How to Update an Equifax Tradeline

A low credit score can create higher interest rates that will cause you to spend more money for an item over the course of several months or years. Keeping your Equifax credit report as well as your TransUnion and Experian credit report up-to-date will ensure your credit score and other information remains accurate. If you do find inaccurate information or specific accounts that need to be updated, properly contacting Equifax will allow any updates on your credit report to be efficiently handled.

Instructions

1

Obtain a copy of your Equifax credit report. Even if you know the tradeline that needs to be updated, you still need to have it to efficiently update the information. You can contact Equifax to order your credit report or you can access your credit report online. You can also use sites like Annualcreditreport.com and Freecreditreport.com to access your credit report.

2

Locate the tradeline that needs to be updated and list the account number, name of the creditor, amount, and other details, so Equifax can identify the tradeline.

3

Write a letter to Equifax explaining the update. Reference the tradeline information you recorded as well as any proof, such as copies of bills, data, or identification to validate the update. Conduct an online dispute requesting an update to the tradeline if you ordered your credit report online.

4

Include the credit report reference number, which is located on the right corner of each page of your Equifax credit report, so they can access your records.

5

Send the letter requesting the update to Equifax via certified mail. Based on the Fair Credit Reporting Act, Equifax has between 30 and 45 days to respond to and fix the problem on your credit report. Sending the letter by certified mail proves Equifax has received the letter, and a signed receipt will be sent back to your home. Equifax will send you an credit report reflecting the update.

Read More

Is There a Point Reduction When You Check Your Credit?

Inquiries into your credit report could reduce credit score if the inquiries make it appear you are seeking more credit. The act of checking your credit never hurts your score, however, and it may help prevent identity theft and could enable you to detect negative or erroneous items before they do more damage. You can perform this check for free once a year, but you may have to pay to get a more detailed picture of how lender's view your report.

Theory

Some may be led to believe checking your own credit reduces your credit score, because an inquiry is noted on a credit history whenever the credit is checked, whether it affects your credit score or not. If you check your score frequently, especially through a third-party credit monitoring service, it could appear you need credit because of financial hardship or concern about current debts, even if the inquiry does not lower your score.

Reality

Checking your own credit counts as a "soft inquiry." Soft inquiries appear on your credit report when you pull the report yourself or a third-party checks your credit without your consent. It does not affect your credit score. When you apply for credit, the application generates a "hard inquiry," and that affects your credit score slightly. Soft inquiries only appear to the consumer when he pulls his credit report, so lenders never know how many times you check it.

Benefits

Checking your own credit report can be beneficial before shopping for a loan. You want to review the report for any errors, such as on-time payments reported as being late or the presence accounts you never opened. You also can check your credit to draft a plan to improve your score. If, for instance, you use too much of your credit limit, you may want to address that issue first.

Tip

The federal government requires the three major credit reporting agencies--Equifax, Experian and TransUnion--to provide each citizen with one free credit report each year. You should check your report with each agency, because they do not share information and your three credit reports may differ. The free credit report does not include your credit score. The major bureaus, however, usually provide a credit score if you try out one of their services.

Read More

Benefits of a Credit Freeze

Identity theft is growing, with more than 11 million victims in 2009, according to the 2010 Identity Fraud Survey Report compiled by Javelin Strategy & Research. That number represents an increase of one million people since 2008, Javelin explains. Criminals harvest personal information, then use it to get credit in the victim's name. Clark Howard, host of consumer advocacy television and radio shows, advises that a method called a credit freeze stops this from happening.

Definition

A credit freeze is an action that "freezes" a consumer's credit records so they cannot be accessed without permission, Clark Howard explains. The consumer has a personal identification number (PIN) to temporarily "thaw" the file when an authorized party needs to view it. For example, thaws are needed to apply for loans and credit cards. A thaw is done for a specific creditor or a specified length of time. The files are refrozen once the creditor accesses the information or the time runs out.

Benefits

Most lenders -- other than those already doing business with someone -- cannot access a person's credit records when they are frozen. This keeps criminals from opening any new credit cards or getting loans with a stolen identity because they do not have the PIN. Freezes prevent identity theft and also help victims because their stolen information becomes useless for getting fraudulent accounts.

Time Frame

A credit freeze lasts until the consumer decides to remove it from the files. This is more beneficial than a fraud alert, which is a free service for identity theft victims that alerts lenders to carefully verify any new accounts. An alert only lasts 90 days unless the consumer extends it. The extension is limited to seven years and requires a police report, according to the Federal Trade Commission.

Process

Clark Howard, host of consumer advocacy radio and television shows, explains that separate credit freezes must be done with each of the three national credit bureaus. Experian, Equifax and TransUnion all have forms on their websites for both freezes and thaws, or the process can be done through certified mail. Consumers can either choose their own PIN or the credit bureau can generate it. There is a separate number for each bureau.

Cost

Credit freezes usually have an associated cost, although fraud victims can place them for free in certain states. It generally costs up to $3 to $10 to place a freeze and a similar amount to temporarily thaw the records for a credit check, according to Clark Howard. Some states mandate no-cost or reduced price freeze for senior citizens.

Read More

A Company's Right to Pull Credit Reports

A company can deny you employment because of your credit report. A company has the right to pull your credit report if it is considering hiring, retaining you or offering you a promotion. A company's right to pull credit reports of prospective hires falls under the category of background checks. However, employee credit checks must fall within the confines of the Federal Credit Reporting Act rules.

Background Check

Background checks have become the norm for today's job seekers. It is understandable why a company would want to know a little more about you before it makes a hiring decision. Some industries such as law enforcement and brokerage industry require background checks including fingerprinting. Typical background checks involves past employment verification, current employment, character references and a credit check.

Your Rights

The Fair Credit Reporting Act (FCRA) ensures accurate and fair reporting of consumer information by the credit rating agencies. The FCRA also covers reference checks by another employer but not personal references. If a company intends to run a credit check on you, it must notify you and receive your authorization. If the company denies you employment, the company must provide you with a copy of your credit report, along with a copy of "A Summary of Your Rights under the Fair Reporting Act," a document by the Federal Trade Commission. The company must also provide you with the name of the credit rating agency (CRA) it used to make its decision and issue a statement that the CRA was not responsible for its decision. Finally, the company must notify you of your right to dispute the accuracy of the information provided by the CRA.

Credit Check

The fact that a company can refuse to hire you because of a bad credit seems unfair. It is a Catch-22 for a job seeker who may have had good credit at one point but has fallen on hard times. However, many argue that when a company runs a credit check it is more interested in whether you have a criminal background. They argue that a bad credit score is much better than having criminal violations. You may be able to explain your bad credit score but have a harder time explaining away violations. However, once hired, a company cannot use a credit check to fire you. For example, if your employer runs a credit check during your course of employment, it cannot fire you if it learns that you filed for bankruptcy.

Insight

Get a copy of your credit report before you start your job search. The Fair and Accurate Credit Transactions Act (FACTA), an amendment to the FRCA, allows consumers to obtain a free annual report from the credit rating agencies. The CRAs --- Equifax, Experian and Transunion --- established a website, www.annualcreditreport.com, so consumers can get free copies of their credit reports. Check your credit reports for accuracy. Dispute inaccuracies and supply missing or incomplete information. Knowing what's in your credit report provides you with an opportunity to explain your credit history to a company looking to hire you.

Read More

How to Get Rid of a bad credit Rating

Millions of Americans suffer from bad credit ratings. Getting rid of bad credit is not impossible, as long as you follow some steps and be disciplined with your spending habits. Whether you've had some hard times in your life, or just didn't know the importance of a good credit score, it is never too late to change.

Instructions

1




First off, you will want to pay off any debt you have, starting with the biggest debt first. Change your spending habits to live under your means and devote some of your paycheck each month to paying down your debt. Debt consolidators can be a great resource to simplify things, although you should research first.

2

Get a free copy of your credit report through a free credit report service. This will help you gauge where you are and what progress can be made. You can use freecreditreport.com or any other credit report site, sign up, then delete your account before they charge you, which is usually 30 days.

3




Pay your bills on time. This is the number one way to get rid of a bad credit rating. Loan companies wan to see that you can pay your bills and that you are not maxing your cards out. There are bad credit loans out there but when you are ready to buy a car or a house, you'll want the highest marks possible on your report because your payments will be much much lower.

4




Try to not use all your available credit. Lending companies want to see that you don't have to rely on credit and it will show when you are only charging a little bit each month of your total available amount. A good rule of thumb is no more than 30%.

5

Get rid of expenses so that it's easier to pay the bills each month. Do you have a big car loan? Sell the car and get a used car loan for a smaller less expensive car. Cars are depreciating assets and are very expensive. Try lowering your cable bills by getting rid of that expensive movie tier you never use. Eat at home more, whatever you have to do.

6

Lastly, but this is important, don't close old credit accounts just because they are paid off or are standing idle. It is a myth that keeping idle accounts hurts your score. In fact, it will make it better because having more credit open looks good. Especially since its more credit you are not paying late or not at all. Let it sit, and don't worry about it.

Read More

How Long Does Foreclosure Stay on Your Credit?

A foreclosure is among the worst things you can have on your credit history, mostly because of how long it remains. Although there are several credit reporting agencies, a foreclosure shows up on all of them and it's very difficult to remove. Foreclosure can be avoided with with a short sale or deed in lieu of foreclosure. However, these also appear on your credit report.

Types

Equifax, Transunion and Experian are the three major agencies that accumulate your credit information and assign credit scores. They gather data from banks, creditors, insurers and your employers. Your income, amounts you've borrowed and your payment history are all part of the credit reporting agency's records. Your credit score is calculated based on this information as well as any civil judgments or collection actions against you, and bankruptcies and foreclosures you've had.

Effects

A foreclosure will appear in the Public Records section of your credit report. Foreclosures are listed for no less than seven years from the date of the foreclosure sale. There is typically no remedy for this. If you've deeded your house back to the bank in a deed-in-lieu-of-foreclosure or disposed of your home in a short sale, this will often have a similar affect on your credit report, though the lender has some discretion in how they report these transactions.

Significance

A foreclosure on your credit report will make a significant impact on lenders when you apply for a loan in the future. You may be considered a poor credit risk and your application may be denied. However, a lender will sometimes make allowances when mitigating factors like accidents, death of a spouse, natural disaster or civil unrest have contributed to your financial distress.

Prevention/Solution

It's not uncommon for old accounts to show as unpaid when they've actually been settled. By examining your credit reports and correcting inaccuracies, you may be able to improve your credit score to compensate somewhat for the foreclosure. The Fair Credit Reporting Act requires that the credit reporting agencies correct errors on your credit report, but inaccuracies will not be corrected until you dispute them.

Function

To dispute items on your credit report, order reports from each agency and check the details of each item listed. If you find errors, use the contact information provided on the report to speak with the creditor directly. If you are unable to resolve the dispute with creditor, contact the credit reporting agency directly. The credit reporting agencies' websites will tell you what information they require and how you should format your correspondence.

Read More

What Do You Do If Someone Else Has Used Your Social Security Number?

One of the fastest growing crimes, identity theft affects an estimated 9 million people every year. Identity theft occurs when someone gains possession of your personal information, such as your social security number, and uses it for financial gain.

Place Fraud Alerts

If someone has used your social security number, you need to place fraud alerts on your credit file with each of three national credit bureau reporting agencies: Experian, Equifax and Trans Union.

Close Fraudulent Accounts

Close any accounts that have been breached or were opened fraudulently. This will require obtaining a copy of your credit report. You can get one for free when you place fraud alerts on your file.

File Fraud Report with FTC

File a complaint with the Federal Trade Commission. This report will help law enforcement track identity thieves and provide back up for the police report. You can also file a report with the Social Security Administration.

File Police Report

File a police report with your local law enforcement officials.

Send Fraud Reports to Creditors

Begin the process of contacting creditors that issued the fraudulent accounts and send them copies of the FTC and police reports that indicate you have been a victim of fraud.

Read More

How Bankruptcy & Foreclosure Affects Your Credit

You can expect to see most major accounts that you are responsible for, such as your mortgage loan and credit cards, appear on your credit report. When you are unable to pay your debts and forced into foreclosure or bankruptcy, that fact will appear on your credit report as well.

Facts

Bankruptcy and foreclosure are entered into the public record and have a negative effect on your credit.

Features

A foreclosure or bankruptcy can cause your credit score to drop hundreds of points. Each person will be affected differently, depending on what information is already contained within his report.

Time Frame

The Fair Credit Reporting Act dictates how long entries may remain on your credit report. A foreclosure will only appear within your credit file for seven years. A bankruptcy, however, can report for up to 10 years.

Considerations

The more recent a credit report entry is, the greater its impact on your credit score. Thus, you can rebuild your credit over time even with a bankruptcy or foreclosure on your credit report.

Warning

If your mortgage lenders sues you for the amount you still owe on the loan after the foreclosure and wins, a judgment will appear on your credit report. A judgment is a significant negative item and can damage your credit score even further.

Read More

How to Check Your Credit Score in California

According to Mortgage Marvel, the average credit score in California is 755 as of 2011, which is 20 points higher than the overall national average. A good credit score can help you qualify for loans, get you better interest rates on those loans and is well worth maintaining. Your credit score anywhere in the U.S. -- including California -- is monitored by the three main credit bureaus, TransUnion, Equifax and Experian. You're entitled to a free copy of your credit report, but to see your score you must pay.

Instructions

1

Navigate to annualcreditreport.com. Other sites offer to let you access your credit report for free, but you end up having to establish a membership. Annual Credit Report is set up so the credit companies can comply with federal guidelines and provide consumers with a credit report each year.

2

Select California from the drop-down menu and hit "Request Report."

3

Fill out the form with your name, address and Social Security number. Include your address information for the past two years. Type out the numbers and letters in the security screening and hit "Continue."

4

Answer the identifying questions correctly to view your credit report.

5

View each report separately. While viewing the report, you'll be given the option to purchase your credit score. Use a credit card to pay the fee and view your credit score. Check each one so you have all the information about your credit score that anyone making inquiries could have.

Read More

Most Popular Credit Reporting Agencies

Consumers need to be aware of the dozens of fly-by-night credit reporting agencies that come onto the American scene and offer elusive means of correcting credit reports and miraculously eliminating debt. Conversely, there are legitimate credit reporting agencies operating in the United States, but with them too, it is important to read the fine print when using their services, as they are for-profit companies. The most popular credit reporting agencies in the country are those the Federal Trade Commission calls "the big three": Equifax, Experian and TransUnion.

Equifax

Equifax Credit Information Services, Incorporated is a publicly traded company on the New York Stock Exchange. (Their ticker symbol is EFX.) The company operates internationally and is a nationwide consumer credit reporting agency within the U.S. Equifax is obligated under the Fair Credit Reporting Act to provide American consumers with one free copy of their individual credit report each year. The company makes profits by providing a line of products to both individuals and businesses. For example, according to their website, Equifax sells services to monitor credit scores, protect against identity theft, and reduce debt faster. The company is headquartered in Atlanta, Georgia.

Experian

Experian Information Solutions, Incorporated, with corporate headquarters in Dublin, Ireland, operates on a global level, offering services and products to both individuals and companies. Experian markets consumer information to businesses providing credit histories and reports to companies through their paid services. The company assists businesses in finding and targeting prospective customers. Experian also provides products and services to businesses to help protect against fraud, identity theft and bad debt. Additionally, Experian offers debt collection services, helping companies find debtors who have relocated. The Fair Credit Reporting Act requires Experian to provide one free personal credit report per Social Security number per year to American consumers.

TransUnion

Chicago, Illinois is home to the corporate headquarters of TransUnion LLC. A popular nationwide credit reporting agency, TransUnion also must provide, according to U.S. law, one free personal credit report per American consumer per year. TransUnion conducts a global business in what the industry terms "information solutions." The company provides credit reports to businesses on prospective and existing customers, and offers identity theft protection and fraud alerts. In addition, TransUnion tailors its services to different sectors of the business world, including providing information on prospective renters to property owners and property managers.

Read More

How to Get Rid of Delinquencies on a Credit Report

There are few options for removing delinquencies from a credit report. Delinquencies include negative credit information such as late payments, charge offs, settlements, collection accounts, foreclosures and bankruptcies. Federal laws allow major credit bureaus to report delinquencies for seven years. So-called credit repair agencies boast they can remove delinquencies in just a few months, but the Federal Trade Commission reports that's not legally or ethically possible for delinquencies that are current and accurate. The Fair Credit Reporting Act does allow for removal of wrong or outdated information. There are also some other legal methods for removing delinquencies.

Instructions

1

Get a copy of your credit report from AnnualCreditReport.com. The Federal Trade Commission points out that the website is the only site authorized to offer free credit reports under the terms of the Fair Credit Reporting Act, a federal law. Visit the site to view and print your credit report from major credit bureaus Experian, Equifax and TransUnion.

2

Read the credit report to identify delinquencies. Look for late payments of more than 30 days, and other delinquent information such as collection accounts. A collection account is an account that was closed by the creditor because of nonpayment and sold or assigned to a debt collector. Some creditors maintain their own internal debt collection departments.

3

Check the date of the most recent activity on each specific delinquency. Note if more than seven years has passed since the most recent activity.

4

Remove outdated delinquencies by contacting the respective credit bureaus to enter a dispute. Send a letter to the credit bureau at its address listed on the credit report, or follow instructions on the report to enter disputes by phone or online. Credit bureaus are required by law to respond to disputes within 30 days. They must remove outdated delinquencies.

5

Dispute and possibly remove other delinquencies that include wrong information. Federal law gives you the right to challenge any information on your report as inaccurate. The credit bureaus must confirm the information through an investigation, correct the errors or delete the information entirely. However, the credit bureau can allow the information to remain if it deems your disputes frivolous.

6

Contact creditors or debt collectors on collection accounts. Offer to pay the full amount due in exchange for the removal of the delinquencies from all of your credit reports. The tactic, which is legal, is called "pay for delete." Not all creditors or debt collectors participate in the agreements, however.

7

Call current creditors to ask for removal of 30-day late payment delinquencies. Some creditors may agree if you have been a long-time customer and you explain that the late payment was an oversight.

Read More

Where Can I Get a Loan With Bad Credit History?

You have bad credit and you need a loan badly, because if you can find even a small one it can help you pay off your bills for the month. The problem is you keep getting turned down for loans because of bad credit. Luckily, if your credit is really bad there are places that will provide you with a loan because they don't run a credit check on your finances.

Payday Loans

Getting a payday loan is a good solution if your credit score is lower than 550. Payday loans get their name because they must be repaid in full by your next paycheck. They are simple to get, winning approval if you have a full time job, an active checking account, and make at least $1,000 per month.
When applying for a payday loan you will need a copy of your paycheck, five references, a voided check, and checking account that has been active for at least six months. You can decide how much you'd like to borrow, but the more you borrow the higher the interest rate. They can be dangerous, too, by causing you to get in more debt, so only borrow what you can pay back on your next payday.

Title Loans

Car title loans are simple to get approved and don't require a credit check. They also require little income verification or personal information. Title loans are given in exchange for signing over the title of your vehicle to the lender. But they can be risky if you don't pay them off in 30 days because the lender can take your car. So only use this option if you are certain you can pay the loan off in 30 days, as the interest rate on these loans can be as high as 300 percent.
Also, be careful to read the fine print on all the paperwork you sign. The loan amount is determined by the age and condition of your vehicle. In addition, you must have insurance on the vehicle and the state tags must be up to date.

Read More

What Is an Outstanding Credit Score?

Credit scores range from 300 to 850 and are one of the ways lenders evaluate whether or not to grant credit to a potential borrower. Your credit score will also have an impact on how much interest your lender requires you to pay on the amount you borrow.

Facts

Lenders may judge credit scores by different criteria. Thus, what is "outstanding" to one lender may simply be acceptable to another. According to Bankrate.com, however, outstanding credit is typically a score of 760 or higher.

Features

The information in your credit report determines your credit score. A long credit history that reflects a low balance of debt and a history of on-time payments will contribute to an outstanding credit score.

Benefits

Individuals with outstanding credit are more likely to enjoy low interest rates on loans and credit cards. Low interest rates can save you money over time.

Misconceptions

When you pull a free consumer credit report, your score may be different from the FICO score that your lender pulls. Having a high consumer credit score is no guarantee that your FICO score will be as high.

Considerations

An error on your credit report could destroy your outstanding credit score. It is imperative that you regularly monitor your credit and dispute any errors that you find to maintain your good credit rating.

Read More

Do Credit Checks by Lenders Affect Your Score?

Credit checks by prospective lenders can and do affect your credit score -- but the degree to which they do depends on your existing credit history. According to the Fair Isaac Corporation, the damage a credit check or "inquiry" inflicts on your score is worse if you apply for several credit cards in a short period of time than if you're simply rate-shopping for a single loan.

Soft vs. Hard Inquiries

Soft inquiries can show up on your credit reports -- but they're for your eyes only. These inquiries have no effect on your credit score and aren't accessible to prospective lenders. An example of a soft inquiry is when you order your own credit reports from the three credit bureaus: Experian, Equifax and TransUnion. Hard inquiries, on the other hand, are reflected in your credit reports for lenders to see. These occur when you apply for new credit cards or a loan and give a prospective lender express permission to view your credit history.

Credit Score Basics

TransUnion, Equifax and Experian report different data in your credit history and each have different methods of calculating your credit score. But it's your FICO score to which most lenders defer. This number is derived using scoring methods developed by the Fair Isaac Corporation, and it ranges from 300 to 850. FICO attaches more "weight" to certain types of credit-related information in your credit history than others. The number of hard inquiries reflected in your reports accounts for 10 percent of your FICO score.

Effect on Score

Generally speaking, a credit check by one lender has a negligible effect on your FICO score. Fair Isaac Corporation indicates that for each additional hard inquiry, your score will likely drop by fewer than five points. This is measured against your overall credit history, however. If you haven't been using credit very long or have few open accounts, hard inquiries are likely to have more of an impact. When authorized for purposes of rate-shopping for a single loan -- such as a mortgage -- hard inquiries generally have no effect on your score, as long as you limit the period of time during which you shop. The Federal Citizen Information Center suggests shopping for loans over no more than 30 days at one time to protect your credit score.

Other Credit Score Hazards

Credit checks you authorize can lower you score -- but a history of slow- and no-pays and shouldering too much debt can ding your score even worse. Your payment history and the amount of debt you owe compared to your available credit limit make up 65 percent of your FICO score. Improve your credit score by paying bills on time and keeping balances on your credit cards low. Apply for a new credit card or loan only when you absolutely need it.

Read More

What Are the Three Main Companies That Will Tell You Your Credit Rating?

Credit-reporting companies collect consumer financial information. They use the information to assess creditworthiness. This valuable information is sold to banks or other lenders. Three main credit-reporting companies exist in the United States: Equifax, Experian and TransUnion. TransUnion, founded in 1968, and Experian, founded in 1980, join Equifax, founded in 1899. Equifax changed its name from Retail Credit in 1975.

Financial Information About Consumers

Credit-reporting companies receive information from utility, credit card and retail accounts. They also receive information from banks and automobile lenders. Each lender to whom money is owed reports payments. Information collected from public databases, such as liens, bankruptcy, judgments or collections on accounts, is also made available by the credit-reporting company.

The credit-reporting companies gather financial and payment information about consumers to create a credit score. This score reflects creditworthiness, or the likelihood of the consumer to repay borrowed money. Payment history, length of the credit account, outstanding credit or owed amounts, credit types and recent credit applications help lenders assess risk.

Three Credit Scores

All credit-reporting companies compile the same kinds of credit and payment information. Each company maintains a proprietary method for determining consumers' credit scores. For this reason, a consumer's credit score may be different at each credit-reporting company.

Credit Risk Management

Consumers may request and receive an annual free credit report from each of the three credit-reporting companies. Lenders or consumers must purchase a credit score recap. Because the three national credit companies want to prevent identity theft and fraud, consumers may receive calls from collections companies even when they do not owe money. The collections agency, lender and credit-reporting company work together to verify accounts. This proactive approach helps lenders identify fraud earlier than they could before.

Review Credit Reports for Errors

Consumers should review their credit reports for errors. The credit-reporting companies sometimes make mistakes. The companies may report multiple errors on a consumer file. Because the credit companies must research errors reported to them within a month, notify each one of mistakes as soon as possible. Follow up with the company to make sure these errors are promptly removed.

Read More

Credit Scores Without Installment Loan History

Installment loans are a vital part of your credit profile and even if you do not want a common installment loan now, such as a mortgage or student loan, you could want one in the future. A lack of a previous installment loan hurts your chances at approval for a new one. However, you can probably attain a high credit score without an installment loan. The credit scoring model is less concerned with installment debt than revolving accounts.

Identification

Without an installment loan on your record you cannot have a good variety of credit, which counts for 10 percent in the FICO formula. Good borrowers tend to have several credit card and installment accounts. This is not to say that you must have an installment loan to obtain good credit. You can make up for a lack of variety by always paying on time or managing credit well for a long time.

Effect

Losing a few points in the FICO formula because of a lack of an installment loan could make loans much more expensive. Most lenders set interest rates based on what tier your score falls into. The most common top tier as of 2011 is 760 to 850. Thus, if you had a 750, you could pay a few tenths of a percentage more on your interest rate. This may not seem like much but it becomes significant when you take out a a big, long-term loan such as a mortgage or auto loan.

Don't Take Loan Just to Boost Credit

Applying for an installment loan just to boost credit may not be the wisest choice. Any debt is bad for your financial health. Also, it may take a while to see any benefit. Creditors usually perform a hard inquiry into your credit for any loan, which costs three to five points. A new account lowers the average age of all of your accounts and increases your monthly debt service to monthly income (DTI). While the credit reporting agencies do factor in DTI, lenders like to see a DTI as low as possible.

Tip

It is impossible to say what your credit score will look like without an installment loan. You could have a great score and only hold credit cards. If you are trying to rebuild credit as fast as possible, recent installment loans are necessary to squeeze the most points out of your credit history. The FICO model ignores installment loans once you pay them off.

Read More

Legal Ways to Improve Credit

If you've made financial mistakes in the past, chances are your credit score has taken a significant hit. Bad credit can make it difficult to purchase a car or home, get a cell phone or even secure employment. While a number of companies advertise credit repair services, the legality of their practices can be questionable. If you have bad credit, there are a number of ways to legally improve your credit score over time.

Pay Down Debt

If you have a large amount of debt, one of the easiest ways to improve your credit is to simply pay it down. According to myFICO, 30 percent of your credit score is based on the amount of debt you owe versus your actual credit limit, otherwise known as your credit-to-debt ratio. If your balances are close to or at your credit limit, this can cause your credit score to drop. Too much debt can also cause lenders to view you as a financial risk when applying for new credit. The Motley Fool recommends paying down unsecured and revolving debts first and then attacking mortage, vehicle or student loan debt.

Pay Bills on Time

Having just one late or missed payment can cause your credit score to take a nosedive. According to myFICO, 35 percent of your credit score is determined by how you pay your bills. The longer an account goes unpaid, the longer it takes for your credit to recover. If you have trouble remembering to pay bills on time, considering setting up automatic payments through your bank in to avoid missed payments. If you are unable to make your minimum payments, contact your creditors before your payment is due to see if an alternate arrangement can be made.

Dispute Errors

If you don't check your credit report regularly, you may not be aware of potential errors or inaccurate information that may be hurting your score. According to Bankrate, approximately 70 percent of credit reports contain significant errors that can lead to consumers being denied credit. Fortunately, the Fair Credit Reporting Act requires credit reporting agencies to investigate consumer credit disputes and remove erroneous information. You can get a free copy of your credit report through the Annual Credit Report website. You should check your credit report for accuracy at least once per year.

Limit New Credit Applications

If your credit score is already low, applying for new credit can actually make it worse. According to myFICO, 10 percent of your credit score is determined by the number of times lenders pull your credit. If you are attempting to consolidate debt, for example, multiple inquiries for loans or new credit lines can make you appear desperate to lenders. If you're shopping for a home or vehicle loan, The Motley Fool recommends grouping your inquiries within a shorter time frame since the credit scoring system treats multiple requests for these types of loans as a single inquiry.

Read More

How to Get a Credit Score of 900 Points

Having good credit has become increasingly important. You credit score is linked not only to the interest rate you will receive but also to whether or not you can buy a home, purchase a car or get a new credit card. In many cases your credit score is now even being used to calculate risk for automobile insurance. Simply put, a great credit score will save you money, and over your lifetime a lot of it. Getting a near-perfect credit score is challenging, but not impossible. If you are looking to get a score of 900 the following steps will help you achieve your goal.

Instructions

1

Obtain a copy of your credit report and your credit score. You can get these both on the Internet. You can get your report free once a year, but to get your score you will need to pay. The cost is about $15 per report for each of the reporting agencies. It is a good idea to obtain reports from all three reporting agencies: Equifax, Experian and TransUnion. Your credit scores can range from 300 to 990 points, depending on the report. You can begin by going to www.AnnualCreditReport.com (see Resources).

2

Carefully look over your reports. If you find errors you will need to file a dispute with your credit company and work to get the errors corrected. Getting errors off your report will raise you score.

3

If you do not have a checking and savings account, go to a bank and open them. Responsibly maintaining these accounts shows stability and helps with your overall score.

4

Always make sure you have a mix of credit accounts. You will need both revolving credit and installment loans to achieve a 900 score. Revolving credit includes your credit cards and lines of credit. Installment loans are your automobile loans, personal loans, mortgages, etc.

5

Follow certain rules in regards to your credit card if you wish to reach a score of 900. Always pay your bill early and in full. Pay the bill as soon as it arrives, if possible. Use your cards (and pay them off) every month to demonstrate responsibility, but never charge more than 10 percent of your credit limit. Ask for increases in the credit limit at least once a year and never close an account once it has been opened.

6

Never accumulate more debt than what you can truly pay. When mortgaging a home or taking out a car loan always make sure you will easily be able to make the monthly payment. Be sure to pay all of your installment loans on time every month.

7

Continually monitor your report. Correct any mistakes that show up immediately.

Read More

The Best Way to Clear Credit Report

Clearing your credit report and removing derogatory remarks is a key way to boost your low credit score. High credit scores open the door to lower rates on auto loans and mortgages, and people with A+ credit typically qualify for lower rates on credit cards. Improving your credit history and maintaining a good report involves effort and a realistic plan. And while you can't reverse negative credit overnight, you can vastly fix your rating within a year--maybe sooner.

Instructions

1

Get rid of outstanding debt. Stop spending your money frivolously and use your extra income to eliminate credit card debts and other loans. If needed, find additional employment to generate extra cash to pay off debt.

2

Work with a credit counseling agency. Choose a non-profit agency to negotiate lower rates with your creditors and help you pay off your debts sooner.

3

Pay bills promptly. Late payments reduce your rating. Avoid late arrivals by submitting credit card and loan payments online, and by keeping a record of your due dates on a desk calender.

4

Stop applying for credit. Recognize the damage caused by excessive credit inquiries. These applications reduce your credit rating and make it difficult to obtain future credit. Turn down in-store credit card offers and shred pre-approved credit card offers.

5

Review your credit report regularly. Check your personal credit file annually to check for mistakes. Negative remarks from identity theft and reporting errors will damage your credit rating.

6

Dispute errors. Don't ignore reporting errors on your credit report. Submit a dispute letter to the credit bureaus to begin an investigation. Include the creditor's name and your reasons for disputing the entry in your letter.

7

Work with creditors to remove judgments. Pay off credit judgments and then ask the reporting creditor to take the negative remark off your credit reports. The creditor must submit a judgment satisfaction letter to the court.

Read More

3 Major Credit Reporting Bureaus

When you think of your credit reports and scores, in most cases you are thinking of a report from one of the three prominent credit reporting bureaus, Experian, Equifax and Transunion. A credit reporting bureau generates your credit report from information received from creditors. This information is used to generate your credit score.

Transunion

Transunion was founded in 1968 by the Union Tank Car Company, with headquarters in Chicago. Transunion provides credit reporting solutions for consumers and businesses worldwide. Transunion's total business customer count is above 50,000. Transunion offers consumer credit reports both through the Annual Credit Report program and its own credit monitoring service. The Pritzker family owned a majority interest in Transunion until 2010 when the Chicago-based Madison Dearborn Partners LLC purchased a 51 percent share of the company.

TransUnion

2 Baldwin Place

P.O. Box 1000

Chester, PA 19022

transunion.com

800-888-4213

Equifax

Equifax has been operating for over 100 years, starting as a credit company for retail accounts in 1899. Equifax has its main headquarters in Atlanta, Georgia, along with 15 offices spread throughout the world. Equifax offers a number of credit reporting services for consumers and businesses. On the consumer end, Equifax offers the Equifax complete product package. This is a three-in-one credit report containing data from all three credit reporting agencies, along with credit monitoring features. Businesses can request consumer credit reports for risk management, marketing and research information and fraud avoidance.

Equifax Credit Information Services, Inc

P.O. Box 740241

Atlanta, GA 30374

equifax.com

1-800-685-1111

Experian

Experian was originally known as CNN Systems, founded in 1980. Experian's corporate headquarters are based in Dublin, Ireland and the company has an additional presence in 36 countries. Experian offers consumer credit report information for consumers and businesses. Consumers can request a copy of their credit report, use Experian's credit monitoring service, or use Experian features to protect themselves against identity theft. Businesses can use the report information to determine the credit-worthiness of a client, avoid fraud and perform market research on target credit markets.

Experian

P.O. Box 2104

Allen, TX 75013-2104

experian.com

888-397-3742

Read More

How to Check a Customer's Credit

If you're going to check a customers credit, you must have a legitimate reason for doing so. A lender such as a bank or other financial institution can check a customers credit; collection agencies and debt collectors can also check someones credit report. When you get ready to check an individual's credit, there are a number of steps you'll need to take. You can access a customer's report through one of the three credit reporting agencies (TransUnion, Experian and Equifax).

Instructions

1

Determine the reason why you'll need the credit report. Many lenders will access a credit report to see how a customer has paid their debts in the past before making a decision to extend credit. You want to make sure a customer doesn't represent too much of a risk. The amount of debt a borrower has is another thing you should be looking at.

2

Take a credit application from your customer. A credit report is accessed when someone applies for credit. You will need to get all of the customers information on this application. Usually the customer will need to sign the application, which gives you permission to access his credit report. The information needed will be name, address, Social Security number and date of birth. The application will also list the customers place of employment, personal references and banking account information.

3

Decide which credit report you'll access. Lenders usually use one of the three major credit-reporting agencies; sometimes they'll use more than one if they can't find a credit history for a customer and the customer is adamant about having an established credit history.

Many times credit reports can be retrieved right on the Internet through your credit terminal. All you have to do is key in the requested information from the appropriate credit-reporting agency, and the information will be displayed right on your terminal. You'll be able to see the customers entire credit history. All three credit reporting agencies won't have the same information.

4

Make a decision. It's now time for you to make a credit decision based on the information contained in the credit report, in conjunction with all the other information on the application. You'll either deny or approve the loan request.

You could also contact the customer if additional information is needed or if you need further clarification. If there is derogatory information on a credit report, you may want to ask the customer to explain what happened. If the problem has been corrected and the debtor is paying on time after the incident occurred, they could be approved for the loan request. You could also use automated credit processingthe loan will instantly be approved or denied if the customer does not meet certain criteria such as an adequate credit score.

Read More

Why Are TransUnion Credit Scores Different?

Any of your credit reports housed at each of three main credit bureaus -- TransUnion, Experien and Equifax -- can be used for credit scoring purposes. Credit scores from each of the three bureaus can differ by 50 points or more, according to Jason R. Rich, author of the book "The Complete Book of Dirty Little Secrets: Money-Saving Strategies the Credit Bureaus Won't Tell You." The difference between your TransUnion credit scores and the scores of other credit bureaus are due to the particular credit information and scoring model that is used for calculations.

Credit Bureau Role

The three main credit bureaus -- Experian, Equifax and TransUnion -- are responsible for housing consumer credit information, such as details regarding the number of credit accounts and loans you hold, including payment history information. The consumer credit information -- also known as your credit report -- is used by each of these agencies to calculate a credit score. It's imperative that you conduct your credit affairs wisely if you want a favorable score.

Cause of Discrepancies

Due to the different scoring models and criteria of each agency, your credit scores will differ between agencies. Think of it as being graded on the same assignment by three different teachers, with all three teachers using their own set of criteria to determine your score. Inevitably, your grade from each teacher will differ. Credit bureaus also have their own set of criteria. Some criteria may overlap between bureaus and some of it will be totally different. The different sets of criteria will result in a discrepancy between your TransUnion score and your Experian and Equifax scores.

Factors Used to Determine Credit Scores

The scoring models of each credit bureau, including TransUnion, are different and the exact details of each model are unknown. Yet, the general list of criteria credit bureaus use includes payment history, credit balances, length of credit history, new accounts opened and types of credit used. The amount of weight each category carries will depend on each credit bureau's scoring model. Another factor used to determine scores is when the score is calculated. Information gleaned from a credit report one week may not be the same the following week because of the data reported.

What You Can Do

While you don't have any influence regarding the weight assigned to the criteria that a credit bureau such as TransUnion uses to calculate your credit score, you can practice responsible credit behavior. If you make payments on time, avoid opening too many accounts and keep your credit balances at a reasonable level -- below 30 percent of your total available balance -- you can increase your chances of a more favorable credit score.

Read More

How Much Does a Credit Check Drop Your Score?

Applying for credit does not always hurt your score. It may impress creditors as long as your inquiries do not appear you are desperate for credit, according to the BCS Alliance.

Types

Hard inquiries -- ones that you initiate -- lower your credit score by about five points, according to the BCS Alliance. Soft inquiries, such as pre-approved credit offers, never count against you.

Tip

You may apply for multiple types of credit within a single month. Credit rating agencies will only count these applications as one inquiry, according to the Privacy Rights Clearinghouse.

Considerations

The Fair Isaac Corporation score ranges from 300 to 850. Five or less points for one inquiry affects your score far less than paying bills on time or the length of your history,

Read More

Is it Better to Dispute Credit Online or by Mail?

A credit report contains a complete and detailed history about a consumer's spending habits. Creditors use the information in a credit report when deciding to extend credit to a new consumer, which is why it is in a consumer's best interest to check his own credit report. If the consumer finds an error on his credit report he can dispute the information with the credit bureaus. Consumers can file disputes either online or through the mail. Both methods have advantages and disadvantages.

Advantages of Online Disputes

A consumer can dispute her credit report online through the credit bureaus' website. Typically, consumers find disputing their credit reports online easier than disputing them by mail because they do not have to print any documents, use stamps or visit the post office. Online disputes are faster, as they reach the credit bureaus instantly and do not have the wait times associated with traditional mail. Filing a dispute online may also be more convenient, as the consumer can often check on the status of the dispute on the credit bureau's website.

Disadvantages of Online Disputes

When a consumer disputes his credit report by mail, he has the option to formulate a dispute letter and to attach documentation that proves his case. If he disputes the information online, he will not be able to supply any documentation. The credit bureau may have to go back to the consumer and request documentation at a later time, slowing down the dispute process and inconveniencing the consumer. Also, since the consumer used an online form to submit his dispute, he may not have any documentation of his claim, and many consumers prefer to have printed documentation for their records.

Advantages of Mail Disputes

When a consumer files a dispute through the mail, she can keep copies of everything sent to the credit bureaus for her own reference. The consumer can also send the letter certified mail, which will give her proof of when the credit bureaus received her dispute. Mailed disputes also give the consumer more freedom to make her case. Many online dispute forms limit the amount of information a consumer can give with her dispute. Since written dispute letters are free form, the consumer can include any information or documentation she wishes.

Disadvantages of Mail Disputes

Sending a credit report dispute through the mail can be a very time-consuming process. The consumer will need to create her own dispute letter, make copies of her credit report and include other documentation. The consumer will need to invest more time into the process by visiting a post office in person and sending the letter by certified mail. Mail disputes also make it more difficult for the consumer to follow up on her dispute letter. Consumers can only check on the status of the investigation online if they submitted their dispute through the credit bureau's website.

Read More

Tips on Asking for a Loan With Bad Credit

According to Lending Tree, credit scores range anywhere between 300-850. A bad credit score is any that falls below 580. People with a bad credit score will have a harder time finding loans, and any loans that are found will be at a higher interest rates. However, people with a bad credit score can obtain a loan.

Credit Score

Learn your credit score. Several websites, including Annual Credit Report and Free Credit Report, offer credit score reports, usually for a small fee. Knowing your credit score can help you have a more accurate idea of any issues you are going to face. You can also see if there are any inaccuracies on your credit report that may be pulling your score down.

Contact the Lender Directly

According to Edmunds, a dealership or mortgage company will contact banks that may deny you, or will give you a loan at a higher interest rate. Rather than going through a car dealership or mortgage company, contact a bank that you already do business with or ask a friend or family member for a referral to a bank or lending institution that has fair rates and friendly service.

Friends and Family

Instead of obtaining a loan from a bank or other traditional outlets, consider going to a friend or family member who can supply the money. Set up a payment schedule with the other party, including interest. This person may also act a co-signer for a loan that is obtained through a bank or credit union. As a co-signer, the friend or relative takes on the responsibility of paying for the loan if you are no longer able to do so.

Fix Your Credit Score

One of the most effective ways to obtain a loan with bad credit is to attempt to improve your credit score. Pay off any smaller bills that are found on the report. Pay all of your existing bills on time and do not take out any more large amounts of debt, which adversely affects your credit. Pay down the balance of existing credit cards or consolidate the cards onto one lower interest credit card. The amount of times you apply for a loan also affects your credit so avoid applying with too many banks or other lending institutions.

Read More

How to Calculate Beacon Score

Your beacon score, or credit score, is crucial to making any type of large purchases or getting a credit card. Missing payments is one of the ways credit scores often plummet. Beacon scores are calculated using a number of different factors. Your score will range from 300 to 850, with 850 being the best. Most people are happy with a score of 600 or higher.

Instructions

1

Visit AnnualCreditReport.com to request a free credit report.

2

Fill out the form on the site correctly otherwise your score will be incorrect.

3

Choose which sites that you would like to receive a credit report from. You will then be taken to each site you chose.

4

Answer the questions on each site correctly. This is where account numbers and other account information may be needed.

5

Complete the remaining steps, if any, on the site you chose in Step 1. You will then be sent your free credit report with your calculated beacon score.

Read More

How to Dispute Credit Inquiries

Each time you apply for a credit card or loan, the lender pulls your credit reports from the big three credit bureaus (TransUnion, Equifax and Experian) to help them decide whether to loan to you. Each inquiry into your credit reports leaves a notation on your reports. These inquiries factor into your overall credit score, so it's important to avoid many inquiries at the same time. You usually have to give permission before a credit report inquiry. However, sometimes inquiries are made on credit reports that aren't authorized. If that's happened to you, then you want to know how to remove these inquiries to keep your credit score high.

Instructions

1

Request your credit reports from each credit bureau. Look over the listed inquiries on each report. Make a list of the inquiries you didn't authorize. The unauthorized inquiries are the only ones you can legally dispute.

2

Draft a letter to each of the credit bureaus. In this letter, provide any personal identifying information, such as name, address, social security number and credit report number. Write that you found unauthorized credit inquiries on your report and that they are required to investigate in accordance with the Fair Credit Reporting Act (FCRA) and notify you of the outcome of their investigation. Close the letter by asking that they notify you of their findings within a reasonable amount of time (usually within one month). This notification should be either the outcome of their investigation or an updated copy of your credit report with the erroneous inquiries deleted.

3

Send each letter certified with a return receipt requested. Doing this gives you proof that your letter was sent and arrived at the credit bureaus' offices.

4

Follow up with another certified letter if you don't hear back within a reasonable amount of time. Credit bureaus receive thousands of pieces of correspondence each week and it's possible that yours could fall through the cracks. You'll eventually hear back from the credit bureaus with a credit report showing that the unauthorized inquiries were deleted.

Read More

Does a Forbearance Go on a Credit Report?

A forbearance is an important tool that can be used if you fall behind on your debt payments. The forbearance process can help in temporary delinquencies of mortgage debt, credit cards, car loans and student loans. Before entering into a forbearance agreement, it is critical to understand the impact it will have on your credit rating and credit score.

The Basics of Forbearance Agreements

Forbearance agreements represent formal arrangements with a lender to temporarily suspend required payments or collection efforts. They are used when borrowers have temporary financial crises and need a short period of time to recover. A forbearance can last for a month or several month. Each arrangement is different from lender to lender and a lender does not have to agree to a forbearance. Often, in order to qualify, you must prove to the lender that your situation is temporary and that you will soon have the financial means to catch up and stay current on your debt. The benefit of a forbearance agreement is that it can give you some protection from collection action or even seizure or foreclosure while you work through your financial issues.

Impact on Your Credit Report and Score

A lender will often report that a forbearance agreement has been entered into to the three major credit bureaus. However, the payments that are deferred under the agreement will not be marked as late or delinquent for the duration of the agreement. This means that, although it will be recorded on your credit report, it will not impact your credit score. In fact, potential lenders who read your credit report will see that you are being financially responsible by entering into the agreement and working with your lender.

Working Through a Forbearance

The most important way to ensure that your forbearance agreement gives you the space you need to get your finances back in order is to be realistic about your financial situation. If you are in a mortgage that you will never realistically be able to afford, a forbearance is just going to prolong the inevitable. Use the forbearance period to budget and project. If you believe that you need serious rearrangement of your debt, speak with a non-profit credit counselor who may be able to provide you with other options.

Hidden Dangers of Forbearance Agreements

Each lender has its own criteria for acceptance into a forbearance agreement. Be sure to read the agreement carefully before signing. Some agreements contain clauses that include penalties, extra payments and other nasty surprises that may put you in worse financial condition than when you started. Make certain that the agreement is clear on when you must make up the missed payments and whether there are extra fees or charges.

Read More

How to Repair a Credit Score Fast

Being financially responsible involves properly budgeting your money and maintaining a good credit score. Nowadays, credit scores carry a lot of weight. Insurance companies and select employers use credit ratings to assess applicants. Also, if you don't have a satisfactory rating, getting a mortgage or auto loan can prove challenging. Even if your score is in the low 600s, there are fast and effective ways to reverse your current standing and establish a trustworthy rating.

Instructions

1

Request a free credit report. Every consumer can receive one free report a year from Annual Credit Report. Obtain a credit report via an on-line request form and view your credit history in minutes.

2

Identify errors. Mistakes or misinformation on your credit report lowers your FICO score. Carefully consider each entry to ensure accuracy. If you identify a mistake, contact the reporting creditor or the bureaus to investigate the mistake.

3

Increase income to pay off debts. High credit card balances also reduce credit scores. Rather than pay minimums, use savings to eliminate debt. Think of ways to create extra money such as obtaining a second job or offering a service such as babysitting, lawn cutting or selling items to generate money to get rid of debt.

4

Consider automatic payments. Late payments also destroy credit ratings. Sign up for automatic payments each month and reduce the risk of late payments. Creditors deduct your payment from your bank account.

5

Avoid collection accounts. Maintain open communication with your creditors and negotiate new payment due dates if you stumble upon financial problems. Ask creditors to consider a forbearance if you are unable to make payments altogether. Aim to avoid collection accounts and judgments.

Read More

How Does a Balance Transfer Affect Credit?

Pre-Transfer Credit Score Calculation

There are five major areas that factor into a person's credit (see Resources below). The only one that will be a affected by a balance transfer is the "Amounts Owed." Within that category, the ratio of credit available to credit used is taken into consideration both on an aggregate level and individual account level.

Making the Transfer

When the balance of the original account is transferred, the balance is added to the receiving account. This means that the receiving account now has more of its credit line used than before. This makes a person's credit score lower. However, the original account now has a lower balance than before, and that makes the credit score higher.

Credit Score Settles

During the month when the balance is transferred, the credit score will either sharply decrease or increase depending on which creditor reports information for that month first. If the receiving creditor reports first, then there will be a period during which it reports having the new balance but the old account has not yet reported that balance being removed. So the overall credit will drop, and vice versa. After both companies have reported, then the overall score will settle. The net affect on credit will be small in the end.

Read More

How to Access Trilegiant Credit Reports

Trilegiant is a company that sells membership-based services such as PrivacyGuard, which is a website where you can check and monitor your credit reports. This helps you stay informed about the information being reported about you and monitor for identity theft.

Instructions

1

Navigate to http://www.privacyguard.com. From the homepage, click on "Join."

2

Fill in your personal information. Answer all information correctly. If the personal information is not properly entered, or is incorrect, the service may be unable to establish your identity and provide credit reports. At the end of the page, click the red button that says, "Yes! Sign Me Up." Once this is pressed, your credit card will be charged.

3

Select "Obtain Credit Reports" from your account homepage. You will then be given the option of selecting credit reports from Equifax, Experian and TransUnion. You will have to select each company separately to view the reports. After you select the company you will be asked to verify the last four digits of your social security number and birth date. Once entered, your credit report will be displayed.

Read More

How Do I Access My Credit Reports?

Credit reports contain information on everything from your credit card balances to your address and criminal history. Consumer reporting bureaus Equifax, Experian and TransUnion sell the information to businesses such as credit card companies. Your credit score, which is based on the information in the reports, is used to determine your credit worthiness and affects the interest rate you will be charged. By regularly reviewing credit reports, you can check for errors and evaluate what areas can be improved to boost your credit rating. You are entitled to access your credits reports free once a year through AnnualCreditReport.com, the only official website for free credit reports.

Instructions

1

Apply to access your credit reports online. It is fast, simple and your reports can be viewed instantly. Go to AnnualCreditReport.com.

2

Select your state from the menu. Click "Request Report." Carefully complete the application. Incorrect information will invalidate your request as your identity will not be verified. If you have lived in your current home for less than two years provide your previous address.

3

Type the security characters shown in the box at the bottom of the application form. Follow the online instructions. Select the reports you want: Experian, Equiifax or TransUnion, or all three. Wait for your identity to be verified. You will be given a link to set your username and password.

Read More

What Is the Point Difference in a Consumer Credit Score From a Lender Pulled Credit Score?

Before applying for new credit or a new loan, some consumers pull their own credit scores to determine what sort of interest rate they can qualify for. Unfortunately, consumers often pull consumer credit scores that are little more than educational tools and do not provide them with the information they need. This results in confusion when the consumer's lender quotes him a different credit rating.

Credit Scores

Consumers frequently go directly to the credit bureaus when purchasing their credit scores. Because the credit bureaus are the official gatekeepers for credit information, many individuals mistakenly believe that the credit score each bureau sells is the same score lenders use. While credit bureau scores are carefully calculated risk-based assessments, they are not the same as the FICO score lenders pull when evaluating credit and loan applications.

Scoring Range

The credit score you receive from the credit bureaus is calculated using the VantageScore system. VantageScore ratings range from 501 to 990, while the FICO score range is 300 to 850. Thus, pulling VantageScores rather than FICO scores leaves many consumers believing that their credit is better than it actually is due to the higher score range.

Point Differences

There is no guaranteed way to calculate your FICO score using your VantageScore or vice-versa. While mathematically its simple enough to determine one score from another, the VantageScore system calculates scores slightly differently than the FICO system. Because of the varying levels of importance that each system assigns to different information within your credit report and the fact that the formulas for both systems are closely guarded trade secrets, you cannot accurately calculate one score from another or determine the precise point difference between the two unless you purchase both scores.

Ordering Credit Scores

If you know your lender plans to pull your FICO scores, you can purchase and review those scores before your lender does by visiting myFICO.com. The myFICO website is owned and operated by the Fair Isaac Corporation--the company responsible for the FICO scoring formula. Thus, you know you're getting accurate FICO scores when you purchase them directly from the company that owns the formula.

Unfortunately, you can only request your FICO scores based on your credit reports with TransUnion and Equifax. Experian provides FICO scores to lenders, but as of February 2009, it terminated its contract with the Fair Isaac Corporation and no longer allows the company to use its credit reports when calculating FICO scores for consumers.

Read More

The Safest Places to Get a Credit Score

A credit score is a three-digit number that tells lenders whether or not you are a good credit risk. Any time you borrow or repay money, lenders may report it to one or more credit bureaus. The bureaus compile this information to create a credit report. Your credit score is a summary of that report. It determines whether or not you can borrow money, and how much it will cost. There are three main credit bureaus, each using a slightly different formula to calculate a credit score. The safest place to get your credit score is directly from these bureaus. You can also request it from a mortgage lender whenever you apply for a mortgage or a home equity loan. There are many fraudulent websites offering to tell you your credit score. If it's not an official credit bureau site, avoid it.

Equifax

Equifax offers free copies of credit reports through AnnualCreditReport.com. However, the free reports do not include a credit score. You can get the score directly from their website by going to equifax.com. It will cost you $15.95 (as of Sept. 2010). For $39.95, you can get your credit score from all three bureaus via the Equifax site. You will also get copies of all three credit reports.

Equifax

PO Box 740241

Atlanta, GA 30374

866-493-9788

equifax.com

Experian

Experian also offers the three-bureau credit score check, the same as Equifax. You can buy just the Experian credit report and the score on their website. Alternatively, you can get the credit score by joining their Triple Advantage credit monitoring service. The service costs $14.95 a month, but you can cancel anytime during the seven-day trial period. You probably won't need the service, unless you need to know your current credit score on a regular basis.

Experian

PO Box 2002

Allen, TX 75013

888-397-3742

experian.com

TransUnion

TransUnion offers copies of all three credit scores free of charge to people who join their credit monitoring service. You can cancel within the first seven days. Alternatively, you can buy a TransUnion credit report and credit score from their website.

TransUnion

PO Box 1000

Chester, PA 19022

800-888-4213

transunion.com

Mortgage Lenders

If you are in the process of applying for a mortgage or a home equity loan, you can request your credit score from the mortgage lender. This is a safe method of getting your score because the lender will be requesting the credit score, anyway. You won't have a choice about which bureau the score is coming from. Lenders can use any one or more of the bureaus. The score they give you will probably be the one they use to evaluate your application.

Read More

Strategies to Improve Your Credit Score

Credit scores are calculated using the FICO algorithm, which uses information from your credit report to determine how creditworthy you are as a borrower. The FICO scoring model uses your payment history, balances you owe, the length of your credit, the amount of recent applications for credit and the mix of credit you have. These are all plugged into a formula to determine your credit score.

Keep the Accounts You Have

When you are trying to improve your credit score, you should keep the accounts you have and not try to open new accounts unless absolutely necessary. Each time you apply for a new account, the lender will request your credit score to determine whether or not to approve your application. This results in an inquiry on your account. The more inquiries you have on your account the more desperate you appear to lenders, and your credit score will suffer. In addition to not opening new accounts, you will want to leave any accounts you currently have open even if you don't plan to use them ever again. Even if the account has no balance, the account will still go on your credit report each month as being current with your payments. If you close it, you will lose a source of positive records for your credit report.

Reduce Your Debts

Thirty percent of your credit score is based on your existing balances. The more money you owe the greater risk you are to lend money to because lenders fear you will not be able to pay it all back. While it is unlikely you will be able to pay off all of your debts, you can improve your score by reducing your revolving debts like credit card balances because these debts are counted more heavily than installment debts like home or car loans. When you pay down your credit card debt, you also decrease the percentage of available credit that you are using, which helps your score.

Make Payments Responsibly

Payment history is the single largest factor in determining your credit score and it accounts for 35 percent of your total score. If you are consistently making late payments or have delinquent or defaulted accounts, it is nearly impossible to have a good credit score. However, you can start to improve your score immediately by getting your accounts current and making on-time payments because your recent history is weighted more heavily than missed payments farther in the past.

Read More

How Long Will a Foreclosed Mortgage Be on Your Report?

With over a million foreclosures in 2010, according to RealtyTrac, a real estate data firm, many people are concerned how these actions affect credit reports and the scores based upon them. Though it is not easy to predict how much a foreclosure will lower your credit score, the foreclosure itself must remain on your report for a significant length of time.

Credit Report

A credit report consists of your history with consumer credit transactions. These reports contain information such as how many credit cards you have, how often you pay your bills on time and whether or not you've declared bankruptcy. A foreclosure is a significant negative on your credit report, and according to the FTC, it must remain on your credit report for seven years.

Credit Score

Your credit score is a number derived from the information contained on your credit report. Various companies use this information to calculate a score that represents how safe a borrower you are given your past history. Your credit score will go lower if you have a foreclosure on your records, but how much lower depends on a variety of factors. Newer foreclosures have a greater negative impact, while those nearing the end of the seven-year required reporting period have a lesser negative impact.

Errors

Though you cannot have a legitimate foreclosure removed from your credit report for seven years, you can address mistakes or incorrectly reported foreclosures. A consumer has the right under the Fair Credit Reporting Act to challenge any incorrect or erroneous information on his credit report. You can challenge this information by contacting either the company reporting it or one of the three credit bureaus -- Experian, TransUnion and Equifax -- upon whose credit report the item appears.

Improvements

Though the negative effects the reported foreclosure has on your score will likely be significant after it is first reported, your credit score can increase over time. A credit score takes all your consumer credit history into account, and bases your score on numerous factors, including your history of payments, amount of credit you have available, types of credit used and the amount of debt you currently have. Improving any one of these factors will lead to an increase in credit score regardless of whether you have a foreclosure on your credit report.

Read More

How to Add Information to Your Credit Report

Credit history and credit reporting are extremely important while living in the United States. Credit reports can determine everything from the rate you pay on your car insurance to whether you can rent or buy a place to live. It's important to have a positive credit history and an accurate, error-free credit report. Occasionally people fall victim to identity theft and fraud, and to prevent further misuse they will need to add information to their credit report letting lenders know of this problem.

Instructions

Adding Information to your Credit Report

1

Download a copy of your current credit report. It's important to know what information is on your credit report now so you know what you need to add. You can receive one free copy of your credit report online or by mail per year from each of the credit reporting agencies. You can find more information on this in the Resource section.

2

Add your first credit account. It may be that you have no credit history at all if you are young and have not held a credit card or mortgage before. In this case, you must establish a credit account for it to appear on your report. The two easiest ways to do this are to get a secured credit card from your bank or by getting a co-signer like a parent or guardian with good credit to help you get a credit card or loan. Just by opening an account like this, the information will begin to appear on your credit report as the lender reports each month.

3

Add missing information to your credit report. Sometimes a positive account in good standing is left off of a credit report. It's best to report this error to the credit agencies when it will help boost your positive credit rating. If it's an account that has been late or in poor standing, don't bother because it will only hurt your credit score. You can add this missing information by visiting the credit reporting agency online and making an electronic request or by calling the agency directly. If you've ordered your credit report online, there will be an option to report errors and omissions on your download page. Just follow the link and provide the requested information such as the lender and account number that you wish to have included. The credit agency will do the work to verify the account and if it checks out, they will add it to your credit report the following month.

4

Add a consumer statement to your credit report. There are several reasons why you might want to add a consumer statement to your report. The most important is in cases of fraud or identity theft. You can put a statement on your credit report that says you've been a victim of fraud and not to issue additional credit without verbal confirmation from you. Another reason you may wish to add a statement is if you want to explain why there is a negative account on your card. Perhaps your mortgage or car payment was late because you were laid off at work or there was an illness or death in the family. You can add this statement so that when creditors are considering you for credit increases (or interest rate increases) or a new line of credit, they can take this information into consideration. The best way to add this information to your report is to write a letter and mail it to the reporting agency. Keep a copy of the letter for your files and then check after several weeks to make sure that your report was updated. You can find mailing information for each of the three credit reporting agencies in the resource section.

Read More

The Best Ways to Get Rid of Debt & Keep Good Credit

Few debts and a high credit score together make you an ideal candidate for loans and credit cards. Sadly, some consumers devalue the importance of maintaining low debts and they spend unnecessarily and use credit cards to pay for such purchases. Approximately 80 percent of American households use credit cards, and 44 percent of these families maintain a balance on these cards, according to the U.S. Department of Treasury. But even if you have high debts and bad credit, there are effective ways to flip your situation.

Exceeding Minimum Payments

Credit card companies require a minimum payment from consumers each month. And while this amount may prove convenient and affordable, paying this money doesn't reduce your debt fast. If paying a high interest rate on the credit card, minimum payments may only knock a few dollars off your principle balance each month. Get out of debt faster with higher monthly payments. Rather than send in a small $20 or $25 payment, get into the routine of paying double or triple this amount to bring down your balance, and use any extra funds to pay off the card.

Cash Only

Adopting a "cash only" policy helps get rid of debt because you're not tempted to spend money you don't have. Removing credit cards from your wallet and keeping them out of reach can help accomplish this. If you don't have the strength to store away your cards, cut them in half or have a trusted friend or relative keep the cards in their possession. Continue to use cash until you've completely paid down the balance. Only then is it okay to use credit cards. If possible, only use credit during an emergency, and always pay off new charges at the end of each month to avoid accumulating new debt.

Pay On Time

Eliminating debt is one step toward better credit. But while you're in the process of getting rid of debt, it's vital to maintain a good payment history and send in payments on or prior to the due date to avoid late fees and negative credit remarks. Lenders offer several payment options to help eliminate late payments such as telephone payment systems and online payment systems. Sign up for these services to help improve your payment history.

Check Credit Reports

Never checking your credit report can result in overlooking serious credit mistakes or identity theft, which can lower your credit rating. Free reports are available to each consumer from the three credit bureaus a year, and Annual Credit Report is authorized to supply consumers with this information. Check your report annually and challenge any discrepancies or mistakes.

Read More

How to Find Out What Declined Your Credit Check

There are few things more embarrassing than being told you've been denied credit. Whether you applied on the spot for a store chard card or you applied for a car loan, finding out that you don't have good enough credit to be able to qualify for a loan or a new credit card can be a blow to your finances--and your ego. If you have been declined credit, you usually are qualified to get a copy of your credit report for free.

Instructions

1

Wait for your decline letter to arrive in the mail. The letter of credit declination will list the issues that led to your credit being declined. There may be one reason or several reasons that led to your credit being declined. Some reasons may include bankruptcy, judgments or late payments.

2

Order a copy of your credit report from the three main bureaus: Experian, Transunion and Equifax. If you were declined credit, you can usually get a copy of your report for free. Additionally, you are entitled to one free credit report, per agency, per year through AnnualCreditReport.com, a government-sponsored annual credit report website (see Resources).

3

Inspect your credit reports to make sure that the information is correct and up to date. Your credit report may give you further clues about why your credit was declined. For example, if the letter stated that you were turned down for a history of late payments, you should be able to see which accounts on your credit report are listed as delinquent or late; look for the code next to the account that states 30, 60 or 90 days late.

Read More

How Credit Reporting Agencies Rank Scores

A credit score is the one number that sums up your credit habits and risk. These scores are determined by credit reporting agencies based on several factors.

Definition

The credit score used by lenders to determine credit-worthiness is also known as a FICO score, and FICO is an acronym for Fair Isaac Corporation, which created the FICO score in the late 1950s. FICO scores range from 300 to 850, with 300 being the lowest possible score.

Significance

Although the FICO ranking system's base is a score of 300, scores below 600 are generally viewed as a credit risk by most lenders.

Calculation

The exact calculation method used by Fair Isaac is not shared with the public, but, according to Mortgage News Daily, credit scores are determined based on these approximate ratios:

Payment history: 35 percent
Balances owed/available credit: 30 percent
Length of credit history: 15 percent
New credit: 10 percent
Types of credit: 10 percent

Other Factors

Too much activity on a credit report can affect credit scores. New inquiries for credit can lower your score by as much as five points, according to MyFICO.com's Credit Education Center.

Misconceptions

Your credit score is not the only determining factor for lenders when considering to extend credit. Lenders review your entire credit report to determine payment trends, but income and employment history are also taken under consideration.

Read More

Lowest Credit Score to Qualify for a Mortgage

During the height of the housing bubble in the 2000s, some borrowers could acquire a mortgage even with a score of 476---close to the minimum of 350 on the FICO score range, according to the Washington Post. In 2011, you probably need much better than a 476 to get an affordable mortgage, although some creditors still specialize in the demographic of customers with very low scores.

Identification

Lenders that cater to borrowers with low scores are called "sub-prime" lenders. Even this class of creditors probably won't lend to anybody with a score of less than 500 to 520, according to Bankrate. Usually, you must have a cosigner when your score dips below 550. It is not until you reach the 620s and above that you can probably get a mortgage on your own.

Considerations

In 2011, scores of 730 and above usually get the best annual percent yield and approval rates. Anything less and getting a mortgage is not a guarantee. Even for the government's Federal Housing Administration loans, which generally have more lax standards than the private sector, the average borrower has a score of 690, according to U.S. News and World Report.

The Down Payment

You can almost always make up for a poor credit score by increasing the size of your down payment. Mortgage providers typically require at least 3.5 percent down for all borrowers, but you if you increase this to 20 percent, your chances of getting approved would go up. Alternatively, you could use a down payment to lower your rate if you have okay credit.

Tip

Check your credit reports from AnnualCreditReport.com several months before applying for a mortgage so have enough time to fix any mistakes and take steps to pay down debt. Also, calculate your debt-to-income ratio---add your monthly debt payments from your credit report and divide by your monthly income. Lenders like to see a DTI lower than 36 percent. If you can knock off a significant portion of your debt and get a raise before applying for a mortgage, you might overcome a less-than-stellar credit score.

Read More