score

An unactivated credit card will not hurt your score unless the lender reports it to the credit bureaus. If you cancel the card before the lender reports it, the account will not affect your score. Close the account as soon as you open it and you could damage your score because a new account will lower the average age of your credit history, which counts for 15 percent of your credit score.

Considerations

Whether or not you cancel a credit card before a lender can report it to the credit bureaus, the act of applying for credit will damage your score. Each time a creditor has to perform a hard pull on your credit, because you asked for credit, your score takes about a five-point hit.

Preapproved Offers

Preapproved offers -- credit cards you receive in the mail that you did not apply for -- do not affect your credit not matter how long you let them sit. Creditors who send preapproved offers cannot run a hard pull on your report. If you decide to accept a preapproved card, the account will start counting against your score, but it also could see a boost if you make payments on time.

Tip

The only way to truly know if an unactivated card counts against your score is to run a credit check on yourself from all three major credit rating companies. You receive one free report from each agency annually from AnnualCreditReport. If an unactivated card shows up on your credit report, you may want to activate it and pay off any balances every month to raise your credit score. Closed accounts stay on your record for 10 years regardless of standing.

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Can Paying Off Closed Accounts Raise My Credit Score?

Delinquent accounts negatively affect your credit score. Since a poor credit score impacts your ability to rent an apartment or buy a house or car, you may want to repay these accounts to help repair your credit. However, paying off closed accounts does not, by itself, repair your credit. Paying current bills on time and using credit responsibly affects your credit score more than paying off old accounts.

Collections Accounts

When you pay off a collections account, it will not automatically drop off your credit history. Collection accounts remain on your credit history for seven years after a bill is sent to collections. However, if you pay off an account in collections, you can ask the creditor to list the balance on the closed account as zero, which will help improve your credit score even though the collections account remains on the list.

The Longer Your Track Record, The Better

Think twice before closing old accounts. If you completely close accounts, they will not drop off your credit history. However, the average age of your open accounts affects your credit score more than the number of active accounts. In addition, paying off credit accounts for the purpose of closing them affects your credit history less than making on-time payments to open accounts.

On-Time Payments

Paying bills on time raises your credit score more than any other activity, including paying off collections accounts. A pattern of on-time payments over the past couple of years shows that your bad habits are in your past and that you now use credit responsibly. If you have old debts, paying them off can help your credit score, but you should focus on maintaining good habits to repair your credit.

Rebuilding Credit

Keep one or two credit accounts open and use them responsibly to demonstrate that you know how to use credit. If you owe anything on these accounts, pay them off before using any more credit. Ideally, you should keep your credit balances at less than 20 to 50 percent of your credit limit, as having too high of a debt-to-credit limit ratio can negatively affect your credit score. If you qualify for a limit raise, obtaining one can also help fix your debt-to-credit limit ratio.

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How to Repair a Credit Report Online

Errors on your credit report require your attention as they may lower your score and reflect poorly on you credit history. You will have to contact the credit reporting agency that made the error to get the error corrected. Each of the three credit reporting agencies, Experian, Equifax and TransUnion, have specific procedures to handle disputes. You need to know these procedures to get the error corrected.

Instructions

1

Find out which credit reporting agency the incorrect credit report came from. You may have requested your credit report from the company specifically, or you may have requested a free annual report from the website Annualcreditreport.com. Credit reports from the three credit reporting companies may differ. The error may only appear on one report, or it may appear on all three, so it is best to check them all.

2

Learn the credit reporting agency's policy on disputing errors. You want to make sure you follow the dispute procedure properly so the issue is rectified quickly. Each agency publishes their policy online. To file your dispute, you will need to have a recent copy of your report. Take note of the 10 digit number at the top of the report.

3

Fill out the online dispute form on the reporting agency's website. You must provide information including your name, Social Security number and address. If you have documentation that proves the report is in error, have copies on hand to send if needed.

4

Submit your online request. It can take several weeks to hear back from the credit reporting agency and you will have to log-on to their website periodically to check the status of your request. You can request written notification, but usually you will hear back faster if you continue to check online.

5

Follow up with the dispute if you do not hear back. Once your dispute is rectified, you should receive a new copy of your corrected credit report. Even after your report has been corrected, continue to check your credit report annually. New errors can appear at any time, so stay on top of your credit by getting a free copy each year.

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How to a Get Forclosure Out of a Credit Report

A foreclosure does not report on your credit report forever. Like many types of negative credit accounts, a foreclosure may be reported for seven years. After the seven years have passed, you can remove the foreclosure from your credit report by disputing the account with the credit reporting agencies. The reporting agencies check the account data and the foreclosure information with the company that issued it. If the full seven years has passed, the account will be removed from your report.

Instructions

Experian

1

Open Experian's website pertaining to online disputes, in Resources.

2

Use a recent credit report from the past 90 days from Experian, or use the links on this page to request a credit report. You may need to pay for the report. Experian requires you have a recent report in order to dispute any accounts.

3

Click the link "Yes, I have a credit report number." Fill out the form completely, including the credit report number, your name, address, previous addresses within the past two years and Social Security number. Click "Submit."

4

Use the credit account listings on this page to find your foreclosure account. The date the foreclosure opened is listed on this account. If it is older than seven years, click "Dispute this item." Indicate the account is too old to be reporting and click "Submit your dispute."

Transunion

5

Bring up the Transunion dispute center on its website (see Resources).

6

Click "First Time? Click Here" if you are a first-time user of the Transunion website. Log in once you have a username and password.

7

Click "Credit Report" and "Report Inaccuracy" to access the dispute panel. Find your foreclosure in the list of accounts and click "Request investigation." Tell Transunion that the account is too old to remain on your credit report. Click "Submit."

Equifax

8

Go to Equifax's dispute web page (see Resources).

9

Fill out the form, skipping the credit report number if you don't have one. Click "Submit."

10

Answer the personal identity questions on this page to verify your identity. Click "Submit."

11

Choose the option labeled "Start a new dispute." Find your foreclosure listing in the accounts and choose "Dispute this item." Inform Equifax the account is too old to be reported and click "Add dispute."

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How to Raise My Credit Score in 30 Days

Credit scores were developed in the 1950s to estimate the creditworthiness of individuals. The Fair Issac Corporation, otherwise known as FICO, uses consumer credit files to formulate a credit score that will indicate the level of credit risk. Based on that information, financial institutions conclude the interest rate, need for collateral or income verification for an individual application. Credit reporting agencies such as Experian, Equifax and TransUnion collect consumer information to compose credit reports and FICO scores. Situations such as default payments cause scores to drop. In order to raise your score, different ways exist to restore it in a timely fashion.

Instructions

1

Pay off your debts. Search your credit report for delinquent collections, charge-off and bad debts. If any information on your credit report appears to be false, then dispute it with all of the credit reporting agencies. Under the Fair Credit Law, consumers have the right to dispute any item appearing on their file. After 30 days, if no one from the debt collector responds, then the item is removed. But the golden rule of credit is paying your bills on time.

2

Pay down your credit cards. Carry a 20% current balance of your maximum available credit. Add extra payments to the minimum balance due. Continue to use your credit cards for small purchases. Creditors look at spending habits and ability to pay when considering credit increases. Don't open new accounts to increase available credit. Focus on older accounts.

3

Ask a friend or family member to add you to his card. If his low credit balance reflects a solid payment history then ask about being added as a cardholder. Once added, the cardholder's entire history shows up on your credit report with instant points. Consult with the credit card company to determine your eligibility.

4

Inquire about a secured loan. Credit unions and banks extend loans on savings, CD's and other accounts. Originate a small amount and pay it off within the month. But make sure that your financial institution reports the activity to the three major credit reporting agencies.

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How Your Credit Score Affects Your Chances of Getting Into the Army

An individual's financial health is one of the factors taken into consideration if he decides to join the United States Army. Other factors examined include age, health, citizenship status, moral character and family size. Educational background is also considered as are an applicant's scores on the Armed Services Vocational Aptitude Battery exam, commonly known as the ASVAB.

Financial Obligations

A low credit score alone is not enough to bar someone from serving in the United States Army. Poor overall financial health, however, may be. Before joining, people who have poor credit or dependents must undergo a financial health check. Recruits aged 23 and older must also undergo a financial examination. If the Army determines that your military salary will not be high enough to meet your financial obligations you will not be allowed to enlist.

Residency & Citizenship

United States citizens are eligible for Army enlistment. Noncitizens may also enlist in the Army but only if they are legal, permanent residents. Although the Army can enlist those who are already considered citizens and permanent residence, it cannot help anyone enter the United States, obtain citizenship or grant permanent resident status. All citizenship and resident status issues must be dealt with through United States Citizenship and Immigration Services offices. It should be noted that only United States citizens can become officers.

Drugs and Criminal Convictions

All those wishing to join the United States Army must answer a set of questions about drug use in writing before being accepted into the service. These questions essentially ask Army applicants whether or not they currently use or have ever used, sold or possessed marijuana, hemp or narcotics. Applicants with a history of drug use or possession may be disqualified from the Army, but experimenting with marijuana alone is not generally cause for rejection. Recruits will have to pass a drug test. In addition to drug testing, recruits must undergo a criminal background check. Those convicted of aggravated assault, bribery, burglary, draft evasion, extortion, kidnapping, manslaughter, murder, perjury, rape, robbery or of indecent acts with a child under 16 may be barred from service. Crimes committed as a minor, however, may be granted an exception.

Physical Fitness

Army has strict height and weight guidelines for both men and women wishing to enlist. Because muscle is heavier than fat, applicants who exceed the weight requirements may still be eligible for enlistment if they qualify under the Body Mass Index standards instead of the height and weight requirements. Army recruits must also be able to pass a physical fitness test consisting of push-ups, sit-ups and a two-mile run is also administered to Army recruits. Each section of the test is scored. To pass, recruits must score at least 60 points in each section of the test and have a combined total score of at least 180.

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What Is a Soft Pull on a Credit Check?

You've probably heard that inquiries into your credit report are bad for your credit score; however, that isn't true for all inquiries. It's important to arm yourself with knowledge about the differences between soft and hard inquiries to avoid doing negative impact to your credit. Your credit report is an important factor in the types of credit you'll qualify for in the future, so it's vital to keep it as strong as possible.

Soft Inquiry

A "soft pull" or "soft inquiry" is when someone checks your credit report but the check isn't being used because you've applied for something that could potentially put you into further debt. Organizations you already have accounts with, those extended unsolicited credit offers or employers may do a soft inquiry on your credit report. When you check your own credit report, it is also considered a soft inquiry.

Effects

A soft inquiry doesn't have any effect on your credit score, and furthermore, it doesn't have any effect on your credit report either. You're the only one who can see these inquiries on your credit report; they're hidden from everyone else's view. The reason your credit score is impacted by hard inquiries is because of they present the possibility that you'll be taking on more debt, whether it's through a loan, credit card or new rental. Since those organizations doing soft inquiries on your report aren't ones you've applied for new credit with, they don't present that risk and, therefore, don't impact your credit score.

Pulling Your Report

Pulling your own credit report is considered a soft inquiry, and you may do so for free by visiting the Annual Credit Report website. The Federal Trade Commission warns that only the Annual Credit Report website is part of the legally mandated annual credit report program---so-called "free credit score" websites may actually start charging you for monitoring services after a certain period of time. You may check your report with each of the three credit bureaus at once, or you may space them out over the year.

Hard Inquiry

A hard inquiry is one that poses the possibility that you may be taking on a new financial obligation. When you apply for a credit card or loan, for example, the lending institution will review your credit report to determine whether you're responsible and able to take on more debt. Other organizations that may pull hard inquiries are cell phone companies and rental companies or landlords. These are considered hard pulls because you would be taking on the financial obligations of a monthly cell phone bill or the rental price of a new home.

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Can Closed Collection Accounts Hurt My Credit?

A closed collections account is different from any other closed account, at least where your credit report is concerned. Having a closed collections account on your report, rather than a closed account in good standing, may be a red flag to most lenders, who assume that you are irresponsible with credit. However, it's far better to have a closed and paid collections account on your report rather than a closed and unpaid one.

Timeframe

Even when a collections account is closed, it can remain on your credit report for up to seven years from the date the account first went delinquent. There is another time limit involved with open collections accounts, which is called the statute of limitations. This statute, which varies by state, equals the number of years during which a collections agency may attempt to collect your debt in court. If you're wondering whether you should bother to pay off and close a very old collections account, paying it will start a new statute of limitations. However, paying it off will still be better in the long run and appear as a positive factor to future lenders.

Misconceptions

Although common sense would say it does, a collections account doesn't disappear from your credit report after you've paid it off. As long as it is still within the seven-year period from when the account first went to collections, the account will remain on your report. However, this doesn't mean there's no benefit to paying off your collections account. Potential lenders can see in your report whether you owe money on a collections account, and they are more likely to extend you a new line of credit if you've showed responsibility by paying off an old collections account.

Considerations

Another odd factor regarding closed accounts is that can hurt your credit score by closing too many accounts at once. If you've already closed your collections accounts, it may be wise to hold back from closing other accounts, too --- even if you don't use them. Instead, if you have many credit card accounts that you'd like to close, close them one at a time over several months' time. Also, close newer accounts first because a longer history of credit use will keep your score in top shape.

Credit-to-Debt Ratio

Once an account has gone to a collections agency, it will inevitably appear as a negative item on your report, open or closed. However, you can work to improve your credit through other means. About 30 percent of your credit score depends on your credit to debt ratio (the more available credit you have, the better). Because of this, you could actually damage your credit by closing other accounts, such as unused credit cards with high credit limits. In this instance, a collections account will have no bearing on your score. Because there is no available credit in a collections account, keeping it open won't help your credit to debt ratio --- but closing it won't hurt your ratio, either. In fact, paying it off and closing it may actually improve your ratio.

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Can My Poor Credit Ruin My Husband's Security Clearance?

Some people applying for security clearances may have worries that their application will not be approved due to their spouse having poor credit history. While it is certainly not impossible that a spouse's poor credit will affect a security clearance application, it is not automatic. What matters more is whether or not the applicant's credit history is tainted by the spouse.

Secret Security Clearance

The website for the FBI describes the process for two types of security clearances. The first type it mentions is a secret clearance. A secret clearance application typically takes about 45 to 60 days to process. The FBI performs record checks with federal and local law enforcement agencies. The candidate must complete forms SF-86 and FD-258. A credit history check is performed as well.

Top Secret Security Clearance

The FBI notes that a top secret security clearance has all of the steps that a secret clearance does but with two major differences. First, the applicant's history dating back 10 years is analyzed. Lastly, this type of clearance can take six to nine months to process. The background check the FBI conducts is extensive. Citizenship is verified for family members, the applicant's birth date, educational history, employment history and military history are all analyzed and verified. Interviews are conducted with those who know the candidate include current spouses or spouses who have been with the applicant within the last 10 years. Current and prior residences are confirmed and current or former neighbors are interviewed.

Credit History Implications

As part of the security clearance screening process, credit history is checked and public records are scrutinized. Any information relating to bankruptcies, divorces and criminal or civil litigation is found, as it exists, and analyzed. The FBI does state that credit troubles do not automatically disqualify someone from gaining a security clearance. However, it also says that it can indeed cause an application to be rejected.

How Spouse's Credit Can Impact Security Clearance Applications

Spousal credit history may or may not affect someone who is applying for a security clearance. Whether it does depends on one major factor. CNNMoney describes that if one or more accounts that is in some stage of delinquency or default is shared by both spouses, then the credit profile of both spouses will be affected. A delinquent account that is in one spouse's name will not affect the credit of the other spouse unless his name is on that account as well. Individuals who wish to keep their credit clean need to make sure that any account with their name on it, whether it be only their own or held jointly, remains current. As long as this is done, the credit history of the other spouse should not be an issue when the credit check is done.

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How to Establish a New Credit File

Your credit file is checked by lenders each time you apply for a line of credit. Until you establish a credit file, applications for credit are likely to be declined. You need to establish a new credit file if you are a new resident to the United States, even if you had a good credit file in your previous country. If you are at college its good to establish a new credit file. It makes it easier to manage your finances. Credit facilities, used sensibly, can provide financial options beside just paying cash.

Instructions

1

Pay your telephone, electricity, water, and gas bills on time. Utility companies report late or missed payments to credit reporting bureaus. You cant establish a new credit file by paying your bills on time, as these are not reported, but late or missed payments can establish a poor credit file.

2

Get a checking account. Keep it in good credit. Very occasionally request a small overdraft for a short duration. Ensure you repay the overdraft on time. Banks do not check your credit file before authorizing an overdraft but it is recorded with a credit reporting bureau and establishes a new credit file.

3

Check out prepaid credit cards. Many are available. You do not need a credit file to obtain a prepaid card, but some card issuers offer a credit building facility.

MasterCard and Visa websites have links to several card issuers that offer prepaid credit cards. If your card has credit building then topping up (charging near the credit limit) and certain purchases get recorded to credit reporting bureaus, establishing a new credit file.

4

Get a secured credit card. Its a great way of establishing a new credit file quickly.

Deposit an amount you can afford with the card issuer. It is held as a guarantee and refunded when you have built up a good credit record. You will be given a credit limit of up to 100 percent of your deposit. The card, credit limit, and payments are recorded with the credit reporting bureaus.

5

Apply online for a retail store card. Its best to do this when youve had a secured card for a few months. Store cards are easier to obtain than regular credit cards. Used wisely, they build your newly established credit file.

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How to Get Medical Bills Off of My Credit

Medical bills are some of the most costly bills that people can incur. Not only is health insurance expensive for those who have it, but there are still deductibles and out-of-pocket expenses that may be unaffordable. The bad news is that if you fail to pay your medical debts, doctors and hospitals can report you to the credit bureaus causing your score to go down. This can adversely affect you in that you may not be able to obtain loans and credit cards, and it may increase insurance rates. There are a few things you can do to get medical bills off your credit report and regain control of your financial life.

Instructions

1

Become aware of the specific medical bills that you owe by obtaining a copy of your credit reports. Get a copy from TransUnion, Experian, and Equifax since they all keep separate records and reporting may differ among the three. You will want to compare these reports to copies of your medical bills and statements. Check each carefully to make sure there are no differentiations between them and figure out the total balance you owe.

2

Determine what you can pay monthly toward those medical bills. You have a few different options at your disposal: pay in full, make monthly payments, or use a debt consolidation agency. If you are able to pay in full, this will work in your favor as far as quickly removing the debt off your credit report. However, it is not feasible for many to do this so you may want to work out a payment plan with your doctor or hospital. Many will work with you as they would rather receive their money slowly than to not receive it at all. If you want to consolidate your debts, use a nonprofit debt consolidation firm. For a nominal fee, they can help lower your interest rates, reduce or remove penalties, and consolidate your payments into a lump sum so you only have to make a single monthly payment. Many creditors will work with a reputable debt consolidation agency since some are partially funded by them.

3

Negotiate a settlement if the bills are too much for you to afford. Often, doctors and hospitals will lower the costs for patients who do not make much money. Sometimes they may cut the bills up to 40 to 60 percent of their actual cost. Once you have gotten the cost down to an affordable amount, begin making payments so the statement of delinquency can be removed off your credit report.

4

Wait it out if all else fails. Medical bills may be so high that there is no way you can afford to pay them back. In this case, a doctor or hospital will report you as delinquent to the credit bureaus and you will have to wait up to seven years for them to fall off.

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How to Fix My Credit and Check My Credit Score

A bad credit score won't do you any favors when you're seeking financing. Having a poor history of debt management is stressful and difficult to overcome. Difficult, but not impossible. With the right strategy and a positive attitude, you can repair your credit. The first step is to obtain your credit report so you know exactly where you stand. Once you determine the damage, you can go about fixing it. It won't be easy and it will take some time, but be smart and stick with your plan and you will see improvement.

Instructions

1

Obtain a copy of your credit report from the government's Annual Credit Report website. You are entitled to one free copy in a 12-month period. The report pulls your scores from the three major bureaus: Experian, Equifax and TransUnion.

2

Review your credit report for errors or inaccuracies. These can make an already bad credit score even worse. Contact the credit bureaus immediately to begin the removal process, since it can take up to 30 days to remove the incorrect information.

3

Identify the major problems in the remaining items. Rank them by severity of delinquency. Plan to attack the more damaging items first.

4

Create a budget. Start with necessities like rent, mortgage, insurance, utilities and food. Next, allocate funds to the debts listed on your credit report. See if you have enough to meet your minimum payments.

5

Contact your creditors and attempt to negotiate. Don't deal with the first person you contact. Specifically ask for somebody with the authority to modify your account. Ask for a lower rate, reduced payments or even a reduced principal amount. Show a willingness to work with your creditors and there is a good possibility they will work with you.

6

Stick with your budget and make your new payments as agreed. Once you become delinquent on a modified plan, you will ruin the good faith you've built and your creditors will no longer be sympathetic.

7

Run your credit report again after a year of steady payments, and see how you've progressed. You can also pay for a copy in a shorter time frame if you are willing. If you've stuck to your budget and worked with your creditors without falling back to delinquency, you should notice an improvement in your scores.

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Can I Dispute a Medical Bill on My Credit Report?

Medical bills can be costly and can blemish your credit if you fail to pay them in a timely fashion. If you have health insurance, a settlement may take a long time to pay out and you are still responsible for payment of the bill while you wait. If the account becomes delinquent, it can be reported to a collection agency thereby lowering your credit score. If you have a medical bill erroneously reported on your credit report, it's important to take steps to correct or dispute the information.

A Widespread Problem

Approximately 14 million Americans are struggling with past due medical bills erroneously reported to collection agencies, according to a December 2010 article published in "The New York Times." These bills are frequently incurred when patients are facing emergencies or tough diagnoses, and when they are least able to keep track of their due dates. When settlements are paid late, health care providers hire collection agencies who report the unpaid bills to the credit bureaus.

Reporting The Bill

Consistently check your credit report. You are entitled to a free credit report each year from the major credit reporting bureaus -- Experian, TransUnion and Equifax. When you find the bill you want to dispute on your credit report, write a letter to the three credit bureaus and explain in detail the error with the unpaid bill. Provide documentation, such as insurance reports or statements. The credit agencies will open an investigation and, by law, they must review consumer complaints.

Consequences

Unpaid medical bills can have negative consequences on your credit report. Your credit score can drop, which affects your ability to borrow money and establish lines of credit. In some cases, a low credit score can hinder your employment opportunities as well. Typically, collection agencies will notify the credit bureaus every month that you do not satisfy your past due account; this will continually drop your score.

Be Proactive

Many doctors, dentists and other medical facilities are accommodating if you communicate your financial situation. Medical professionals may take partial payment for outstanding bills or reduce the interest rate or late fees. Some may even reduce the total debt, according to author Robin Leonard.

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Student Credit Rating

More than 80 percent of students had a credit card in 2008, so the majority of college students have a credit score, according to Sandra Block of USA Today. A 2009 credit card law makes it more difficult for college students to obtain credit, but not impossible. Because college students tend to have the least experience managing credit, it is important to establish a good credit score early in life so they can acquire loans needed to obtain big-tickets items after college.

Identification

To obtain a credit rating, a student must have at least one line of credit or loan. Borrowers do not have a "starting" score. Once the borrower attains enough history on an account -- usually six months -- the credit bureaus can give him a credit score. Although a short borrowing history tends to work against a score, this is not always so with young borrowers. The FICO model compares new borrowers only to other new borrowers, instead of to people with longer histories and better repayment habits. Thus, young borrowers often have high scores if they have no negative data on file. However, a young borrower's score usually drops once the bureaus lump him in with borrowers who have a lengthy credit history.

Importance

Even when a student does not plan to use credit for a while, it may help to start building credit as soon as possible. After college, the student might want a mortgage for his first home or an auto loan. Credit scores also can impact an individual in matters unrelated to credit. Employers often check a person's credit before hiring him, and a low credit score may prevent getting certain job perks or duties, such as acquiring a business credit line from the employer to rent a car.

Tip

Parents should help students manage their first line of credit. Some common pitfalls include maxing out a credit card (using all the credit available) and paying late. A maxed-out credit card can cost several dozen points, according to Bankrate, especially if the borrower has above-average credit. Any delinquency, even a single late payment, remains on a credit report for seven years. So a mishap during a freshman year can cause headaches well after graduation.

Warning

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 -- also known as the Credit CARD Act -- prevents creditors from approving lines of credit to borrowers under age 21 unless he can prove an income or a parent cosigns on the account. This is meant to protect college students from predatory lending and damaging their credit score. If the student cannot get an unsecured card on his own, he can try to obtain a secured credit card account. This requires a security deposit, so the student cannot spend more than what is in the account. Secured cards report to the credit bureaus, so the student must still pay his bill on time, or he will damage his credit. If he makes timely payments, however, the secured credit card can help his credit rating over time.

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How to Remove LVNV Funding From a Credit Report

LVNV Funding is a junk debt buyer that purchases debt that creditors were unable to collect. LVNV purchases a wide variety of debt and operates under numerous names. While you may find you have an account showing on your credit report by LVNV Funding, you cannot just call a credit bureau and request the account be removed. You must follow a process to have any account removed from your credit report, and there is no guarantee the account will be removed.

Instructions

1

Look at every aspect of the LVNV Funding account reporting on your credit report. Try to find any error in the listing. The Federal Trade Commission (FTC) enforces the Fair Credit Reporting Act (FCRA) that gives you the right to dispute any incorrect listing on your credit report. The error can be as simple as a date or type of account, but you need to find some error to dispute the account. You do not need to prove the error, but you should have some reason to believe the information is wrong. Perhaps you remember the account being opened in a certain month, and LVNV is reporting a different month. You then have reason to dispute the account.

2

Find the credit bureau's dispute address, website or phone number in the credit report as well as the file number. File your dispute in the manner you prefer. Write a letter listing the LVNV account, and include your personal information and credit file number. Call the dispute number listed on the credit report or sign online at the website address listed. Whichever way you prefer, you will need to enter the account information, and the name of the creditor.

3

Wait for the credit bureau to process the dispute request. When you initiate the dispute, the credit bureau contacts LVNV and asks the company to verify, or update the information listed on the credit report. LVNV is given 30 days to respond to the inquiry. The account will be updated or verified if LVNV responds, but if LVNV fails to respond, the entire account will be deleted. The credit bureau will send you a letter in the mail or contact you via email if you disputed via the website. The letter will show the results of the dispute, and in some cases you will get a new credit report showing the changes.

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How to Check a Credit Rating in Ontario, Canada

Canadians can check their credit ratings by ordering a credit report from one of two organizations: Equifax or Transunion. These organizations provide free credit reports when you order by mail or telephone and offer instant credit reports online for a fee. It is important to check your credit report regularly to ensure that your financial information--to which potential landlords, utility companies and creditors have access--is up to date and accurate.

Instructions

By Mail

1

Call Equifax at 800-465-7166 or Transunion at 800-663-9980 to request your credit report or go to the Equifax or Transunion websites (see Resources). Download and print a request for a credit report form.

2

Fill in the form. You must include your name, social insurance number and address. If you have recently moved, write your previous addresses for three years for Equifax and two years for Transunion. Include copies of two pieces of government identification, such as a driver license, health card or passport. If your identification doesn't show your current address, you must also include a copy of a bill or bank statement with this address.

3

Send your request form with documents enclosed to Equifax at:

National Consumer Relations
P.O. Box 190, Station Jean Talon
Montreal, Quebec H1S 2Z2

Or, send your request form with documents enclosed to Transunion at:

Consumer Relations Centre
P.O. Box 338 LCD1
Hamilton, Ontario L8L 7W2

Equifax Online

4

Go the the Equifax website (see Resources). Click on Order Now under the Score Power banner. This brings you to a page offering various Equifax services.

5

Click on Order Now under Equifax Credit Report. This brings you to the "Order and Registration" page. Fill in the registration form and verify your identity. You will be asked a number of questions based on your credit profile. If you answer enough of the questions correctly, the system will allow you to proceed.

6

Pay your fees. You must fill in your credit card information and pay a fee of $15.50 to get your credit report. Once you have submitted your payment, your report will be available for viewing on the Equifax website for 30 days.

Transunion Online

7

Go to the Transunion website (see Resources). Click on Get Your Credit Profile Now. This takes you to the "Place Your Order" page. Fill in your personal information.

8

Pay your fee. Enter your credit card information to pay a fee of $14.95 and get your credit report.

9

Verify your identity. You will be asked a number of questions based on information contained in your credit profile. Once your identity is confirmed, you may view your credit report.

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Steps to Protect Against Identity Theft

A lost or stolen wallet constitutes a risk to your credit rating due to the possibility of someone illegally using your credit cards and debit cards to make purchases, a practice known as identity theft. Your information may be used to open new credit accounts under your name. The Federal Trade Commission states you must act immediately after realizing your personal ID or credit cards are stolen to protect yourself against fraudulent purchases. The quicker you take action, the less likely you are to fall victim to identity theft.

Instructions

1

Call the customer service number of your current credit card companies, and cancel all open credit card accounts.

2

Contact one of the three credit reporting agencies--TransUnion, Equifax or Experian--and request to place a fraud alert on your credit report. The fraud alert requires the creditor to verify your identity prior to opening a new account with your information.

3

Prevent online identity theft by using only credit cards to shop online. The Privacy Rights Clearinghouse states that credit cards are better protected from fraud than debit cards, since debit cards automatically withdraw money from your checking account.

4

Read your credit report at least once a year to check for unknown account activity. Request a free credit report from each credit reporting agency, and report any errors to the agency.

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How to Change My Credit Rating

Your credit rating is a score used by financial lenders to assess how good a risk you are before they will offer you a loan. Your rating will affect whether you are approved for a mortgage or car loan as well as the interest rates you are offered on credit cards and other forms of credit. There is no quick fix for your credit rating; it will only change slowly over time. However, there are several steps you can take to change your credit rating in a positive way.

Instructions

1

Request a free copy of your credit report through the official Annual Credit Report website. Examine the report for any items you think are inaccurate and for items that are reducing your score. Order a report from each of the credit-rating bureaus, as they may show different items.

2

Write to the credit reporting agency about any items you want to dispute. Include a copy of your credit report with the item(s) in question circled and copies of documents that support your claim.

3

Calculate your debt to get a good look at all of your outstanding loans, credit card balances, and the interest you are paying each month. A high debt to income ratio will lower your credit rating. This list will also help you identify the debts you are paying the most interest on, so you can work to pay them off first.

4

Get all loans into good standing. This will require you to pay at least the minimum balance for a certain period of time. Call your creditor to find out the details for each loan as they will vary.

5

Make your payments on all bills, loans and credit cards on time, every month. Any late payments will reduce your credit rating while consistently paying on time will improve your credit rating.

6

Wait for negative items to be removed over time. According to the FTC, it generally takes seven years for a negative item to come off your report, while bankruptcy will remain on your report for ten years. Only time can remove these items.

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Consumer Credit Reporting Companies

When evaluating a customer's application for a credit product, companies use credit reports from a credit reporting agency. The reports contain information about a consumer's open accounts, the payment history on those accounts and how many credit inquires are on the report. Three major credit bureaus provide credit reports both to lenders and consumers.

TransUnion

TransUnion has more than 30 years of experience in the credit reporting industry and provides services to over 500 million customers worldwide. The company allows consumers to purchase a copy of their credit reports, as well as their credit scores. In addition, customers can sign up for 3-Bureau Credit Monitoring, providing access to all three national credit bureaus. Customers receive updates every 30 days and have the opportunity to dispute incorrect information via the company's website. TransUnion also partners with the website zendough.com, giving customers access to their credit scores, along with information about the six factors that lead to determining the score.

Experian

Experian is a credit reporting company that has access to more than 215 million United States consumers while offering services to clients in over 65 countries throughout the world. Customers can choose from a number of services offered by the company, including credit monitoring, credit checks and identity theft protection. Additional products offered by Experian include credit education services to help consumers build their credit history and the ability to request and view disputes regarding incorrect information online. Experian also provides consumers with free credit advice and the company's Triple Advantage Credit Monitoring service sends email alerts whenever a change is detected on a credit report.

Equifax

Equifax has a history of delivering credit information to both business and consumers for more than 100 years. Services are provided to 15 countries located in the Europe, Latin American and North America. Customers have the ability to purchase all credit scores and reports from all three bureaus from Equifax, and also have the ability to estimate how an expected change in their credit history will affect the score. Equifax also offers identity theft protection services, with free fraud notifications sent to customers anytime there is suspicious activity. Also available is the company's Debt Wise service, that gives customers information on which debt repayment options will have their accounts paid off faster.

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