July 2005 ~ Personal Finance and Money Management

Sunday, July 31, 2005

How to Dispute Credit With Equifax

4:28 AM No comments

Credit reporting bureaus such as Equifax are legally obligated to keep your credit accounts reporting with accurate and truthful information. If you have a problem with a credit account, such as an incorrect payment history, wrong balance or you don't even own the account, you can file a dispute. Equifax investigates the account and confirms the information with the account holder in order to provide accurate credit information.

Instructions

Navigate to Equifax's online dispute webpage.

Put the Equifax credit report number in the first field if you have ordered one from the company within 90 days. Skip this field if you have not. Enter your personal information in the fields provided, such as name, Social Security number and addresses for the past two years. Click "Submit."

Answer the multiple choice questions to prove your identity. These questions are drawn from the Lexus Nexus database and ask questions about your lenders, credit accounts and addresses. Click "Submit."

Press the "Start a New Dispute" button.

Use the sidebar navigation options to go through each part of your credit report. If you see an inaccurate account, click "Dispute This Item." Put a check mark next to the specific reason you are disputing the account or enter a brief statement on the inaccuracy of the listing. Click "Add Dispute" to get Equifax to investigate the account.

Will It Hurt My Credit to Look at My Credit Score?

2:02 AM No comments

You may have heard that credit inquiries -- that is, someone checking your credit report -- can lead to a drop in your score. This is sometimes true if the inquiry comes from a potential lender. But you can rest assured that your credit will not be penalized if you yourself look at your score.

You have the right to access the credit report held by each of the three major credit bureaus, Equifax, TransUnion and Experian, once each year for free. The best way to do this is through the AnnualCreditReport.com website. If you space these inquiries out and check just one bureau at a time, you can keep an eye on your report every four months for free. You should note, though, that this access will not include your actual three digit credit score. You have to pay a fee to see your score in addition to your report. The bureaus are able to distinguish that the inquiry is being made by you, and there will be no effect on your score.

It's very important to keep an eye on your report for several reasons. You want to make sure that all the information on your report is accurate, and that no incorrect statements are dragging down your score. You also want to keep a close eye out for identity theft. Lastly it's important to make sure your report is in great shape just before you apply for a major loan such as a mortgage or a car note.

Checking your own score won't have an effect, but if you give lenders permission to access your report, it can depress your score temporarily. If you are shopping around for a mortgage or a car loan, all of those inquiries from lenders will be treated as one, minimizing the impact. If you are applying for revolving credit, such as a credit card or store card, each inquiry will have a separate downward effect on your score.

You can give other people and agencies permission to access your report with no effect on your score. If a prospective landlord looks at your credit, this has no implications for your score. That's also true of a prospective employer. If an insurance company checks your score for underwriting purposes after you have applied for a policy, this will also have no effect.

Ways to Clear Your Credit Report Completely

8:47 PM No comments

When you make a goal to straighten out your poor credit history, you might feel the need to do something to clear it immediately, but this will be a long journey. Federal law allows the credit reporting agencies to leave negative items on your report for possibly more than a decade. In some situations you can clear a report in a matter of hours.

Wait long enough and you can clear your report without any effort. Most negative items, such as missed payments and collection accounts, have a seven-year reporting limit. Chapter 7 bankruptcy stays for 10 years, and Chapter 13 bankruptcy stays between seven and 10 years depending on when you finish your repayment plan. Unpaid tax liens can stay indefinitely, but some of the credit bureaus only report them for 15 years, according to Smart Credit.

The Fair Credit Reporting Act gives all consumers the right to correct mistakes on their credit files. This is done by disputing the inaccurate negative item with the credit bureaus. You can clear reports even faster with a rapid re-scoring service. The normal dispute process takes up to a month--not including the time the agencies need to update their databases, which might be another month or two. Rapid re-scoring companies have a special connection to the bureaus that allows them to expedite the dispute process. However, they can only update reports when the creditor admits to an error or you have evidence to back up your claim.

Do not fall prey to claims of credit repair clinics that you can start a new credit profile and ignore your old one. It is a felony to fool creditors by using some of the tactics suggested by a credit repair company, such as applying for a tax ID number and putting that in place of a Social Security number on a credit application.

The next best thing to disputing errors on your credit report is rebuilding a credit history. Knocking off debt and paying accounts on time will add positive payment history to boost your credit score, while the negative items slowly diminish in importance. You might want to add a new account to your credit history if you only have reports with a negative item in the past. Not using credit fails to build any history.

Instructions For Credit Repair

1:37 PM No comments

Repairing credit takes time. There is no magic bullet that will erase all negative marks on a credit report if they are accurate. The goal for credit repair is to get back on track financially with consistent and responsible steps to fix past credit problems and work toward improving future credit reports. Negative marks don't stay on a person's credit history forever and adding positive financial information to the reports will help balance out negative credit.

Check your credit report every six months for accuracy. Checking a credit report defends a person not only against identity theft and fraudulent charges, but billing or reporting mistakes from lenders. If an error is found, individuals should contact the credit reporting agency and the lender to have the information changed. Even simple errors such as a lender stating that they closed the account rather than the applicant can hurt a credit score.

Change any financial bad habits from the past that may have contributed to credit problems. Circumstances are different for each individual. Some may have a reduced credit score due to improper spending and budgeting while others may have had financial hardships due to illness or loss of employment. But all circumstances can benefit from creating a household budget, living within our means and starting a savings for future emergencies.

Contact current lenders to work out payment plans. If paying outstanding debt is a problem, contact the creditors as soon as you know that you are unable to make a payment. Not only will it show that you are willing to work with them, the lender may offer a better payment plan to help avoid late or missed payments from showing up on a credit report.

Avoid applying for new credit cards to help pay off outstanding debts. This practice may increase debt and can negatively affect a credit score. Aim for paying off current debts or loans and bringing them well below the credit limit. Having credit cards with high balances or having too many open lines of credit can hurt a credit report. Making regular payments on current debt is the best way to repair a credit score.

Analyze your situation to find out which accounts to close and which ones to leave open. Closing open lines of credit or loans can negatively affect a credit score if done too quickly. If your goal is to avoid future debt and you have a problem with spending, it may be best to close accounts after they have been paid off. Alternatively, it can actually help a credit score to keep a couple of long-standing accounts open. Close any extra accounts after they have been paid off, but try to avoid closing more than one account every six months.

Investigate a credit repair company before doing business with them. There are agencies that claim to fix your credit for a fee. But they cannot remove accurate information from your credit report even if it's negative. Check with a nonprofit credit counselor before doing business with a credit repair company or debt consolidation agency to find out what credit repair options are available.

Credit-Rebuilding Tips

9:17 AM No comments

Your credit score is based on information in your credit report. The FICO credit score, the standard for use by lenders, is based on five categories: payment history, balances on your accounts, the length of your credit history, how many types of credit you have used and how much new credit you have recently applied for. There is no instant fix for poor credit, but over time you can rebuild your score.

Payment history makes up 35 percent of your credit score and takes into account the payments you make, whether they are on time or late and whether you have faithfully met your debt obligations in the past. If you have any accounts past due, get them current as quickly as possible so those companies will report your account as being current rather than delinquent. If you cannot make your payments as agreed, contact your creditors to ask if you can work out a revised payment schedule. Creditors are generally willing to work with you because they will lose money if they have to use a collections agency or if you default on the loan. Once you've gotten your accounts current, make sure you continue to make your payments on time. Recent information is weighted more heavily than past information, so you can start making a difference on your credit score right away.

Each time a creditor pulls your credit report to determine whether to issue you a loan or a line of credit, an inquiry is added to your credit report. Ten percent of your credit score is based on recent credit inquiries, so having a number of applications will bring down your score. However, there are a few exceptions to how inquiries affect your score. If you check your own credit report, it does not count against you. You should check your credit report once a year to make sure there is no incorrect information on it. Also, if you are applying for either a home mortgage or a car loan, there is a special exception that minimizes the impact of shopping around for the best loan. As long as the inquiries are made in close proximity to one another, for the purposes of calculating your credit score, they will count as only one inquiry.

Closing an account will not erase negative information associated with that account. In fact, closing your accounts could actually hurt your credit score. First, in order to close an account, it must be paid off or you will be marked as defaulting. If the account is current and you close it, the company will not report that you are current on that account to the credit bureau. Even though you have no balance on the account, your credit score would still improve when the company reports the account as current. Second, when you close an account, you decrease your overall credit limit, which increases the percentage of your available credit that you are using and brings down your score.

How to Check the Credit History on a Second Party

3:14 PM No comments

If you are considering someone for employment, apartment rental or as a roommate, then it is beneficial to check the person's credit history. This provides insight into financial history and helps you judge how reliable and timely the person is at making payments. Taking the time to check the credit history of a second party can spare you difficulty in the future. Numerous tools are available online to help you check the credit history on a second party.

Instructions

Access QuickBackgroundChecks.com. This website is designed to check credit scores for employers, landlords and even the average person. It reveals such financial history as mortgage payments, child support payments, credit card payments and more. In addition, it provides an employment history so potential employers can better gauge the second party's job stability.

Access YouCheckCredit.com. This website is designed specifically for tenant screening and background checks. It offers a credit report from TransUnion for $14.95 and delivers the results in 10 seconds. In addition, you have the option to purchase eviction reports, state criminal reports, national criminal reports, sex offender searches, terrorist searches and a prior history address verification.

Access AAACredit.net. This website is designed specifically for employee background checks, offering four pre-employment screening packages: the full employment package, which is the most comprehensive; the quick screening package, which includes the most basic information; the senior screening package, which includes a more in-depth look than the quick screening package; and the executive screening package, which is ideal for potential business employees.

Can I Increase My Credit Score Up 100 Points in Three Months?

7:16 AM No comments

Setting a goal to gain a certain amount of points on your credit score is a great way to motivate yourself, but shooting for 100 points or any particular number cannot happen in the credit scoring system in the United States. There are so many variables in the Fair Isaac risk model that not even a professional statistician could predict a 100-point gain, especially in three months. However, you can eventually get those 100 points with enough time.

It is impossible to say if you can increase your credit score by 100 points in three months because each case is unique. Even with the details of a credit report, predicting any type of gain is difficult because the Fair Isaac Corporation holds the patent on the FICO algorithm. The fastest way to gain points would be to successfully dispute falsely reported negative items on your report. Negative items usually carry the most weight, so removing them tends to have the biggest effect on the FICO algorithm. A debt settlement, for instance, takes up to 125 points off a score.

Paying down credit card debt could get you halfway to your goal of 100 points. A maxed out credit card can take up to 45 points on a starting score of 780, according to Bankrate. If you have thousands in credit card debt, you will likely receive an even larger score increase, because total debt load counts for 30 percent in the FICO model.

Fair Isaac designs it FICO model to make it harder to gain points as your score increases. Thus, if you had a score of 500, it would take less time to increase to 600 than from 600 to 700. Time is an important factor in credit scoring, because negative items only decline in impact as they get older. You should see a score increase over three months without any negatives, but probably not enough to make a jump of 100 points.

Since nobody can tell you how to gain 100 points in three months, it is better to pay at least the minimum on all bills every month and carry as little debt as possible -- the two most important factors in the FICO equation. Eventually, you will gain 100 points, but this might not occur in three months.

Why Divorce Hurts Your Credit

7:10 PM No comments

Knowing that divorce has no direct impact on a credit score calculation might ease the stress of a separation, however, a good chance exists that the divorce could cause financial duress that wrecks the score. This occurs because married couples often join their accounts. The best way to mitigate the potential effect of a divorce on a credit score is reworking finances before the divorce becomes official.

Divorce makes no difference to a credit score, because the FICO formula does not factor in life events like a divorce. What can result from a divorce is a fight over which party owes bills. This could lead to a standoff that means missed payments on both spouses' reports, because spouses frequently have joint accounts. Joint accounts hold both parties liable for the balance. Also, married couples often give one of the parties all of the duties of managing accounts, so one spouse might not even know about certain accounts.

A dissolution of marriage can put one or both spouses in a terrible financial situation. It is not unheard of for one spouse to try to harm the other spouse by purposely not paying a bill on a joint account. In some cases, the creditors might refuse to remove a cosigner on an account. This is especially true for a mortgage, where only refinancing the home loan can remove the cosigner until the court decides who takes on the responsibility for the account.

When a marriage looks to be heading for a divorce, it is wise to take out a credit card on your own, especially if you are a homemaker or have little income, suggests Wallet Pop. As soon as you divorce, you might not make enough to qualify for a new account. Also, close joint accounts and try to pay off the balances. The credit bureaus probably won't care about documentation of a divorce when you fall behind on payments, so pay off any bills until the courts decide how to divide up the debt.

Couples who worry about credit after a divorce should try to keep as many accounts separate as possible. Instead of putting both spouses' names on a mortgage, for example, the spouse with the best credit can apply for the loan and the other puts up some collateral. Also, review your credit report for potentially negative items, such as missed payments. Always check on accounts until the divorce comes to an end. At the very least, make minimum payments, because a single missed bill can wreck your score for months.

How to Check a Boyfriend's Credit

4:43 AM No comments

Maybe you are considering moving in with your boyfriend, or maybe he's come around asking for a short-term loan. In either case, making a brash decision without the facts can be a big financial risk. You shouldn't get involved in money matters with your boyfriend without knowing where he stands, and there's no better way to find out than by performing a credit check.

Instructions

Ask your boyfriend to present his credit score and information, if he has access to it. It is unlikely you will be able to access his credit score without his permission, unless you get a court order--and by then, you've probably already engaged in an exchange of money with him.

Help your boyfriend request a credit report from one or more of the credit reporting bureaus, such as Experian, EquiFax, or TransUnion.

Ask your boyfriend to set up an account with a credit report monitoring site, such as FreeCreditReport.com and give you access to the account so that you can have full disclosure of his credit situation at any time you wish to see it.

Renting Cars & Credit Scores

6:41 PM No comments

Rental-car companies generally don't check renters' credit scores if they reserve their cars with a credit card. However, a low credit score can still indirectly impact whether you're able to rent a car if you can't get a credit card in your own name. Debit-card users are more likely to be subjected to credit checks when they rent cars if they manage to find a company that accepts debit cards to reserve rental cars.

People who can't qualify for a credit card because they have poor credit ratings may have trouble renting a car. Rental car companies often require renters to have credit cards to rent a vehicle. That's true even if you pay for the rental with a debit card when you return the car. Companies that allow car rentals with a debit card only put what's known as an authorization hold on the card during the rental period that may be as high as $500. Authorization holds allow rental companies to reserve an amount in a debit account that exceeds the cost of the rental to ensure you have enough money in the account to make the final payment.

Companies that allow renters who don't have credit cards to pay for rentals with debit cards may do a credit check on the renter. Some companies that check credit ratings use the Equifax credit reporting company to do the credit check. Several car rental credit checks could negatively impact your credit score. Credit scoring methods vary, but people who have several recent credit checks on their credit reports are risking a decline in their scores.

Each company that runs credit checks has its own standards for the lowest credit score that's acceptable to permit a car rental. Generally, people who have credit scores below 620 are classified as subprime or bad credit borrowers in the auto industry. You may have trouble renting a car if your score falls below that number. People who are concerned about whether their credit rating will allow them to rent a car should contact a rental company in advance to find out about the rental requirements.

Some rental-car companies are more flexible than others when it comes to checking credit scores. For example, Dollar Rent a Car allows people to reserve a car with a debit card, but Dollar will check renters' credit scores in such cases. The company's website doesn't indicate what credit score is required, but it does say that people who don't meet Dollar's credit criteria will still be allowed to rent a car if they have a credit card in their name. The credit card would be used to reserve the car rental. However, renters can still use their debit cards to pay for their rentals when they return their cars.

Does Applying for a Checking Account Lower a Credit Score?

4:41 AM No comments

Most consumers are aware that credit inquiries can potentially lower their credit score. Applying for new lines of credit typically require a hard-pull inquiry on a credit report, thus lowering the score. When applying for a bank account, a copy of your credit report is obtained and shows as an inquiry, even though you are not requesting credit. Many wonder how this will impact their score.

A hard-pull credit inquiry is when an individual authorizes a lender to obtain a copy of their credit report. A soft pull inquiry is when the individual checks their own credit report or it is involuntarily pulled by a potential creditor. For example, a pre-approved credit card application is a soft pull inquiry. According to Credit-factor.com, soft pull inquiries do not affect your credit score.

Banks have the option of doing either type of inquiry, hard or soft pull. If the bank wants the pull to be soft, they must enter a special code in their account system when they begin the customer's application. If the checking account is going to have overdraft protection or a debit card, a mandatory hard pull inquiry will occur.

One hard pull inquiry does not typically lower a credit score significantly. By keeping other credit inquiries to a minimum, the checking account application should not lower the score much. If a person is seeking additional lines of credit and has applied for multiple credit cards, they may want to consider opening the checking account after the lines of credit are approved since another inquiry may be enough to impact the interest rate.

If You Dispute a Credit Report, Does That Start the Date of Last Activity Over Again?

3:13 PM No comments

Credit reports have limits on the time they report most negative items. Positive accounts may appear indefinitely, the Federal Trade Commission advises that late accounts must be wiped out of credit bureau files seven years from the delinquency date. This is different from the last activity date, although disputing credit reports does not affect either of them.

A credit report is a file created maintained by the three dominant credit bureaus. TransUnion, Experian and Equifax all have their own files, which report on credit accounts and activities like loan applications and payments. The date of last activity refers to the last time there was a change reported on an account, according to Lew Sichelman of MarketWatch. This may be anything from an increased credit limit or owed balance to an account closure.

Consumers have the right to use a dispute process for credit file mistakes, the FTC explains. Many people use this process to repair their credit because it often removes old negative-status accounts. Any error is grounds for a dispute, and the Divorcenet legal information site explains that such items are erased if the credit bureau is too busy to thoroughly investigate them or if the creditor ignores verification attempts.

TransUnion, Experian and Equifax have online dispute pages for consumer use. People simply enter the required information about the erroneous item, and the bureaus investigate it within 30 days of receiving it. This process is separate from account activity dates because it is conducted by the bureaus and does not involve any direct interaction with the original creditor or actions on the account itself. The bureaus erase anything they cannot validate as correct.

Disputing an item in a credit file does not have any affect on the seven-year reporting period for negative accounts, which does not start from the last activity date. Rod Griffin of the Experian public education department explains that it begins on the date the account first became late. Both activity and delinquency dates are not affected by disputes. Account change dates and late payment dates remain constant.

The last activity clock does not restart for disputes, but the challenge might be ruled as "frivolous" or "irrelevant" if it has no basis, Divorcenet warns. The Fair Credit Reporting Act exempts credit bureaus from pursuing complaints in those categories. Avoid this by limiting disputes to items with genuine mistakes, and provide a detailed explanation of what is wrong.

What Does a No Adverse Factor Mean on My Good Credit Score?

12:20 PM 3 comments

When credit reports are scored using the standard industry FICO model, each factor that influences your credit score is assigned a code. These codes will often appear on the summary page of your credit report to assist you in understanding your score.

"No Adverse Factor" is Code 00 and is used as a part of the FICO Classic 98 and FICO Classic 04 scoring models. This code indicates that no information appearing on the credit report negatively impacts the score.

Code 00 appears only on credit reports that were pulled before 2008. In 2008, FICO released the new scoring model, "FICO 08," which does not contain a scoring code for credit reports that lack any derogatory information.

It is extremely uncommon for an individual to be assigned Code 00. Even minor credit report entries, such as credit inquiries, can negatively impact a score. If a credit report lacks any adverse factors, it is pristine.

Having a credit report with no adverse factors will allow you to qualify for the best rates possible when applying for loans or credit.

It is possible to have no adverse factors on one credit bureau's report, yet have derogatory information appear on another. This is due to the fact that some creditors do not report their accounts to all three credit bureaus.

What Makes Your FICO Score Drop?

4:09 AM No comments

Your credit score impacts everything from a loan approval to your chances of renting an apartment. It can even help determine whether an employer will hire you or if an insurer will issue you a policy. It's important to understand how FICO calculates your score and what occurrences can make it drop.

According to MyFico, the information in your credit report determines your FICO credit score. This score ranges from 300 to 850 and changes as the data in your report changes. Several factors help determine your score -- 35 percent of the score reflects how well you pay your bills, 30 percent is based on the amount of debt you have, 15 percent reflects the average length of your credit accounts, 10 percent is determined by the amount of new credit you have, and the last 10 percent reflects the mix of credit types you have.

A change in one or more areas of your credit report can cause your score to drop. The two largest factors have the most effect. For example, late payments on your account will lower your score. The later the payment, the more damage it does to your score. This one area alone accounts for 35 percent of your score. According to MyFico, 30 percent of your score reflects your credit utilization ratio, which is the amount of debt you have versus the amount of credit you have. The more available credit, the lower this ratio and the higher your score. Maxing out a credit card will raise this ratio because you'll have more debt than available credit; hence, it will cause your score to drop. How much your score drops depends upon the other factors in your report.

Efforts to raise your score can actually backfire if you're not careful. When calculating your score, FICO considers your credit mix, such as credit cards, mortgages and loans. This mix accounts for 10 percent of your score; however, FICO warns against obtaining new credit to improve your credit mix. Although new credit accounts for 10 percent of your score, when you open a new credit account, this shortens the average length of your credit history, which makes up 15 percent of the score. FICO rewards long credit histories since it shows stability. A shorter credit history will lower your score. According to MyFico, only apply for new credit if you really need it, not to improve your score.

Even if your have a low FICO score, it won't remain there forever for two reasons. First, since your score isn't a stagnate number, it will improve as the data in your report improves. Secondly, under the Fair Credit Reporting Act, negative account information can only remain on a credit report for up to seven years. If something on a report is beyond this statue of limitations, the FCRA gives you the right to dispute it with the credit bureau and have it removed. File a dispute online at the bureau's website, by phone or mail.

Beware of companies that promise to repair your credit or increase your FICO score. This could be a scam, according to the Federal Trade Commission. Under the FCRA, credit bureaus are not required to remove accurate negative data from a credit report that falls within the statue of limitations. If there's a mistake on your report, the FCRA gives you the right to correct errors on that report yourself for free.

What Your Canadian Credit Score Means

10:22 PM No comments

In Canada, every form of credit--even if it's as simple as a basic car loan--boils down into a single credit score which indicates a borrower's reliability to repay when asking for money. Credit scores can be obtained free of charge from two credit bureau companies: Trans Union Canada and Equifax Canada.

A Canadian credit score (or FICO, as it's called from Equifax) judges a borrower's financial health and gives lenders a single-score snapshot of the borrower's reliability to manage debt. These scores can range from a low of 300 to 900.

Canadian credit bureaus code borrowing facilities into three different categories on a credit report, which feeds into the score. "R" indicates revolving credit or credit cards. This is the most common code. "I" stands for installment credit or personal loans and car loans; and "O" means open credit or lines of credit and student loans.

Credit ratings that contribute to a borrower's overall score range from 0 to 9. A "0" rating is reserved for new, unused credit while a "1" is the best you can have. A "9" score is the worst and usually reserved for bankruptcies.

The ratings are combined with the credit type code. For example, "R1" indicates a perfect revolving credit rating.

How to Check Credit Reports for Delinquent Mortgage Payments

6:31 AM No comments

Every consumer has three different credit reports, compiled and maintained by national credit reporting companies called TransUnion, Equifax and Experian. These reports list detailed information on credit cards, loans and other accounts, including mortgages. They show items like the account opening date, original balance, current balance and payment history. Delinquent mortgage payments are listed and are perceived as negative information by other creditors who review the reports. Consumers are entitled to regularly check their reports for such items so they know their credit status, according to the Federal Trade Commission (FTC).

Instructions

Log on to the Internet. If possible, use a computer with anti-spyware software because credit report orders require your Social Security number and other sensitive data. Malicious programs can capture this information and transmit it to identity thieves on unprotected computers.

Visit the government's official website for free credit reports, annualcreditreport.com. You can buy reports from the credit bureaus, but the FTC explains that federal law requires them to give you one free copy annually.

Select the credit reports you wish to check. All three credit bureaus should have your mortgage information, but their data could vary because they maintain separate databases. The government's free credit report website lets you choose one, two or all three reports.

Read through the data on each credit report until you locate your mortgage account information. It will be readily identifiable because it lists the mortgage holder's name and other relevant data.

Scrutinize the payment history when you find the mortgage account entry. An account with on-time payments will have a "paid as agreed status." Late payments will have a notation about the length of the delinquency. For example, the report may state that the payments in question were 30, 60 or 90 days behind.

What Categories Are Included in Your Credit Report?

4:28 AM No comments

Credit reports allow for easy access to personal credit history information. As noted by the San Francisco Federal Reserve Bank, retailers and banks used to be required to contact each potential consumer's debtors individually in order to make a final decision about loans and credit cards. Credit reports shorten this potentially lengthy process. Additionally, credit reports make it easier for individuals to track their credit and make financial decisions. While the exact format of credit reports may vary by provider, there tend to be similar categories in all reports.

Consumer information credit report categories include basic personal information: name, address, phone number, date of birth and other personal details. They also list employers. When consumers have problems or issues involving credit, they can contact their credit bureau and submit personal comments, which also may be listed in the consumer information category.

Following consumer personal information, most credit reports provide a basic consumer summary, which lists amounts owed for any real estate, revolving accounts such as credit cards, installment accounts such as car loans, collection accounts and any other accounts. Many credit reports also include a more detailed credit information category that lists more specific information about each credit account.

The public record category lists any state or county records that have to do with credit, such as bankruptcy, monetary judgments and tax liens. This section also lists the specific details of each record, including the date it was filed, how it was filed and the amount of money involved.

The inquiries category lists any creditors that have recently accessed your credit report, usually to determine whether you are approved for a line of credit or a loan. As noted at True Credit, several inquiries in a short period of time may negatively affect an individual's credit score.

How to Turn in a Customer to a Credit Bureau

6:44 PM No comments

Having a customer who is delinquent in his payments is very frustrating and damaging to your business. Serious delinquencies should be reported to credit bureaus. This will have an impact on the customer's ability to obtain new credit and interest rates he will be offered. When you report to credit reporting agencies, other businesses are made aware of your experience with the customer. There are a number of ways to report debts to a credit reporting agencies.

Instructions

Contact each of the three main credit reporting agencies -- TransUnion, Experian and Equifax -- to find out the requirements for reporting to each company. You must have at least have a minimum number of account histories to report to qualify. Obtain a membership application for each company.

Fill out the membership application and pay fees associated with setting up reporting accounts with each of the three bureaus. You are not required to set up accounts with all three bureaus, but it is suggested so that each reporting company has accurate information.

Report monthly in the format required to the credit reporting agencies. Each agency will have annually membership and service fees associated with reporting. If you have trouble correctly formatting your credit reports for submission, credit report service companies are available to assist you for a fee.

What Affects How Long Something Stays on My Credit Report?

4:16 PM No comments

When you pull your credit report, you will notice that it contains records of your current debts and accounts and debts you owed in the past. While some notations, such as credit cards that you pay on time each month, have a positive effect on your credit score, others, such as a bankruptcy, have a negative impact. Various factors influence how long a given notation, whether positive or negative, will remain a part of your credit history.

The Fair Credit Reporting Act establishes reporting guidelines for each type of account that appears on your credit report. The majority of accounts, such as paid-off loans and collection accounts, remain on your credit file for no longer than seven years.

The FCRA establishes special reporting rules for bankruptcies, court judgments and tax liens. Bankruptcies remain a part of your credit history for up to 10 years while court judgments remain for seven years or until the statute of limitations for enforcing the judgment expires in your state, whichever time period is longer. Unpaid tax liens will appear on your credit record indefinitely. Once paid, however, the credit bureaus will remove your tax lien after seven years.

An account's status as either open or closed influences how long it will appear on your credit report. For example, an open credit card account that you make purchases with and payments on each month will continue to update on your credit file indefinitely because the account is still active. Once you close the account, however, the seven-year reporting period kicks in.

Defaulting on a debt influences its reporting period. After defaulting on either a loan or credit card account, your creditor will eventually take action against you and charge off the debt. Delinquent debts remain a part of your credit record for seven years and 180 days from the date you stopped making your payments.

If your debt was secured, your creditor may repossess your collateral, such as a home or car, in lieu of payment. Evidence of the repossession or foreclosure will remain in your credit history for seven years from the date the incident occurred.

If, upon reviewing your credit history, you discover that a creditor mistakenly attributes a debt to you that you do not owe, you can dispute the account with the credit bureaus. The FCRA requires that all credit bureaus receiving disputes from consumers investigate an account's validity and, if the information provider does not verify that the data is accurate, the credit bureaus must remove the entry. Thus, disputing a debt that does not belong to you may shorten the amount of time that the notation appears within your credit history--even if the reporting period has yet to expire.

How to Find Out a Credit Score With Transunion

11:36 AM No comments

One of the three major credit bureaus, TransUnion uses information provided by your creditors to maintain your credit report and score. Although the credit bureaus use the same formula for calculating consumer credit scores, not all creditors report to all three credit bureaus. Due to this, your credit report and score may differ between credit bureaus. Unfortunately, you cannot simply purchase your credit score from TransUnion. You must sign up for a monthly credit monitoring system before you can access your TransUnion credit score.

Instructions

Visit TransUnion's website at TransUnion.com. Select "I want my free credit score" from the home page or click the hyperlink for "Credit Score" in the right side column at the bottom of the screen.

Fill in the order form with your name and address. If you have lived at your current address less than two years, you must also include your previous address. This helps TransUnion identity your credit file.

Select the option on the screen that best reflects your reason for checking your credit score. TransUnion provides options such as "Purchasing a Home" and "Concerned About ID Theft."

Select a username, password and secret question. Doing so sets up an account with TransUnion that allows you to log in and review your credit history whenever you like.

Enter the last four digits of your Social Security number and your date of birth. Agree to the monthly fee for credit monitoring by clicking the box at the very bottom of the form.

Read the user agreement at the bottom of the screen. Click "I Accept" to accept the user agreement.

Enter your credit card information on the following screen. Select "Submit."

Return to TransUnion's home page. Log in via the "member login" link in the middle of the home page to view your credit history and credit score.

How to Build Credit to Get a Car?

9:34 AM No comments

You can build the credit needed to buy a car by showing increasing levels of responsibility as you open new credit accounts with banks, department stores, gas stations and other merchants. Paying your bills on time will be important as you show potential creditors that you are ready for an automobile loan.

Instructions

Apply for a department store credit card. Department stores generally charge higher interest rates than banks, but their cards are often easier to obtain. That makes them attractive for people establishing credit for the first time. You can apply for department store cards in the store, online, and sometimes over the telephone.

Start using your department store card, or apply to another store if you were initially turned down. Keep applying until you are successful, but avoid making many applications over a short period. That could suggest that you are desperate for credit and might your credit score to drop.

Make consistent on-time payments to your department store credit card. Apply for a second department store or similar card after about six months. Start using it and make payments on time.

Apply for a full-featured bank credit card such as a MasterCard or Visa. Your successful management of department store cards should make you a good candidate for the bank card. Begin using the MasterCard or Visa, and make every payment on time. You can get applications from your bank or online.

Apply for a secured credit card if your initial applications for a bank card are turned down. For a secured card, you must place money in a bank account and allow it to be held as collateral. That eliminates the risk for banks, making the cards easy to obtain.

Apply for a second credit bank credit card after several months, and also use it while making on-time payments. After a year or so of responsibly using bank cards and department store cards, you should have the credit needed for a car loan.

How to Notify Credit Agencies

9:03 PM No comments

The three major credit-reporting agencies in the United States are TransUnion, Experian and Equifax. Each credit agency can be contacted for consumer requests, inquiries and general correspondence. You have a credit file with each of the agencies and must contact each agency separately to correct or update information documented on your report. It is easy to notify all three credit agencies; however, the method of contact can vary based on your needs.

Instructions

Notify a credit agency about fraud activity on your credit report. Contact the fraud department directly by phone to place a fraud alert or security freeze on your credit report. Either service is free, and the alert can be placed on your credit report immediately to prevent future fraudulent activity.

Contact Equifax at 800-525-6285, TransUnion at 800-680-7289 and Experian at 888-397-3742. Verify your identity with your Social Security number and date of birth.

Notify a credit agency about a dispute. Go to the agency's website and sign in using your personal identification number or password. Download and complete an online dispute form. Check the form for completion and then submit it directly from the agency's website. Print a copy for your records.

Submit general inquiries. To notify a credit agency about a general customer service matter or to provide feedback about a product or service, contact the agency by mail. You can also notify the agency about a recent divorce. Include supporting documents such as a divorce decree, and itemize the jointly held accounts affected by the divorce.

What Is Considered a Great Credit Score?

3:46 PM No comments

A great credit score is about 775. Once you achieve that kind of financial consistency, your credit score ceases to be an issue whenever you apply for a credit card, loan or mortgage. Any credit score at that level or above will generally qualify for the best loans that any institution has to offer. Functionally, it is the same as having perfect credit.

Maintaining great credit can be as challenging as building it up in the first place. Any minor errors in terms of credit-affecting behavior can have significant negative effects on a very high credit score. If you've spent the time and effort required to build up your credit to that level, it helps to take some additional steps to make sure that it stays up at those lofty heights. Set up automatic bill payment programs for all fixed expenditures to make sure no errors occur.

An individual can build great credit only if he has demonstrated his ability to pay back loans on time without fail for years on end. It helps to maintain credit card balances of 15 percent or less of total available lines of credit while meeting all payments regularly. In some cases, it can be helpful to prepay credit card bills to make them function as if they were secured. Then it is impossible to miss a payment, even if the credit card company does something unexpected like changing the billing date without warning.

Pay off loans before their terms are over to help improve your credit score. This also saves money on interest payments. Lenders prefer to be pleasantly surprised by their borrowers with early payments. Choose a day in the month before most of your payments are due to send your payments in ahead of time. This way, if there are any problems with the transaction, you will be informed about them ahead of time so that they can be corrected before they become an issue.

One of the most important concepts to understand when attempting to build a credit score is the idea of risk management. Many people end up with bad credit because they do not protect themselves sufficiently from risks like medical issues, job loss and auto accidents. They treat credit as an all-purpose insurance plan. Protect yourself from life's unpleasant shocks by maintaining an emergency savings fund, and pay for proper insurance. This helps better than any clever trick to help you build credit in the long run.

Anyone can build up a great credit score. In fact, the average credit score of people over 70 is nearly 750. The average person takes a long time to gain the settled habits that are required to maintain a great credit score, but there's no reason why anyone needs to wait until her sunset years to start enjoying the benefits of great credit. Make it a priority early in life, and you'll be able to accomplish it, no matter what your salary is, where you live or what your personal situation is.

Does Lowering a Credit Line Affect Your Credit Score?

6:00 AM No comments

Lowering your credit line can have a somewhat negative effect on your credit score by reducing your debt utilization ratio. When you lower your credit line, it reduces the amount of your available credit. This makes your proportion of debt in use higher relative to your total available credit.

Your credit score is reported by three credit reporting bureaus -- Equifax, Experian and TransUnion. Although each agency has its own scoring model, all are based on the FICO scoring system that was developed by the Fair Isaac Corp. In its score, FICO breaks down all scoring factors into five broad categories: credit history, length of credit history, amounts owed, types of credit and new credit. The history factors make up roughly half of your score, amounts owed makes up 30 percent and the other two categories account for 10 percent each.

Debt utilization is the major premise of the amounts used category of your FICO score. This is a relative comparison of the amount of credit you currently use to the amount of credit you have available for use. Lenders are concerned with your debt utilization because they want to know when you ask for new credit whether you are already swimming in debt. Generally, the lower your debt utilization the better your score, says Liz Pulliam Weston of MSN Money in her December 2010 article "Weird stuff that hurts your credit."

The actual point effect on your credit score depends on the original size of the credit line and what you lower it to. Lowering a credit line from $10,000 to $5,000 has more effect than lowering from $2,000 to $1,000 because you have lowered your available credit by $5,000 instead of $1,000. Even though your score may drop a few points by lowering the line, doing so still makes sense if you struggle with spending discipline and want to limit your access to credit.

One alternative you might consider as opposed to lowering your credit line is to ask your creditor to put a temporarily hold on the account if you are getting your finances in order. If it is a credit card account, you could also put the card in a safe deposit box or simply cut it up. If you decide you want access later, the card provider would issue a replacement. These are alternatives if you really want to avoid impacting your credit score in any way. Avoid closing the account, if possible, to retain the account's history.

How to Improve Your Credit Rating in the UK

4:05 AM No comments

A low credit rating can be a serious obstacle to obtaining a loan, credit card or mortgage, yet there are practical ways to help boost it over time. It is a good idea to check your credit file annually as part of your long-term financial planning and then take immediate steps to repair your rating if it is damagingly low. Martin Lewis, the founder of Money Saving Expert, says that you have a legal right to see your credit report for just $3. If you improve your credit rating, you will become a more attractive proposition to lenders.

Instructions

Get a copy of your credit report from Experian, Callcredit or Equifax. Order online or request a copy by mail, which you will receive within seven working days.

Check you report to make sure all your personal details and debt and payment details are correct and up-to-date. Consider adding a "notice of correction" to your file, explaining why you missed payments, if there is a good reason for this.

Get rid of all unwanted store and credit cards, because these lines of credit could show up on your credit file. Call the card provider and close the card account, then confirm this in writing. Lenders are wary of anyone with access to high credit limits.

Improve your credit history by paying loans and debts regularly, particularly if you have missed payments in the past. Set up direct debits for loans and cards so that the minimum is always paid on time.

Ensure that your credit score is not being damaged by someone you had financial links with in the past. Contact the three main credit reference agencies asking to disassociate yourself from them, and explain your reasons. The agencies will send a form that you must complete, including details of who you want removed from your file.

How Foreclosure Affects Credit Score

1:55 PM No comments

The impact of a foreclosure on your credit score can be devastating--and long-lasting. Les Christie of CNN Money reports that FICO estimates that losing a house through foreclosure--or similar scenarios such as a short sale or a deed-in-lieu--can cause a credit score drop of 85 to 160 points.

While foreclosure is often seen as an inevitability for those who cannot pay their mortgage, homeowners and lenders alike have begun to employ other ways of discharging the debt--ways that are just as harmful to your credit score.

The short sale, a popular option in recessions fueled by decreased home values, allows the seller and/or lender to sell the home for less than the mortgage, with the lender forgiving the difference.

In a deed-in-lieu transaction, often employed by owners who are not upside down in their mortgage, but no longer wish to pay the mortgage or who have had no buyers, the owner turns the home over to the lender in exchange for a discharge of the debt.

Maxine Sweet of Experian, one of the nation's three major credit reporting bureaus, reports that the damage a foreclosure does to borrowers' credit scores is not related to the foreclosure so much as the fact that you paid less than what was owed--a semantic difference.

In essence, the foreclosure, short sale or deed-in-lieu is seen as debt that was settled for less than what was owed.

Even borrowers with great credit histories will find their credit scores affected by foreclosure. Those who choose to leave the home before foreclosure or short sale proceedings have begun, either through a deed-in-lieu agreement or simply by walking away from the mortgage, will fare no better.

"Some borrowers may think that because they never missed a payment, they can 'walk away' from their homes with relatively little impact on scores," says FICO's Daniel Watts. "When a deed-in-lieu or short sale is reported as a partial payment, it's treated as a serious delinquency just like a foreclosure."

The impact of a foreclosure or other mortgage discharge will be drastic.

"The point loss also depends on the borrower's starting point," says Christie of CNN Money. "People with very high credit scores have more to lose than low-score borrowers; the impact of a single blemish on an 800 score is more than on a 500."

Expect a credit score drop of "about 85 points for the 680 score borrower to as much as 160 for the 780 score [borrower]," Christie warns.

MSN Money's Liz Pulliam Weston recommends avoiding foreclosure if at all possible by consulting a legitimate consumer credit counseling agency, attempting to refinance or attempting loan modification.

"It's far better to sell a home while you still have equity and some semblance of a credit score than to have it taken away in foreclosure," says Pulliam Weston.

What Is a Good Debt to Credit Available Score?

3:05 AM No comments

According to CNN Money, your overall debt-to-available credit ratio should not exceed 25 percent. The Motley Fool notes that people with perfect credit do not have a debt-to-available credit of more than 35 percent. Your overall debt-to-available credit ratio is calculated by dividing your total credit card debt by your total credit card limits.

According to MSN Money, you should limit your debt-to-available credit ratio on each of your credit cards to 30 percent or less. You can calculate the debt-to-available credit ratio for individual cards by dividing your current balance by the credit limit for that card.

When determining what is a god debt-to-available credit score, you need to consider both your overall debt-to-available credit ratio and your ratio for each card because both impact your credit score. Keeping your total below 25 percent and each card below 30 percent will help improve your credit score.

How to Send New Credit Information to Credit Reporting Agencies

12:24 AM No comments

Personal finance hinges on the credit reporting industry. A credit rating gives you an unbiased financial history and can give you an idea of someone's fiscal responsibility. This provides incentive to customers and clients to pay credit accounts in a timely manner. You can send positive credit information on accounts in good standing so that their credit rating goes up. Also, knowing that you can make their credit rating go down might keep some credit accounts from being late on their payments.

Instructions

Keep good records. You should have detailed files that include contracts and receipts of financial transactions. You will need these records to prove your financial relationship with the credit accounts. Remember that credit accounts in good standing should only be sent to credit reporting agencies every six months. Negative information should only be sent after the credit account has been delinquent for more than 90 days.

Contact the owners of the credit accounts to inform them that you will be sending new credit information to the credit reporting agencies. This is not a requirement, but it may get you a payment on a delinquent account. At the very least, it will encourage good-standing accounts to remain that way.

Enlist the help of a credit reporting service to submit the credit information to the credit agencies electronically. You can pay these companies a flat fee per account and they will use their relationship with the credit agencies to send new credit information. It is very cost-effective if you only have a few credit accounts to manage each year.

Buy a membership to the credit agencies if your business volume warrants it. Credit agencies allow you to send new credit information directly to them using their electronic Internet-based system if you buy a yearly membership from them. You must have at least 100 credit accounts to report each year to be eligible. Any less would not be worth the hefty membership fee required.

What Is Your Credit Score Composed Of?

4:44 PM No comments

The FICO credit score, calculated by the Fair Isaac Corporation, represents the most widely used credit scoring system. It parses data from the three major credit bureaus and breaks the numbers down into five main components, each of which is weighted according to time-tested methods of consumer payment behavior and the likelihood that credit accounts will be paid in full.

At 35 percent, a consumer's payment history represents the single most influential factor in her credit score. Late payments are an obvious source of a lower score, but so are minimum payments. Creditors like to see that their customers are liquid enough that they can pay more than just the bare minimum. Even paying a single dollar over the minimum impacts a score positively.

The debt-to-income ratio derives from a common accounting term that reveals how much of a consumer's income goes to pay down debt. The clichs rightly have us believe that life is full of surprises and that it is critical to save for a rainy day. A debtor who owes a significant amount on each account is subject to the vagaries of unpredictable daily circumstances that can turn a once pristine payment history into a game of perpetual catch-up. Ideally, total debt payments should not consume more than a quarter of income, and this ratio counts for 30 percent of his score.

If a consumer maintains payment consistency, that pattern begins to represent character and responsibility, not just the ability to keep paying. Creditors value such behavior both figuratively and literally, as the accounts that pay on time, every time, over many years, are least likely to default. This factor comprises 15 percent of the total credit score.

Consumers who open up new accounts more frequently than fast-food restaurants appear on street corners tend to fall into the higher-risk category. The question becomes why so much new credit is necessary. This accounts for 10 percent of a credit score. The type of new credit also impacts scores. Creditors more favorably look upon individuals who take out a mortgage, for example, rather than a payday loan, which suggests serious cash-flow problems. This makes up the final 10 percent of a credit score.

How to Get an Instant Free Credit Report

8:05 AM No comments

Your credit report is an important document that details your credit history and overall credit standing. Understanding your credit report and confirming its accuracy is vital when trying to apply for new credit. United States law mandates that everyone is entitled to access his or her credit report once a year without charge. You can view your free credit report instantly online.

Instructions

Open the annual free credit report Web site in your web browser (see Resources). Select your state from the drop-down menu and click on the "Request Report" button.

Insert your personal identification information into the appropriate fields. Enter your name, Social Security number, current address and previous address if you have lived at your current address for less than two years. Enter the randomized characters at the bottom of the screen into the corresponding field and click on the "Continue" button.

Select the credit reporting agency you would like to receive your report from. The three credit reporting agencies are Experian, Transunion and Equifax. You can choose any combination of these companies to receive a credit report from. Click "Next" once you have chosen your companies. Click "Next" again to submit your request.

Click "Continue" after you are redirected to the company's Web site. Enter a username and password to be allowed access to your credit report at a later date. Click "Continue."

View your credit report through the company Web site once it is retrieved. You can save or print the credit report for your records by clicking on the corresponding options.

Click on the "Return to AnnualCreditReport.com" link to go back to the main Web site. You can access additional credit reports from other credit bureaus by returning to the main page and selecting the appropriate reporting bureau name.

Can Low Credit Scores Affect Rental History?

6:45 PM No comments

Having a low credit will not just reduce a your options for getting loans and raise interest rates, it may also preclude you from renting some dwellings. You can rent with a low credit score, but it may take more work.

Not all landlords run credit checks on their applicants. Even those that do pull up credit scores will consider other factors when deciding who can rent from them.

A person with a low credit score can probably still rent at a place that runs a credit check, but only with someone who will co-sign on the apartment and/or pay a hefty security deposit.

As long as a person can prove that she has always paid rent on time, is a quiet, respectful tenant and has good references, the landlord will probably forgive a bad credit history.

People planning to rent should start improving their credit scores well before their apartment hunt. The major credit reporting agencies are required to give people one free credit report each year. Those with low credit scores should identify problem areas and start correcting them immediately.

According to MyNewPlace.com, small apartment complexes and privately owned rental units are the most likely places not to run a credit check on a potential renter.

How Long Does It Take to Dispute Something on Your Credit Report?

4:13 PM No comments

Your credit report provides the information used to calculate your credit score, and the report also provides some of the data used by lenders when they evaluate your application for credit. Employers and insurance companies sometimes use information on an applicant's credit report when making certain determinations. If your credit report contains information you believe is inaccurate, file a dispute, which should be resolved within a couple of months.

You can obtain a free copy of your credit report once each year through AnnualCreditReport.com. When you receive your credit report, you can review the information for possible errors or inaccuracies. The process of initiating a dispute for a perceived inaccuracy should not take more than an hour. It could take even less time, depending on what you are disputing and what method you use to initiate the dispute with the credit bureau reporting the item in question. The options include filing a dispute online and sending a dispute letter to the credit bureau by postal mail. Filing a dispute online is generally faster than writing a letter, although the Federal Trade Commission (FTC) recommends sending a letter.

The Fair Credit Reporting Act requires that each credit bureau respond to your dispute within 30 days of receiving the dispute. If the credit bureau cannot verify the validity of the disputed item within 30 days of receiving the dispute, the item must be deleted from your credit report. The credit bureau should notify you of the results within five days of the dispute being resolved.

If you are in the process of applying for a mortgage and notice an error on your credit report, you might not have time to wait 30 to 45 days for the dispute to be resolved. In this situation, ask your lender about rapid rescoring. This a procedure by which the lender refers you to a company that obtains proof of the error from the company that reported it and passes the proof along to the credit bureaus. With rapid rescoring, you can resolve a dispute within 24 to 72 hours, according to ABC Money. Rapid rescoring typically requires a fee.

Disputing errors on your credit report and having those inaccuracies erased removes these negative marks and boosts your credit score. This, in turn, helps you obtain better terms on your loans and credit cards, including lower interest rates. If a successful dispute helps get you a lower interest rate on your mortgage, you could save thousands of dollars.

How to Clean Up My Credit and Find Out Whats My Credit Score

10:19 AM No comments

Clean Up My Credit

Your credit score has a very large impact on many aspects of your life. It can affect your ability to get a car, personal, or house loan. It can also affect the interest rate that you would pay for any of these loans. It is very important that your credit score be as high as possible.

Instructions

The first step to improving your credit score is to request a copy of your credit reports. Make sure to request a report from each of the three major credit reporting agencies. You can do this for free once per year. It is important to look at a recent copy of your credit report to determine if any errors have been reported against you.

Report any errors that you find to the credit reporting agency. These errors can include late payments that were not late, accounts that are not yours, and credit limits that are reported as lower than the actual limit. This should be in the form of a written letter. If you have proof that the information reported is not factual, this should be mailed along with the letter.

Pay down credit card balances. Lending institutions look at how much credit you have used compared to the amount available to you. Most companies recommend that people who use credit cards never charge more than half of their credit limit. This shows lenders that you have restraint and that you do not overextend yourself in terms of credit.

Pay your bills on time, every time. Late payments can cause large drops in your credit score, so it is important to avoid them at all costs. If possible, try to set up automatic withdrawals from your bank account so that your payments will never be late. Making your payments on time is one of the best ways to quickly improve your credit score.

Get your free credit report and score online at http://bit.ly/credrep or by following the link in the resource section below!

How to Check Your Credit Rating

5:46 AM No comments

It is important to know your credit rating and the information listed on your credit report. Being familiar with the information in your credit report will allow you to fight potential identity fraud and incorrectly reported information. It also will put you in the right direction toward improving your credit score. With government-sponsored free credit report incentives, there are several options for consumers who wish to request their credit reports.

Instructions

Log on to the Annual Credit Report website.

Use the drop-down menu to select your state of residence. Click "Request Report."

Enter information into each required field. Start with your name, date of birth and Social Security number. Follow with your current address and previous address. Indicate whether you have received a credit report in the last 2 years. Finish by entering the security code provided. Click "Continue."

Select one or more of the nationwide consumer credit reporting companies provided. Request to receive your credit report from TransUnion, Experian and/or Equifax. Click "Next" to continue.

Click to be transferred to a requested credit reporting agency's website. View your free credit report.

Navigate to additional credit reporting companies, if applicable.

Go to the DMV website provided below in "Resources" to access your free credit report, if you prefer an online alternative to the Annual Credit Report website.

Scroll down to the "Click here" tag. Double right-click to proceed.

Fill in the required information fields. Enter your name, email address and street address.

Indicate whether you have lived at your current residence for more than 6 months, and click "Continue."

Create a username and password, and select a reminder phrase and answer.

Enter your Social Security number, date of birth and mother's maiden name.

Enter your credit card number and expiration date. Your credit card will not be charged during the free trial period. You will have to cancel the order within the 9-day trial period in order to avoid the $14.95 fee.

Read the terms of the free trial agreement. Scroll down and double right-click on the "Submit Secure Order" tab.

Visit the ftc.gov/credit website or call 1-877-322-8228 to request a free Credit Report Request Form.

Complete the Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta GA 30348-5281.

Wait to receive your free credit report by mail.

Rapid Credit Reporting

12:20 PM No comments

Claims from companies that they can fix a credit score in hours are usually bogus, but only a few companies are qualified to potentially repair your credit report within days through rapid re-scoring. Rapid re-rescoring, however, is not a commercial product so you will have to go through a qualified agent. Also, they cannot fix everything on your report.

A rapid re-scoring service cannot fix legitimate items on your credit report, only incorrect items. If, for example, you are a victim of identity theft and someone takes a loan in your name, a rapid re-scoring service could remove it from your report in 72 hours. Normally, the process of disputing an item and verifying it takes up to 90 days before the credit agencies update the report.

Only about 200 companies in the United States offer re-scoring service, because the credit bureaus only trust a few firms with this function, according to Financial Web. Private consumers cannot access a re-scoring service, only qualified lenders, such as mortgage providers and banks. Thus, you must find a lender with a relationship with a re-scoring service. This service costs between $25 and $50 per item in 2010.

The consumers that benefit the most from rapid re-scoring are those shopping for a loan immediately or in the very near future. The cost to correct a negative item pales in comparison to what you might save on a loan. Saving just 0.1 percent on a $100,000 mortgage, for instance, saves $100 per year.

Using a rapid re-scoring service does not guarantee you will see an improvement in your credit score, because dozens of variables go into the credit score formula. Also, you usually must have evidence that any item is truly a mistake. This typically means having a letter from the creditor clearly stating the item was reported in error, according to MSN Money Central. Re-scoring services can contact a lender for you, but this will prolong the verification process.

Credit Score & Bankruptcy

5:43 AM No comments

The most widely-used scoring system utilized by credit reporting agencies is the FICO (Fair Isaac Corporation) credit score. Scores can be up to 850 and are calculated from various credit data contained in your credit report. The data is reported in five categories; each accounts for part of your overall credit score. The effect of bankruptcy depends largely on your entire credit profile prior to filing for bankruptcy protection. You will be required to complete a credit counseling course from a government-approved organization within the six-month period prior to filing for bankruptcy protection.

A number of factors influence how much your credit score decreases after bankruptcy, including the length of your credit history, your credit score prior to filing and which, if any, debts were kept separate from the bankruptcy. The more credit accounts included in your bankruptcy, the more your score will be impacted. Someone with previously stellar credit may suffer a huge drop in her credit score. Someone who already has several negative marks in his credit history may notice a less significant drop in his credit score.

Chapter 7 is a liquidation bankruptcy -- most, if not all debts get discharged. Generally, a Chapter 7 bankruptcy remains on your credit report for up to 10 years from the filing date. According to MyFICO.com, this only pertains to the Public Records section of your report; the individual credit accounts in the bankruptcy are removed after seven years.

Chapter 13 is a reorganization bankruptcy -- debts get repaid over three to five years. Chapter 13 bankruptcies remain on your report for up to seven years from the filing date. However, they may be less damaging than Chapter 7 bankruptcies to your credit score as long as you do not default on your repayment plan.

Some attorneys and financial experts believe that a Chapter 7 bankruptcy can improve a damaged credit score. Your debt-to-income ratio will dramatically improve; your negative payment history will be gone and replaced with "Discharged in Bankruptcy," of which the effects will fade over time; and if you continue to make payments on secured debts not included in the bankruptcy, you are building a positive payment history.

Normally, your FICO credit score is partially determined by comparing your credit profile to other people in the general population. Following bankruptcy, your credit is compared only to others who have filed bankruptcy so in essence, you may be able to improve your rating faster after bankruptcy. To rebuild your credit profile faster, open credit accounts with major banks, as their approval carries more weight. If some time has passed, ask for an increase of your credit limit to raise your available credit (but do not use the extra credit) and check your free annual credit reports from AnnualCreditReport.com. If your reports have errors, remove them.

Will Paying Off My Debt Help My Credit Score?

10:47 PM No comments

Your credit score is a three-digit number from Fair Isaac Corp. or one of the three major credit bureaus. It has a major impact on how easily you can borrow money and get insurance policies. You do not directly control your score, as it is calculated with data from your TransUnion, Experian and Equifax credit reports, but you can do things, like paying off debt, that have a lot of weight in the scoring formula.

Your debt load affects your credit score, and revolving accounts like credit cards have the biggest influence, according to the MyFICO scoring website. Focus your balance reduction efforts on your credit cards by paying extra money on them, and pay any installment loans like mortgages, car payments and personal loans as agreed. The declining revolving account balances raise your score. The Motley Fool website recommends putting the most money onto your highest interest credit cards for the best debt-lowering impact.

Debt load is the second most important factor in credit scoring formulas, outweighed only by payment history. MyFICO explains that the money you owe and the specific types of accounts that have balances make up 30 percent of your credit score. This area also includes the original balance on installment loans compared to how much you have paid and the proportion of your available credit that you have used on revolving accounts.

Combine other credit score -aising strategies with debt reduction for the best effect. MSN Money writer Liz Weston recommends monitoring your credit reports by getting free copies from annualcreditreport.com every year. Dispute mistakes that hurt your credit score, like prompt payments that show up as late. The credit bureaus accept complaints through their websites. Set up automatic payment for as many bills as possible to avoid delinquencies, which take a big toll on your score. Use credit regularly, but pay off as much as possible every month to keep from building your debt loan back up once it reaches a manageable level.

Leave credit cards open after you pay them off or you risk hurting your credit score. Old accounts give you a long-term credit use history, which helps your score. The unused credit also offsets other debts you owe because scoring formulas weigh your owed amounts against available credit lines. The Board of Governors of the Federal Reserve System explains that banks cannot legally charge a fee for account inactivity, but they can close the credit card. Avoid closure by buying things with the card every few months and paying the full balance immediately.

How to Secure All Three FICO Scores

8:03 PM No comments

Most consumers realize they have a credit or "FICO" score, but many fail to appreciate its importance. Your FICO score is one of the most important numbers in your financial life. Your FICO score determines what loans you can get and how much interest you'll pay. In some cases, employers are even using FICO scores when making hiring decisions! That's why it's so important to regularly check your FICO scores from all three of the major credit rating bureaus. You're entitled to one free credit report from each agency per year.

Instructions

Contact Equifax, the largest of the credit rating bureaus, by calling 1-800-685-1111 or by writing to: Equifax Credit Information Services, P.O. Box 740241, Atlanta, GA 30374. Be prepared to provide your full name, date of birth and Social Security number. You can also contact Equifax via their website.

Contact Experian by calling 1-888-243-6951 or by writing to: Experian, 475 Anton Blvd., Costa Mesa, CA 92626. Again, be prepared to provide your full name, date of birth and Social Security number to receive your Experian FICO score. You can also contact Experian via their website.

Contact Transunion by calling 1-800-916-8800 or by writing to: Transunion Consumer Relations, P.O. Box 2000, Chester, PA 19022-2000. Provide your name, date of birth and Social Security number to receive your Transunion FICO score. You can also contact Transunion via their website.

How Much Does Opting Out Hurt Your FICO Score?

6:12 PM No comments

Congress overhauled the credit card industry with the 2009 Credit CARD Act, which allows people to opt out of term changes 45 days in advance of them taking effect. Opting out of changes to your credit card agreement could hurt your FICO score, but the severity of the damage relies on other information on your credit report.

If "opting out" refers to removing yourself from the list of creditors who tender credit offers without an application, it will have a neutral impact on your credit score. Prescreened offers run a "soft pull" on a person's credit history, which means the inquiry was not initiated by the borrower, and thus, not an application for credit.

The act of opting out of changes to a card's terms and conditions will not hurt your score unless failing to agree to the new contracts requires closing the account. If you have to close your credit card account, it will hurt your credit utilization ratio and possibly your mix of accounts. Lowering your overall credit limit could make it appear you need a higher percent of your credit than you really do. Also, if you only have one card, closing it will reduce the variety of your accounts---10 percent of your credit score.

If you can withstand the temporary hit to your credit score and do not plan on needing credit for the foreseeable future, you can probably opt out safely to avoid higher interest charges. On the other hand, if you are shopping for a mortgage or other large loan, you want the highest score possible to get the lowest rate, so accepting the changes could be in your best interest. Just a half-point on a $300,000 mortgage, for example, would outweigh any increase on, say, a $2,000 balance on a credit card.

You could transfer the remaining balance on a card instead of opting out. Credit card companies often allow new accounts to transfer balances from other cards at zero percent for six to 18 months. Also, if you cannot pay off the balance immediately, you will continue making payments under the old terms on the card, which could include discretionary rate increases.

Credit Cards to Help Get Your Credit Up

1:50 AM No comments

Even people coming out of bankruptcy should start using credit cards to help rebuild their credit history, suggests experts such as Justin Harelik of Bankrate.com. Credit cards only help build credit when the borrower uses them responsibly or else they could do far more harm than good. As long as the borrower thinks he can handle new credit he can almost always find a card.

All credit cards are basically the same from a credit scoring viewpoint. However, it is better to have an account with a national bank, because such banks almost always report to the three national credit bureaus and tend to charge lower fees and finance charges, according to the BCS Alliance. Also, future lenders respect lines with big-name banks rather than community financial institutions or debt repair companies. Consumers with bad credit scores can expect to have only retail store or gas cards and secured accounts -- backed by collateral -- available to them.

Opening a new account always lowers a credit score a few points. With credit cards the percent of the credit limit a consumer uses plays a big part in the FICO scoring model used by most lenders. Thus borrowers should be careful about accruing a balance on their new card, especially the first month, because most borrowers put the annual fees on the account during the initial billing cycle. On a retail or gas card, which tend to have small limits, the fee can cause a high credit utilization ratio immediately.

Once a consumer acquires over seven credit cards the FICO system dings the score a little bit, according to The Motley Fool. Also, it will probably take about six to 12 months of positive payment history before the new card adds a significant amount of points to the borrower's credit score.

Secured cards work best when the borrower cannot qualify for an unsecured card. Once the consumer builds a sufficient amount of payment history the creditor will likely turn the account into an unsecured line or offer a unsecured card. Before a consumer goes for any card, he should ask the creditor to which bureaus it reports. Unless the lender reports to Equifax, Experian and TransUnion, the borrower is not maximizing the amount of history the account builds.

What Is a Good Credit Score?

6:08 AM No comments

A person's credit score is used for many things these days. Employers often use a person's credit score to determine if he is trustworthy for a job. Landlords use a credit score to determine if a person is going to pay his rent. Mortgage companies and other lenders use it to decide if a person is a good credit risk. But how many people actually know what a good credit score is? Depending on the purposes and other factors, the answer to that could vary.

The higher a person's credit score, the better it is and the more opportunities she will have for getting credit. The highest credit score a person can have is 850, according to the FICO score scale. Few people have a score of 850, which is excellent.

However, the range of a "good" credit score is between 660 and 749, but this figure is different depending on what type of company you are dealing with. For instance, a car finance company may be more lenient than a credit card company because there is a form of collateral in the value of the car if you decide to stop making your payments. Every company is different, though, and some of them will look at your particular situation in addition to your credit score before making a final decision.

People that have a credit score that is in the "good" range typically do not have many problems when it comes to borrowing money or obtaining financing for a mortgage, car or other loan. In addition to getting loans and financing with less trouble, a good credit score results in a lower interest rate. Depending on what type of loan the person receives, the interest rate could mean a difference of thousands of dollars over the life of the loan. An excellent or good credit score also opens up more opportunities for a person as she can often apply for and obtain personal loans for emergencies, home improvements and other reasons.

Credit scores are typically calculated by three major credit bureaus: TransUnion, Equifax and Experian. Many people will have different credit scores through each of these bureaus because different creditors report to different bureaus. For instance, those pesky school loans you have may only report your payments (or lack thereof) to the Equifax bureau. As a result, Equifax will have a different overall credit score for you than the other two bureaus. Some creditors report to all three bureaus. When a creditor determines if you have a good credit score, it will check all three bureaus to make a decision. If all three credit scores are good, there should be no problem obtaining financing.

A good credit score is ideal. However, there are many warnings to heed even if you do have a good credit score. People with a good credit score can easily fall deep into debt if they are not careful about the money they borrow and their payments. A couple of late payments on a new car that you obtained financing for could result in a lowered credit score. Getting too many credit cards or charging too much on your current credit cards could lower your good credit score in a matter of months. Don't let your good credit score become more of a detriment than an advantage by getting too much credit.

When trying to determine if you have a good credit score, the credit bureaus look at several factors regarding your past and current financial situation. One of the main aspects they consider is the financial responsibility you've exhibited. They check to see how often you've paid your bills on time and how often you pay them late. Late payments will negatively affect your good credit score. They also look at how much debt you have in relation to your income, or your debt-to-income ratio. A high amount of debt with a low amount of income will negatively affect your good credit score, too. The length of time you've had credit and the number of times you've applied for credit recently can also affect your good credit score one way or the other, depending on the answers to those questions.

Sunday, July 31, 2005

Instructions

Access to Your Report

Why Check Your Report

Inquiries That Affect Your Score

Inquiries That Don't Affect Your Score

Saturday, July 30, 2005

Waiting

Disputes and Rapid Rescoring

Warning

Tip

Check for Mistakes

Lifestyle Changes

Communication

Debt Repayment

Closing Accounts

Credit Repair Companies

Make Your Payments on Time

Limit Inquiries on Your Credit Card

Leave Accounts Open

Friday, July 29, 2005

Instructions

Identification

Other Ways

Considerations

Tip

Thursday, July 28, 2005

Identification

Considerations

Preventing Credit Damage

Tip

Instructions

Wednesday, July 27, 2005

Credit Cards

Credit Checks

Low Scores

Considerations

Hard and Soft Inquiries

Checking Account Inquiries

How This Affects a Score

Monday, July 25, 2005

Definition

Considerations

Process

Effects

Warning

Sunday, July 24, 2005

Facts

Time Frame

Considerations

Benefits

Warning

Identification

Effects

Considerations

Misconceptions

Warning

Friday, July 22, 2005

Score Ranges

Types of Credit

Credit Ratings

Instructions

Thursday, July 21, 2005

Consumer Information Category

Credit Information Category

Public Record Category

Inquiries Category

Wednesday, July 20, 2005

Instructions

Account Type

Open vs. Closed

Default Date

Debt Validity

Instructions

Instructions

Tuesday, July 19, 2005

Instructions

Significance

Function

Prevention/Solution