What Type of Judgments Show Up on a Credit Report?

Credit bureaus provide information to a variety of individuals and organizations who may have an interest in how you handle your financial responsibilities, including employers, lenders, government agencies, rental agencies, and anyone else with a legitimate need for access to such information. Your credit report may contain a wide variety of information including your past addresses, other names by which you may have gone, reports on how you have paid your bills and public records, including judgments.

Features

Credit reports may include monetary judgments issued against you by a federal, state, or county court.

Considerations

Some credit reporting agencies include non-monetary judgments issued against you on your credit report.

Identification

Any debt that the court determines to be legitimately yours, and that you are ordered to pay, will become a matter of public record and will appear on your credit report.

Time Frame

Bankruptcy judgments will appear on your credit report and will remain there for ten years.

Warning

Judgments that have been satisfied will still remain on your credit report for up to seven years after the settlement.

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How to Erase Late Payment History on Credit Report

If you pay your bills late, your credit will suffer-- that much is common knowledge. Most companies don't report you to credit agencies until after your bills are 30 days past due. However, a single 90-day late payment can be as damaging as filing bankruptcy, a tax lien, a collection, or a repossession. It doesn't matter whether the bill was for $100 or $10,000. So if you've had even a single late payment, it is important that you get this removed from your record immediately.

Instructions

Contact Your Creditor

1

Contact your creditor. If you've only had a few missed payments, they will oftentimes remove them with a phone call and a follow-up written request. Ask them for a "Goodwill Adjustment." It is common practice to do this for good customers that only have a few missed payments. Paying on time makes up 35% of your overall credit score, so don't overlook its importance.

2

Contact the credit bureaus. In general, a 30 to 60-day late payment is acceptable and will be removed. It is when payments go past 90 days that things begin to get troublesome. Remember that these can stay on your report for up to seven years and can be as damaging as a bankruptcy. If your creditor refuses to remove this, then you should contact the credit bureau directly. You can do this by going to Experian.com or by calling them at 1-888-397-3742.You can also go to Equifax.com or Transunion.com

3

If at first you don't succeed, try, try again. If you have a long history of missed payments, it will obviously be more difficult to get late payments removed. However, if you can show your creditors that you are responsible by paying your bills on time for six or more consecutive months, then it would be a good idea to try to get them to remove the late payments again. For pre-written legal letters to get your credit repaired, you can try Nolo.com.

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What Effect Did Credit Scoring Have at First?

Credit reporting began when small retailers shared information about their customers. As the system developed, credit bureaus emerged and the system begun adopting a formal statistical method to determine people's risk profiles. The credit scoring system has various effects when it first appeared.

Information Sharing

Even in its first stage, credit reporting provided small merchants with a way to share information about customers. The financial information allows the merchants to determine whether it would be risky to do business with specific individuals. In an informal way, they shared information about people's risk profiles and made business decisions based on the data. This resembles the way credit scoring works in a more formal system today.

Irrelevant Information

Credit reporting bureaus used to collect all types of information, including details that don't concern people's financial situation and behavior. For example, they gathered information pertaining to people's lifestyle, including sexual orientation and cleanliness. This led to a controversy in the 1960s because businesses used such information to refuse to provide services and opportunities to individuals based on prejudice against certain types of behavior. The incident led to the Congress passing the Fair Credit Reporting Act in 1971.

Reluctance

Not all businesses take up the credit scoring system initially. Notably, banks were reluctant to use the statistics-based calculations that produced people's credit scores. Lenders preferred to continue allowing their loan officers to personally determine whether to deal with particular customers. This was due to the complex calculations that went into credit scoring and the banks not understanding the system. The system also makes it difficult for banks to have the final say on whether to do business with certain individuals.

Spread

Credit scoring system spread despite some early reluctance on the part of certain businesses because of its efficiency. The system allowed businesses to quickly, cheaply and accurately predict whether customers would handle debt responsibly. The system's spread accelerated in 1974 because the cheap screening process made it less expensive for banks to issue credit cards. It spread even faster in 1995 when Freddie Mac told other mortgage lenders about the benefits of using the credit scoring system.

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My Credit Score Dropped After Applying for a New Line of Credit

Credit is essential in building a solid credit rating, although applying for the credit may damage your score. Despite this quandary, garnering approval can significantly improve your rating if you make your payments on time and don't go over your limit. The impact of a new line of credit ultimately depends on how you handle it.

Credit Inquiry

Applying for new credit usually drops your credit score up to five points because of the credit inquiry. Any time you apply for credit, the creditor reports the application to the national credit reporting agencies. While the credit bureaus only factor in inquiries into credit rating for one year, six or more inquiries on a credit history is almost as bad as a bankruptcy, according to the Fair Isaac Corporation, or FICO.

Length of Credit History

Opening a new line of credit negatively impacts the average age of your accounts -- worth 10 percent of your credit rating. For example, if you have just one account for the past 10 years, you have an average age of 10 years on your accounts. A new account drops the average age of your accounts to five years. The FICO credit scoring formula considers the average age of installment accounts, such as auto loans and mortgages, and lines of credit, such as credit cards and home equity line of credits.

Debt

You may have some charges on your new line of credit before you make a purchase. For example, if you open a credit card with an annual fee, the lender may put the fee on your balance as soon as you open the account. If you have a department store credit card and open it in connection with a purchase, you will have additional charges on your first statement. Debt counts for 30 percent of your credit rating.

Tip

If you know someone with excellent credit, you can request that he co-sign on an account. Co-signing on an account usually avoids the credit inquiry. However, you must ensure that you pay the bill on time, as missed payments and other derogatory items will appear on both your credit histories. If you apply for a line of credit on your own, it should help your rating as long as you keep your balance low and never miss your monthly payment.

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Does Credit Card Debt Affect Your Credit Rating?

Credit card debt affects your credit rating in a variety of ways. In general, irresponsible use of credit cards will negatively impact your credit scores. The direct effects of credit card use are broken down into a variety of more specific categories used to compute your credit score. The FICO scoring model, used by all three major credit reporting bureaus, has five basic scoring areas, according to the MyFICO website.

Credit Scores

Equifax, Experian and TransUnion are the reporting agencies that lenders use for individual score reporting. Credit scores are used by lenders to gauge the creditworthiness of borrowers seeking new loans and favorable credit terms. Your credit history and length of credit history, amounts owed, new credit and types of credit are all used to compute your score. Credit card use has possible implications for each of these areas of your score.

History Effects

For many people, credit cards are a major element of establishing a consistent payment history and length of credit history. Carrying cards for several years and making on-time payments consistently over that period strengthen your credit rating. These two components account for 50 percent of your credit score, the MyFICO website reports. One of the worst things you can do to your credit rating is to make late payments on your cards.

Amounts Owed

The amounts owed section of your credit score includes several items that ultimately depict a comparison of your credit in use to your available credit. This is known as your debt utilization, and it accounts for 30 percent of your score in the FICO model. Lenders are especially concerned with the amount of available credit that you are using, because it offers insight into your intentions with new credit. If you have a high level of debt use, your new request usually appears as a desperate move to stay ahead of your debt.

New Credit and Types

The new credit category of the scoring model includes such items as new credit inquiries, recent accounts opened and the length of time since your last inquiry. Making numerous credit card applications in a short time span is not usually good for your credit score as it can take a few points off your score. The types of credit category considers your level of credit card balances relative to other types of debts, such as mortgages and car loans.

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How to Rebuild Good Credit After Having Bad Credit

Bad credit is a financial setback, but the FICO credit score company explains that it doesn't have to be permanent. You can start rebuilding good credit immediately if you are capable of paying your bills and managing your accounts. It may take months or years to fully restore your credit score, but good credit will enable you to easily get loans and credit cards and to qualify for the most attractive terms and interest rates.

Instructions

1

Calculate a budget that allows you to make on-time payments to all of your accounts every month. Your payment history carries the most weight in your credit score, according to FICO. Cut back on voluntary expenses so you can pay at least the minimum amount due. Pay more towards high interest accounts if you can afford it to reduce the principal more quickly. Lower balances also help rebuild your credit.

2

Set up automatic payments for your loans, credit cards and other bills if your bank allows it. Otherwise you might forget to send a check or the payment might be delayed in the mail. Just one late payment harms your credit rebuilding efforts, FICO advises. You eliminate this possibility almost completely with automatic payments.

3

Dispute every mistake that hurts your credit. Bob Sullivan, an MSNBC.com columnist, states that between 16 and 25 percent of credit reports have potentially harmful errors. The three major credit bureaus do not review your reports for mistakes, but the Fair Credit Reporting Act, or FCRA, lets you do it yourself and dispute the inaccuracies. Equifax, TransUnion and Experian all have forms on their websites for error reporting. They must investigate your claims within 30 days and correct or remove unvalidated items.

4

Use old credit cards once or twice a year instead of closing them. FICO looks at the length of time you've had credit, and older accounts help raise your score. Consumer radio and television show host, Clark Howard, recommends leaving old, unused accounts open and using them periodically for small transactions to keep them active. Pay the bill as soon it you get it.

5

Maintain credit card balances well below your overall credit limits. FICO explains that part of your credit score is based on the ratio of amounts owed and available credit lines. You will rebuild good credit by keeping your balances reasonable.

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How to Build Up Credit As a Student

After college, you may need to take out a loan to buy a car, get approval to rent an apartment after a credit check or even need a mortgage. Building your credit score while a student will improve your chances of getting approved for loans and possibly building a good credit score. A good way to build credit is to take out credit cards in your name, so long as you limit the balances you carry and try to pay on time.

Instructions

1

Become a co-account holder on a credit card with your parents, assuming they pay their bills on time. When you are listed as an account holder, the account information is added to your credit report even if you do not make any of the charges. In addition, you will have a longer credit history, which helps your credit score.

2

Apply for your own credit card. A credit card law passed by the federal government in 2009 requires you to be at least 21 years old or show proof of income to get a credit card in your own name. If you do not meet these requirements, you must have a cosigner. If you cannot get a regular credit card, such as a Visa or Mastercard, apply for a credit card offered by a retail store as these cards may have a lower credit limit but will still help build your credit history.

3

Make all of your payments on time for credit cards and other debts like student loans. Each on-time payment adds to your positive credit history. If you make a late payment, your credit score will suffer.

4

Pay off as much of the balance as you can each month. Part of your credit score is dependent on how much debt you carry and how much of your available credit you use. So the lower your balances the better.

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How Do Credit Checks Work?

Every time you apply for credit or insurance, the company you approach checks your credit file to determine how much of a credit risk you are. Your credit file contains information about how much money you owe to other lenders and how you've managed your accounts. When you apply for new credit, the provider runs a credit check to see if you meet their lending criteria.

Application

When you apply, you submit detailed personal information about yourself, and anybody else you're financially linked to if you're making a joint application. You'll need to supply any previous names or aliases you've been known by and any previous addresses where you've lived. You'll also need to submit details about your income and any outstanding debt you have if you're applying for credit.

Lending Criteria

Once you've applied, your details will be checked electronically with credit reference agencies. Financial companies use a complex formula to assess your eligibility which is, in the first instance, fully-automated. Your credit score, how much money you owe and how you've managed your existing accounts will be used with the information you submitted in your application to decide whether you qualify. You may be turned down for credit even though you have a good credit score due to a company's lending criteria. If you have an excellent credit score, but the company you've applied to can see that the loan may take up most of your disposable income, they're likely to turn you down.

Decision

The result of a credit check, in most cases, will be available within seconds. If you're applying in a store, you could face the embarrassment if the sales staff says your credit check has been turned down. If you make an application online, some companies prefer to write to customers that have failed a credit check with the bad news rather than displaying the results instantaneously. In some cases, your application may need to be checked manually if there are details that don't tally with your credit file. Under these circumstances, you could be asked to submit further information to support your application.

What Next?

If your application has been successful, great. If not, it's a good idea to check your credit report to make sure there's no mistakes or false information dragging your score down. If there's not, think carefully before you apply for anymore credit, every application you make will leave a mark on your credit file that can bring your score down. If there is an error, talk to the credit reference agencies and the company to which the error relates to put things right.

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Ways to Get Credit

Credit scores can affect every aspect of your life, from where you live to the job you do. The three-digit credit score held by the three main credit bureaus must be kept above 700 for a person to get credit from various companies. Here are a few ideas of how to get credit and keep your credit score healthy.

Credit Scores

Credit scores are calculated and held by the three credit bureaus: Equifax, Experian and Trans Union. Credit scores run from 300 to 850. A score below 700 gives the consumer a slim chance of being accepted for loans and credit cards.

There are two easy ways of keeping a credit score healthy. The first is to make sure all utility bills are paid on time. The second is to keep the use of available credit lines to a maximum of 30 percent of the available balance; for the best credit score, keep the use of credit down to 10 percent.

Credit-card companies are more likely to take a risk on an unsecured credit card with a consumer while they are a college student; companies are willing to take the risk because they believe family members are more likely to help out if the consumer runs up high debts on the card. Taking the time to find a card with the smallest possible annual fee and low interest rates will pay off in the long run.

Credit Cards

An easy option to get credit is to use another person's credit history by finding a co-signatory for a loan or being added to an existing account with a credit-card company. Finding a family member to take the risk of adding a consumer to a credit-card account will transfer some of the account holder's credit history to a consumer's credit report, which will hopefully raise the credit score.

Companies and stores that offer credit via store cards work a little differently; they usually lend money through a finance company rather than through a bank. These cards do not help a credit score as much as bank credit cards, but they are easier to get and help build credit in the long run.

If a low score makes it difficult for a consumer to get credit, a secured credit card is a good option. These cards require the consumer to deposit money with the lender, giving the consumer a credit limit usually the same as the money deposited. It is possible to find a secured card that reverts to a regular unsecured credit card after 12 to 18 months of on-time payments.

Banks and Loans

Credit companies see checking and savings accounts with banks and credit unions as a sign of stability. Opening a bank account at the youngest age possible is one of the simplest steps to creating a stable financial future and start building a financial history. Once a history of regular payments with a credit card has been established over 12 to 18 months, a consumer can apply for a small installment loan with a bank or credit union. Securing a small personal or auto loan is a good way of getting credit and building a better credit score. Mixing different types of credit from cards, banks and installment loans is the best way of increasing a credit score and in the future making it easier to get credit.

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Repairing Credit to Buy a House

Buying a home often calls for a credit score of 680 or higher. Lenders use credit scores to assess whether an applicant qualifies for a home loan. Credit scores provide a good indication as to whether applicants will repay the funds as agreed upon. Thus, it's wise to repair a low credit score prior to buying a home. Not only does this help applicants get a loan approval, but having a higher credit score also helps them secure a better rate on the mortgage loan.

Instructions

1

Fix a bad payment history. Lenders will not approve your mortgage loan application if your credit report reveals several missed or late payments. Start paying all your bills on time. This improves your payment history and increases your credit score.

2

Pay off credit card debt. Credit card balances affect credit scoring. Repair your credit and raise your score by keeping balances below 30 percent of your credit limit. Completely pay off the cards or simply pay down your balance to improve your chances of qualifying for a mortgage loan.

3

Develop a plan to pay off old accounts. Ignoring delinquent accounts such as collection accounts can hurt your credit rating and lower your chances of buying a house. Call up old creditors and set up an arrangement to pay off these debts. Ask your creditor to remove the delinquency from your credit report once you've paid the debt.

4

Familiarize yourself with your credit report. Order your credit report from Annual Credit Report before applying for a mortgage to check for erroneous information, such as charge-off, judgments, liens and collection accounts, that can lower your credit rating. Write the credit bureaus or contact the reporting creditor and ask them to investigate reporting errors and remove mistakes.

5

Stop applying for new accounts. Each application for a new line of credit or credit card results in a credit inquiry, and inquiries take points from your credit score. Avoid applying for credit until you're ready to begin the mortgage loan process.

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Why Do I Have to Pay for My Own Credit Report Information?

Some consumers may feel it is an injustice that they must pay for information on their own financial history, but you do not always have to pay for it. Congress agrees with you and forces the major credit rating bureaus to give you at least one free report a year.

What are the Credit Bureaus?

The major credit reporting bureaus -- Experian, Equifax and TransUnion -- are private companies, despite often carrying the label "national credit bureaus." The Fair Credit Reporting Act lets these companies collect and view your sensitive financial data. Most of this information comes from your own lenders, who pay a subscription fee to report history on your accounts. If the bureaus did not charge money to collect, update and maintain their files, they could not stay in business.

Considerations

In 2003, Congress amended The Fair Credit Reporting Act to allow consumers to access their credit profiles for free once a year from each credit reporting agency. Just make sure you only go to AnnualCreditReport.com. Other websites, even the sites of the major bureaus, can legally charge you up to $10.50 for your credit report as of 2011. Also, the FCRA does not require the agencies to divulge your credit score rating.

Alternative Bureaus

In some cases you may have to pay to report information to a credit bureau, just like a lender. Alternative credit bureaus charge customers, but only because they must spend time and resources verifying your payment data. Alternative bureaus exist to rate the creditworthiness of people who do not have a traditional score. Rent, utilities and private loans usually do not appear on a consumer credit report from Experian, Equifax or TransUnion, so it is possible to pay bills on time every month, but have no traditional credit score.

Tip

The credit bureaus must furnish an additional free credit report every time you dispute an item and the agency changes your report as result of the claim, according to the Federal Trade Commission. You can receive additional free reports if you are unemployed and plan to apply for jobs in the next 60 days, on welfare and/or have been victim of fraud or identity theft that shows up on your report.

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Does Paying Child Support Lower Credit Scores?

The Department of Health and Human Services had to assist in 15.9 million child support cases in 2010, according to the HHS website. Not only do cases of child support arrears make it difficult on the supporting spouse to raise the child, the person in arrears may damage his credit rating. Thus, if you have court-ordered child support payments, you should do whatever it takes to satisfy them.

Identification

Paying child support does not raise your credit score, but it also prevents child support arrears from damaging your credit rating. If you stop paying child support for more than 180 days or owe more than $1,000, your state department of social services usually reports the debt to the national credit reporting agencies. A delinquent account can damage your credit rating by 100 points or more, and child support court judgments stay on your report for seven years.

Considerations

Voluntarily paying child support means your creditors are less likely to deny you credit. Creditors periodically check your credit report to ensure you are still creditworthy. Delinquent child support could cause the lender to lower your credit limit or close your account. A court judgment could result in a wage garnishment which makes it harder to pay your bills or could cause you to default on your loans.

Child Support Collection Account

Delinquent child support debt sent to a collection agency can come off your report much sooner than a civil judgment. If you ignore a child support collection account, it stays on your report for seven years, but if you pay it off the credit bureaus must remove it from your credit history immediately, according to LegalMatch.

Tip

If you cannot afford your child support payments, contact your state's child support enforcement unit about modifying your payments or working out an installment agreement. You can also go to the judge handling your case and ask him to lower your monthly payment if you have a good reason, such as the judge set the payment too high for your income.

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Steps to Erase Negatives on Your Credit Report

Negative information on your credit report affects the interest rate on your mortgage, car loan and credit cards. In some cases, it prevents you from accessing credit. It shows lenders that you are a risky borrower undeserving of trust. Ideally, you'd never miss a payment, get disorganized or fall behind. In the real world, people are striving to pay down debt, save more money and improve credit scores.

Obvious Inaccuracies

Order copies of your report from Equifax, Experian or TransUnion to see what you're dealing with. You can get a free copy each year at AnnualCreditReport.com. A 2004 study conducted by the U.S. Public Interest Research Group found that 70 percent of credit reports contained inaccuracies. Furthermore, one in four reports contained serious errors resulting in higher interest rates. Common errors included: incorrect names outdated or confused with someone else (54 percent), closed credit accounts listed as open (30 percent), incorrect reporting of loan nonpayment (25 percent), the same mortgage or loan listed twice (22 percent), missing positive payment history (8 percent) and accounts opened without consent. Dispute inaccurate charges by writing, phoning or emailing any of the bureaus.

Deal Directly with Creditors

In some cases, you see the negative history and know, deep down, that it's all accurate. That doesn't mean you have to live with it. Settle unsecured Visa, MasterCard, American Express and Discover Card debt for a lesser amount than what you owe or establish a reasonable payment plan if you're struggling. If you pay 100 percent of what you owe in one or two large lump sum payments, request that the creditor remove all negative information from your credit report as part of the contingency.

Disputing Mistakes with Bureau

Dispute bogus information on your report online. Click a "Dispute this item" button and enter an explanation of why that information is incorrect or inaccurate. The credit bureau is then required by law to investigate. If your creditors send verification of your debts within 30 days, then the information drops off your account. If the creditors do send proof, nothing changes but you will at least have a detailed explanation for your records. As you can imagine, creditors can be inundated with many requests, so the chances of the debt dropping off your record are fairly good.

Be Patient

Did you know that negative information automatically drops off your records after the statute of limitations has passed? This may sound hard to believe, but generally speaking, late payments, Chapter 13 bankruptcies, foreclosures, accounts in collections and public records expire within seven years, whether you've paid them or not. Chapter 7 bankruptcies can remain up to 10 years, however, and unpaid tax liens may remain indefinitely. The older these negative items get, the less impact they have on your overall credit score, so you can begin improving your history by making timely payments.

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How to Remove Aged Credit Inquiries From a Credit Report

Credit inquiries are recorded every time a potential lender views your credit report. Although inquiries are a necessary evil, too many of them can drop your credit score. Multiple inquiries, especially during a short time period, show new credit grantors that you are looking to take on more credit. Most of the time, hard credit inquiries will drop off a credit report after two years. If aged inquiries are still lurking on your credit file, take steps to have them removed.

Instructions

Instructions

1

Order your credit reports from each of the major credit reporting bureaus: Equifax, Experian and TransUnion. Each American consumer is eligible to receive one free credit report each year from each of the three bureaus. If you have not yet ordered a credit report for the year, request the free one. Otherwise, credit reports can be purchased directly from the bureaus for a minimal charge.

2

Look over your credit reports from the three reporting bureaus and determine which inquiries you want removed. Inquiries nearing the two-year limitation will drop off on their own shortly. If any inquiries older than two years remain, mark those for further investigation.

3

Record the addresses of each lender that made an old unwanted inquiry. The addresses may not appear on all of your credit reports, but by cross-referencing the three reports you should be able to find the information you need. If no address is listed, call the credit bureau to ask for the lender's mailing address.

4

Write letters to each of the inquiring lenders. The letter should explain that the inquiry is more than two years old. Mention that the Fair Credit Reporting Act requires that only authorized inquiries be reported on a credit file and they should drop from the report two years from the date of the inquiry. Mail your letters via certified mail with return receipt.

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Will Taking Care of Collections Make My Credit Score Higher?

Seriously delinquent credit cards, loans and other accounts are often turned over to collection agencies. This lowers the consumer's credit score considerably, according to FICO, a major credit score provider. Taking care of collection accounts by paying them off does not necessarily undo the damage. Extra steps are necessary to repair the credit score.

Definition

A collection account is an unpaid account that has been charged off and turned over to a collections department or agency, Liz Pulliam Weston of MSN Money explains. When someone stops paying on a credit card or other unsecured debt, the creditor eventually writes it off in its records and reports it to the credit bureaus as a charge-off. Often it gives the charged-off account to its own collections department, hires a collection agency or sells it to an outside agency. This entity reports the negative information to the credit bureaus.

Time Frame

Pulliam Weston advises that many banks and other creditors charge off an account after six months of skipped payments. The account itself, including information on its bad status, remains on the consumer's credit report for seven years and affects the credit score for that entire time frame. FICO states that its influence goes down as time passes.

Solutions

Smart consumers can get collections removed from their credit reports, which raises their credit score, through negotiations. The creditor wants the money and may be willing to stop reporting the delinquent debt to the credit bureaus or report it in a neutral or positive way in return for payment. Pulliam Weston advises asking for a status of "paid in full" rather than "settled" if the collection agency will not stop reporting it entirely. The Credit Infocenter credit repair site recommends pushing for complete removal because "paid in full" still looks bad on credit reports when a collection agency is involved.

Considerations

Consumers should not inquire about collection accounts unless they are prepared to take care of them, according to Pulliam Weston. It takes negotiation to change the way the debt is reported, and the creditor may refuse to make the change. It may then renew its collection efforts because it knows the person who inquired has money and is concerned about credit records.

Warning

Paying off a collection account can sometimes hurt a consumer's credit score, Pulliam Weston warns. The company may promise to stop reporting the collection account or to list it as "paid in full" or some other positive designation, then never follow through. The pay-off makes the problem account seem more recent, which hurts the score. Always get a written agreement about account removal before taking care of a debt with a collection agency.

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How Do I Improve My Credit Now That Bills Are All Paid?

Paying all your bills is just the first step to re-establishing a healthy credit score. It is a terrific first step, and you should be proud of yourself, but also realize you need to establish a lengthy credit history that proves you are trustworthy. Accomplishing this requires avoiding additional debt, maintaining healthy relationships with creditors and acting responsibly. It will take several years before your credit is healthy enough that you can seek a loan or mortgage, but for now, be patient.

Instructions

1

Avoid incurring any additional debt. If you must borrow money, whether through a credit card or a loan, ensure that the balance never exceeds 50 percent of your available credit. More importantly, always pay beyond the minimum balance and never submit a late payment. Just one late payment will dent your credit again and delay the improvement process by additional years.

2

Keep your credit card accounts open. By maintaining relationships with your creditors, you will over time prove to other creditors that you are trustworthy. This will significantly impact your ability in the future to acquire a loan or mortgage. The key lies in not taking advantage of the credit. Tear up your cards if it is necessary to prevent yourself from using the available credit, but do not close the accounts.

3

Act with caution when seeking additional credit or a loan. If you require additional money for an emergency procedure or a house purchase, avoid submitting too many applications. Also, try seeking money from a bank before you seek it from a finance company or a credit card company, because a bank holds more clout. Never open new accounts just to improve your rating, because you risk actually hurting your rating.

4

Review your credit report for any inaccuracies. If you find incorrect or incomplete information in your report, write a letter to the credit reporting agency that supplied the report and argue your case. Cite every error, provide copies of documents that back up your claims and recommend feasible solutions. Be patient, as it will take at least 30 days for the agency to review your letter.

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How to Remove Bad Information From Your Credit

Inaccurate information on your credit reports can greatly affect your credit score and your ability to get credit. Credit reporting agencies are required to display accurate information on your credit accounts, and get the account information from your creditors. If the creditor is providing bad information, you can file a dispute with the credit-reporting agency. Upon receiving the report, the agency will launch an investigation to obtain the accurate information.

Instructions

Transunion

1

Navigate to Transunion's online dispute website (see Resources).

2

Click the button labeled "First Time? Click Here" to setup a user account. You may already have a user account at Transunion if you use the credit monitoring or annual credit report services. Log in with your username and password.

3

Click "Report Inaccuracy" under the "Credit Report" option on the user navigation bar.

4

Click "Submit Dispute" to open the investigation panel. Click "Request Investigation" by any account that has bad or problematic information on it. Select the dispute reason. Click "Submit" after completing your selections.

Equifax

5

Navigate to Equifax's dispute page on its website (see Resources).

6

Provide your Equifax report number, if you have one. Provide the additional requested information. Click "Submit."

7

Respond to the identity verification questions on the next page. Click "Submit" when finished.

8

Click "Start a new dispute." Navigate to the "Negative accounts" section on your credit report. Click any inaccurate listings and select "Dispute this item." Click a reason for the dispute and click "Add Dispute."

Experian

9

Navigate to the Experian website and its Credit Dispute Center (see Resources).

10

Order an Experian credit report, if you haven't obtained one within the past 90 days. Several Experian report ordering options are given on the page, with options ranging from free for the annual report to a subscription for the reports that come with online credit-monitoring services.

11

Click the option labeled "Yes, I have a credit report number" and click "Submit."

12

Input the credit-report number and information for any field marked as required. Click "Submit" once you have completed the form. The Experian credit report appears on the screen. Click "Dispute this item" by any account that you feel is inaccurate or has bad information. Provide the nature of your dispute and click "Submit your dispute."

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Does Having a Co-Signer on a Car Hurt Your Credit Score?

When your credit history is less than stellar, you can still obtain a loan with the help of a co-signer, which is someone who agrees in writing to repay your debt if you are unable to. Sometimes, especially in the case of expensive car loans, you may be required to have a co-signer if your credit history is insufficient or poor. Knowing how co-signing affects both the buyer and the co-signer is essential to making a decision on obtaining a car loan.

What a Co-Signer Will Do

Having a co-signer wont affect your credit score one way or another. Instead, having someone co-sign on a car loan may help you obtain a better interest rate because the lender will factor in the co-signers credit history. If you are confident that you will be able to make regular payments on your car loan, having a co-signer to give you an extra boost in the beginning may be the key to bridging the gap between poor or nonexistent credit and good credit. In effect, having a co-signer may actually help increase your credit score in the long run.

Having a Co-Signer

While having a co-signer wont negatively affect your credit score, it has other risks. If youve been told by a potential lender that you need a co-signer, consider your other options. Needing a co-signer may be a signal that the loan is too expensive for you altogether, and it may be smarter to wait until you can afford the loan. Even if you do find someone to co-sign, your interest rates may be still be high and your payments unmanageable.

What Affects Credit Score

If you want to improve your credit score, knowing what does affect it may be helpful. According to the leading credit scoring company, FICO, what weighs the heaviest on your score is your payment history. If you make timely payments on all of your accounts and pay your required balances, your score will improve. Also, keeping your debt low, having a long credit history, opening new lines of credit and having different types of accounts will all boost your credit score.

Risks for a Co-Signer

Your co-signer takes a much bigger risk than you do when co-signing on your car loan. If you miss a car payment, your lender will expect your co-signer to pay it. Even if youve demonstrated good money management, you may still deal with hardships like losing your job or getting sick in which case your lender will also expect your co-signer to take on your debt. If your co-signer isnt able to back you up, his credit score will take the hit, and your relationship with the co-signer may suffer as well.

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How to Get Credit Scores from All Three Reporting Agencies

Reviewing your credit reports from all three of the nationwide bureaus will give you a complete view of your credit history. Reviewing all three reports instead of only one is a smart move because not all creditors report to all three agencies. That means a delinquent credit account showing up on your Equifax credit report might not appear on your TransUnion or Experian report. Federal law entitles you to three free reports every 12 months, including one from each of the bureaus.

Instructions

1

Get one credit report from the website Annual Credit Report. (See resources.) This is the site the credit bureaus set up to offer the free reports as mandated by the Fair Credit Reporting Act. Order from the site for immediate access to your Experian, TransUnion or Equifax report. Or see instructions on the home page for ordering by phone or through the mail.

2

Wait four months and order a second report from another of the credit bureaus.

3

Order a report from the third agency in another four months. Staggering the requests in this way will allow you to check your credit three times a year for free. Or request all three of your reports at once on your first visit to Annual Credit Report.

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Can I Report A Higher Credit Score?

Your credit score is a summary of your credit history and a gauge that helps measure your future likelihood to repay loans. You may need to provide your credit score when you apply for a mortgage, buy a car, rent an apartment or get a job. While you can't report your own credit score, there are steps you can take to ensure your score is accurate and make it as high as possible.

Credit Reporting Agencies

Three different consumer credit reporting agencies have the authorization to track your financial transactions and compile a credit score. The three agencies are Equifax, Experian and TransUnion. The Federal Trade Commission regulates credit reporting and requires these agencies to offer free credit reports to all consumers once a year, though credit scores typically require paying a fee. When someone requests your credit score, it contacts one or all of the credit reporting agencies and uses the three numbers, which are usually very similar, to make a determination on your application.

Reporting

Only credit scores from the consumer credit reporting agencies are valid. In addition, they only refer to a consumer's credit score at that specific point in time. Credit scores do not indicate if your score was recently higher or lower, nor do they predict future changes. Even if you've ordered your credit score in the recent past, lenders will still want to request your credit score themselves to ensure they get the most accurate, up to date information. If the score they receive is lower, you may not submit your older, higher score instead.

Accuracy

Each consumer credit reporting agency has its own methods for determining your credit score, but mistakes are still possible. If you have any reason to believe that you've been a victim of fraud or identity theft, or that a recent credit score was lower than it should have been, you can contact the credit reporting agencies directly to request free credit histories. These reports include the information that goes into your credit score. Check for accounts or transactions that you don't recognize. While you may not be liable for actions someone else performs using your identity, your credit report can suffer without you knowing it until you investigate.

Improving Your Score

Even without a case of fraud or identity theft your credit score can fall due to missed payments, excessive borrowing or major events such as repossession of property, bankruptcy and foreclosure. To get the credit reporting agencies to report the highest credit score possible, always pay your bills by the due date. Don't apply for too many loans, including credit cards, in a short time frame, as this can lower your score. Finally, avoid maxing out your credit cards to improve your credit-to-debt ratio, which will also help increase your credit score.

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How to Raise Your Credit Score and Repair Bad Credit for Free

Your credit score is more than just a number. Even if you are not applying for a line of credit, a bad credit score can haunt you. Employers and insurance companies often require credit checks. A good credit score proves you are reliable enough to pay back borrowed money. Poor credit indicates a risk for lenders. It is never too late to improve your score, and you can do so free of charge. Consistency is key.

Instructions

Fix Your Credit Report

1

Obtain a copy of your credit report. The Federal Trade Commission recommends consumers visit annualcreditreport.com to request a credit report from Experian, Equifax and Trans Union. Your credit score is not included in the free report. You can pay extra to receive your score, but it is not necessary. You can still use the information in your free credit report to boost your score.

2

Identify errors or discrepancies of your credit report. Look for any accounts you do not recognize or have paid off. Check the amount of the account balances to ensure they correspond to what you have in your records. Some debt might even appear multiple times if it was sold to different collection agencies.

3

Dispute any information that is not correct. If you see debts that are not yours, contact each credit bureau to launch an investigation. If the creditor does not provide sufficient evidence that you owe the debt, it is deleted from your report. If you notice account balances that are incorrect, contact the creditors directly to have them correct the errors.

Repair Your Credit Score

4

Catch up on any late payments or old bills. You need to get current on all debts and bills to repair your credit score.

5

Pay down the balances on credit cards you have. Avoid using these cards until you have your credit utilization rate below 30 percent. For example, if you have a credit card with a $1,000 credit limit, you should keep the balance below $300. To improve your score, apply extra money towards your credit card bill each month. The lower your balances, the higher the credit utilization rate. Your debt to credit limit ratio is 30 percent of your credit score. If you tend to use one card often, try dividing your spending among different cards.

6

Open a new account to establish or rebuild credit. One of the fastest ways to rebuild credit is by using a credit card responsibly. Prove your ability to control your spending and pay off the debt as agreed. Credit cards are available regardless of your credit score or history. For example, you can get a secured credit card as long as you supply a cash collateral deposit that works as a kind of credit line. Your credit limit is equal to the deposit you provide. Unlike a prepaid card, you need to pay off the debt by making monthly payments. The deposit is only used if you default. Buy a few items and make timely payments to help improve your credit score.

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How to Boost Your Credit Score Extremely Fast

Boosting your credit score is beneficial for numerous reasons. When applying for a loan or financing, lenders take your credit history and score into consideration. Ideal applicants include persons with a high or acceptable credit history. They receive the best financing package and easy approvals. But even if you have a low score and cannot presently qualify for the best rates, there are ways to boost your FICO score quickly.

Instructions

1

Help your score by paying creditors on time. Skipped or missed payments demonstrate a level of irresponsibility, and this habit destroys your score. Resolve to submit timely payments. Pay your bills online to avoid a late arrival, and if you are having financial problems, contact your lender to establish a new payment arrangement.

2

Pay down or eliminate your debts. When reviewing your credit history, potential lenders take your debt amount into account. High debts usually equal a lower score. Quickly boost your credit score by completely eliminating your outstanding debts. Use money from savings or cut back on dining out, entertainment and vacations.

3

Reduce credit inquiries. Credit inquiries lower your credit score. Apply for credit when necessary, and avoid opening several new accounts within a short time span.

4

Improve credit with a secured credit card. Apply for a secured credit card through your personal bank or credit union. Secured accounts do not require good credit; anyone with a security deposit can qualify. Use this account to build credit or re-establish credit after a mishap such as bankruptcy.

5

Get your credit report. Everyone is entitled to one free credit report a year. Order a copy from Annual Credit Report, and check the report for discrepancies that can lower your score, such as unfamiliar accounts or reporting errors.

6

Pay off collection accounts. Older delinquent accounts on your credit report are damaging. Contact old creditors and make arrangements to pay off judgments or collection accounts. If you do not have money to pay off the entire balance, ask about monthly payments.

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What Happens on My Credit Report if I Pay Everything Off?

Your credit reports reflect every loan and credit card payment you make. The Equifax, Experian and TransUnion credit bureaus also show your owed balances and update them regularly as you pay them down and raise them with new purchases. Eventually, if you keep paying and do not use any more of your credit, your balances reach zero. Your lack of debt is visible to lenders who review your reports.

Credit Report Information

Your accounts do not disappear from your credit reports when you completely pay them off. Your credit reports still list data like the dates the accounts were opened, your past high balances, the credit limit and all of your payments. Lenders see if you always paid on time or if you were ever late while paying off the balance. Paid-off accounts with no negative information stay on your reports indefinitely if they remain open, the Experian credit bureau explains. Accounts with negative activity, like delinquent payments, drop off in seven years.

Effects

High debt hurts your credit rating, while paying off accounts is an excellent way to raise your credit score, according to MSN Money writer Liz Pulliam Weston. Focus on paying off revolving accounts first, as installment loan debt is less detrimental than credit cards. Your credit score goes up once you reduce your debt load to less than 30 percent of your available credit lines. Lenders know when you reach that point because they see your balances and spending limits on your credit reports.

Maintenance

Your good credit rating requires maintenance once you pay off all of your bills. Lenders want to see some activity so they know you are currently capable of managing accounts and making payments responsibly. Pulliam Weston recommends regular, light credit card use. Buy a few things and pay the bill in full every month to maintain your zero balance. Do not rack up high debt during the month, even if you pay it off within 30 days, as Pulliam Weston warns that it temporary high balances still hurt your credit score.

Considerations

Your credit card issuers cannot legally impose a penalty if you stop using your accounts once you pay them off. The Credit CARD Act bans inactivity fees, according to the Board of Governors of the Federal Reserve System. Banks can still close unused accounts, so buy something every few months on each account to shield yourself from involuntary closure.

Confirmation

Confirm that your credit reports show all your balances as zero once you pay everything off by ordering free report copies through AnnualCreditReport.com. Equifax, Experian and TransUnion each allow you to order one free copy every 12 months through that site, according to the Federal Trade Commission. Call any bank or other lender that is not reporting your debt as paid in full and ask it to send an update to the credit bureaus.

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How to Raise a Credit Score in Eight Months in Order to Buy a Home

There are numerous factors to take into consideration before jumping into the housing market: down payment, fees, points and so much more. However, before you get too deeply into the process, your lender will first review your credit report and history to determine if you're a good candidate for a mortgage. If you are dealing with a shaky credit history, now is the time to improve your credit and add points to your score.

Instructions

1

Evaluate your credit. Don't begin your home search blindly. Request a copy of your credit report and credit score from websites like Annual Credit Report and MyFico.com. Credit score minimums vary according to lender. Aim for a score in the 700s to help you secure approval and a low interest rate.

2

Learn how to manage your debts. High debts can impact your purchasing power, qualifying you for a lower mortgage. Thus, take steps to pay them down. Use personal savings, create extra income with second employment or alter your lifestyle to increase income.

3

Pay bills on time. Even if you have the income to qualify for a mortgage, late payments or skipped payments look bad on your credit report and lower your score, perhaps resulting in a loan denial. Pay your credit cards, loans and other creditors on time each month.

4

Keep credit cards and other personal information in a safe, secure place. Closely monitor your credit report and look for signs of identity theft. Report unusual activity on your credit card statements and dispute credit report errors.

5

Reduce credit applications. Excessive credit applications or inquiries also lower your credit score and could also result in mortgage lenders denying your loan request. Decline all store credit offers and put off applying for credit until it's time to apply for a mortgage.

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Is it True That a Credit Report Only Shows Violations That Are $50 or Greater?

When it comes to credit reports and credit scoring, there are a lot myths and misconceptions floating around out there. Some people mistakenly believe, for example, that only debts above a certain dollar amount are included on reports. This is not true. In fact, even the smallest unpaid debt can be listed on your credit report and end up damaging your credit score.

Creditors

A creditor is anyone to whom you owe money. This list not only includes traditional lenders such as banks or credit card companies, but also includes such organizations as municipal governments that have cited you for a parking violation or even public libraries to whom you owe a late fee. Even small dollar amount parking fees and similar debts can appear on your credit report, according to CNN Money.

Checking Your Reports

Every consumer has the right to review credit reports every year. The Federal Trade Commission has authorized annualcreditreport.com as the only site to provide each consumer with free yearly credit reports. Your reports will list all the information reported to the three credit reporting agencies by your creditors and may include information about the size of the debt as well. While you can have incorrect information removed, you cannot remove accurate information.

Reporting Process

Three companies maintain consumer credit reports: Experian, TransUnion and Equifax. When a creditor wants to add information to your credit report, it has to report the information to one of these companies. Creditors don't always report information to these companies, nor do they always report to all three. The frequency with which creditors report debtor information and the kind of information they report differs by creditor. While some creditors may not report debts unless they are of a minimum dollar amount, others may report all information automatically.

Collections Agencies

One common method by which low debt amounts might appear on your credit report and hurt your credit score is when a creditor hires a collection agency to collect a large number of debts. For example, a municipal government might hire a collection agency to collect all unpaid library fines. The collection agency typically reports to a credit reporting company, and once the municipal government hires the agency, the agency reports all delinquent accounts regardless of the size.

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Will a Collection Agency Remove Their Information From My Credit Report If I Make a Payment?

If you have a debt that has been placed with a collection agency it is still a good idea to pay it off. Any paid account on your report will help. Not all collection agency reports are the same and not all debts that they attempt to collect are owned by the agency. A person's credit report shows the status of debts, and who holds the debt. So if a debt has been referred to a collection agency it will show as a collection account.

Collection Agencies

Some "debt collection agencies" are just collection branches of the creditor set up in the belief that you'll take them more seriously. Actual agencies buy the debt from the creditor or try to collect it on commission. Some of the debts they buy are charge offs, debts the creditors have written off the books, in hopes of collecting more than they paid for it.

Reporting Debts

As long as a debt is owned by the original creditor they are the ones who report the debt and can make changes to how the debt is reported to the credit agencies.

If a debt is owned by a collection agency after the original creditor charges it off, then the collection agency reports payments and payoffs to the credit agencies.

Payments to Collection Agencies

Making a payment to a debt collector, even one paying off a debt, won't take the record off your credit report. Payments will show on your report and your total amount of debt shown will decrease.

All credit files stay on your report for seven years since the last activity, due to Fair Credit Reporting Act guidelines. Phone calls to the creditor or collection agency won't get the debt taken off of your credit report..

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Can Breaking a Lease Affect Your Credit Score in New Hampshire?

A tenant may need to break a lease because of relocation, changed financial circumstances or personal reasons. In some cases, the property owner may decide to sue the tenant in the New Hampshire courts to get compensation for financial losses resulting from the broken lease. A judgment in favor of the property owner may affect the tenant's credit score. Therefore, a tenant who needs to break a lease in New Hampshire should try to negotiate the terms of departure.

Lease Terms

The terms of a lease sets forth the rights of the tenant and property owner. For a month-to-month rental, the tenant may end the lease at any time, as long as she provides proper notice. For a fixed-term lease, however, New Hampshire law requires certain procedures, depending on which party breaks the lease terms. When the tenant breaks the lease, state law seeks to protect the rights of the property owner, unless the tenant can prove that the property owner also failed to meet significant obligations of the lease.

Early Termination

The consequences of breaking a fixed-term lease depend on the lease terms and the tenants relationship with the property owner. If the fixed-term lease gives the property owner certain rights when the tenant breaks the lease, such as rent payment until a new tenant moves in, the tenant's liability for rent may continue even after the tenant moves out. Although the property owner may have a responsibility to lessen his financial losses by making efforts to find another tenant, he may still be able to sue the tenant for unpaid or lost rent. Furthermore, if the tenant tells the property owner that she wishes to break the lease and ceases payment of rent, but continues to live on the property, the property owner may initiate eviction proceedings under Chapter 540 of the New Hampshire statutes. The New Hampshire Legal Aid organization suggests that the tenant avoids a lawsuit filed by the property owner in the New Hampshire courts, as a court judgment may affect the tenant's credit score.

Credit Report Information

According to the Federal Trade Commission, an individual's credit history includes information from civil lawsuits, which are a matter of public record. If a property owner sued a tenant upon early termination of a lease, a judgment issued by a New Hampshire court against the tenant may appear in the tenant's credit history. To affect a credit score, the lawsuit must result in a judgment against the tenant for unpaid rent or other money.

Effect on Credit Score

A judgment issued by a New Hampshire court will remain on the tenant's credit history for seven years after the filing date. Although credit bureaus will normally include descriptive information when preparing a tenant's credit report, its difficult to say how much the judgment will affect his overall score. You may need to review the specific provisions of the Fair Credit Reporting Act, or speak with a consumer-rights attorney in New Hampshire, if you're concerned about how a specific judgement against you will affect your credit.

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