Benefit of Credit Monitoring

Credit monitoring automatically picks up changes in your credit reports and warns you about them, a service you pay with a monthly or annual subscription. This service is offered by Equifax, Experian and TransUnion, which are the three main credit bureaus, and various banks and independent companies. Monitoring helps protect your credit rating by keeping you aware of what is being reported in your credit bureau files.

Description

Credit monitoring covers one, two or all three of your credit reports, depending on the particular service you choose. Your monitoring company watches for activity on the reports and alerts you to potentially suspicious changes, like new application inquiries and newly opened credit cards or loans. Prices and coverage details vary, depending on the service details, but they can run as high as $50 per month, according to the Wall Street Journal. Banks sometimes offer plans that are cheaper than the credit bureaus.

Benefits

Monitoring does not directly protect you from identity theft, according to Consumers Union, because it does not keep your data out of wrong hands or stop thieves from using it. The service alerts you to problems so you can add fraud alerts to your credit bureau files, notify lenders that opened fraudulent accounts in your name and dispute resultant negative information on your credit reports. The alerts prevent further damage to your credit rating because lenders take more care in processing applications under your name and Social Security number.

Considerations

Credit monitoring offers an extra layer of protection for consumers whose identities were stolen in the past and people who do business with companies that suffer security breaches, the Wall Street Journal advises. Fraud alerts placed after identity theft or a database breach expire in 90 days, according to Leslie Hunt of the Bankrate financial site, unless you ask for an extension and provide a police report with the request. Thieves can open accounts in your name once your initial alerts are over.

Alternative

You have a free alternative to credit monitoring, although it only allows you to check your credit reports at four month to one year intervals. The website AnnualCreditReport.com is federally mandated to give you one free report from each credit bureau every 12 months, the Federal Trade Commission explains. You can split the orders any way you wish, as long as you do not order twice from the same bureau within one year. For example, you can order all three reports together or get one in January, another in May and the last one in September. Examine the reports for suspicious activity.

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How to Raise a Low Credit Score

A low credit score can have a devastating effect when it comes to getting those important loans you need, such as home loans, college tuition and vehicle purchases. A short credit history, late payments and large revolving credit balances will keep your credit score low until you do something about them. Improve a low credit score by injecting some common sense credit behaviors into your financial get-well plan.

Instructions

1

Work on a strategy for paying your bills on time. Keep a spreadsheet of your bills and when they are due each month. Set up automatic payments from your electronic bank account to ensure you are current.

2

Pay down all revolving credit balancesbelow 30 percent of your total credit limitand work to keep them there. Constantly flirting with revolving credit limits tells a lender you could easily get in over your head.

3

Avoid closing old credit accounts so your lender can see that you have a long credit history.

4

Do not open new credit accounts all at once, as this shortens your credit history. Sometimes this occurs when people chase lower credit rates, transferring their old balances to new credit cards.

5

Pay on a variety of credit types rather than only revolving credit. Lenders like to see this varietycar loans, revolving credit and mortgageso that they know you can handle any type of credit challenge.

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The Best Way to Obtain Your Credit Score

Once a year, Americans are able to receive free credit reports from the three major credit-reporting agencies: TransUnion, Equifax and Experian. Being aware of all three credit reports gives you a greater understanding of where you stand in your ability to receive credit. It can also illuminate any mistakes or identity theft that may be inadvertently compromising your rating. These agencies sponsor a website where you can request all three reports at the same time, making ordering easy and fast.

Instructions

1

Point your Web browser to the Annual Credit Report website (see Resources).

2

Select your home state from the pull-down menu and click on "Request Report."

3

Type your personal information, such as name, address, date of birth and Social Security number, into the appropriate fields.

4

Type the security phrase and click on "Continue."

5

Click the boxes next to the names of the three reporting agencies to request the corresponding reports.

6

Click "Next" to be transferred to the site of the first agency. Enter the last four digits of your Social Security number to validate the request. Continue to validate the requests for the other two agencies. After finishing, you will be taken to the "Order Summary" page. Click "Submit" to be taken to the "Verification" page.

7

Answer the personal questions on the "Verification" page to prove your identity and click "Continue." On the next page your will be able to review and print your first report.

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How to Get a Free Credit Score That You Can View Online

A credit score affects your chances of qualifying for a loan or a credit card and obtaining both at good rates. This number is based on the contents of a credit report, which is a record of an individual's credit activities. While you are eligible for one free credit report per year, there is normally a fee to obtain a credit score. Fortunately, many websites provide visitors with free access to their scores when they sign up for a trial membership.

Instructions

1

Visit a website offering free credit scores. Such sites usually provide this service when visitors register for a free membership trial for a specified amount of time.

2

Register for membership. Information required for registration usually includes the member's name, address and date of birth. It is also necessary to provide a method of payment as a sign of commitment. The company will not charge your account unless you decide to retain membership after the trial period.

3

Click on the option to view your credit score and provide the personal information required. This will include your social security number. The score will appear on the following page. Save the page or print it for your records.

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What Is an I1 Credit Score?

Credit reports sometimes use a secret language to tell creditors about your trustworthiness as a borrower. The code "I1" is a good thing to have on your credit report and you should have it on all accounts to maximize your score. Accounts that go past I1 status need immediate attention.

Identification

Some lenders use codes to report the history of an account, instead using plain English, such as "pays as agreed." The status I1 refers to an installment account that has never been late, according to Credit Engine. The letter is shorthand for the type of loan. "R," for instance, would be a revolving loan, and "O," an open account. This is the best possible status for an account. Anything more means the payer has been late and I0 means the accounts is too new to rate.

Benefits

Under the Fair Isaac Corporation (FICO) credit scoring method, paying an account on time gives you more points than any other category. The Fair Isaac Corporation keeps their formula a secret, but they do reveal that payment history falls under a category worth 35 percent of the FICO score on their website.

Keeping I1 Status

The I1 status on your account means you are doing an excellent job of paying it off, but you cannot be too careful with your credit. Automatic bill payment can make paying off an installment loan, which has the same bill every month, more convenient than manually entering in a payment. Do not, however, forget a bill after setting it to automatic; make sure you get a confirmation of each payment.

Tip

Every credit rating agency will give you a different score, so review your report from the three major credit bureaus periodically. Most agencies are moving away from from status codes. If you see an account has a code of I2 or later, or has a note that you were previously late, review your payment history. You can challenge errors with the credit bureaus using their online dispute form.

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How Selling a House Affects Credit

Consumers often obtain loans to finance large purchases and buying a home can be one of the largest purchases a consumer makes. A mortgage loan will appear on your credit report and so will the credit history associated with that account. If you're selling your home, it's beneficial to understand how this action can affect your credit.

Debt

If you have a mortgage loan on your home, selling it will affect the level of debt present on your report. Part of your FICO score reflects yout total amount of debt. This is 30 percent of your score. When you sell your home and pay off the associated mortgage loan, this reduces your debt levels. The less debt you have on an installment loan versus the amount of the original loan demonstrates that you can manage credit well and this will raise your credit score, according to FICO. Of course if you don't have a mortgage loan, selling your home will not directly affect your credit.

Credit History

Mortgage loans usually have a loan term of several years, even decades. Consumers generally take out mortgage loans with a repayment period of 15 to 30 years. Your FICO score includes within its calculations the average length of your credit history, which is 15 percent of the score. The longer your credit history, the higher your FICO score. Once you pay off your mortgage loan, some lenders may cease reporting that loan to the bureaus. Under federal law, however, they can continue to report it for up to 10 years if the history of the account is good and up to seven years if the account has derogatory information. The removal of the account can shorten the average length of your credit history, which can lower your credit score and can be especially damaging to your credit if that account is the oldest account on your report.

Credit Type

FICO also looks at the mix of credit types found of your report. Credit mix refers to the different kinds of credit accounts, such as credit cards, mortgage loans, charge cards, student loans and store cards, among others. FICO likes to see a variety of credit types since this indicates that you can manage credit across different platforms. Credit mix is 10 percent of your score and the removal of the mortgage loan can reduce the variety of credit on the report and this may lower your score as well.

Payments

Until you sell your home, make sure you keep up with the mortgage payments. At 35 percent, the bulk of your FICO score is how well you pay your debts. Delinquency on those accounts can have a very damaging effect on your score. One 30-day late payment can drop your FICO score by as much as 45 points. A foreclosure can be even more devastating since it can lower your score by up to 160 points. That can be the difference between good credit and bad credit.

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How to Clear Fraud From Credit Reports

Credit fraud is a general term that refers to the unauthorized use of someone else's creditworthiness to purchase goods and services. It is estimated that losses from credit card fraud amount to as much as $500 million per year in the United States alone.

Two of the most common types of credit fraud are identity theft and credit card fraud. Identity theft occurs when your personal identity is assumed, without authority, to commit credit crimes. Credit card fraud occurs when unauthorized charges are made on your card accounts.

Instructions

1

Get copies of your credit reports from the three credit agencies--Experian, Equifax and TransUnion. Each agency will maintain a credit report for you.

2

Examine your report. Check for accounts that you never opened, charges from unfamiliar sources, or any strange charges on the statements. Review each account carefully. Check out inquiries about your credit. Verify information, such as your address, and ensure that it is accurate.

3

Document any suspected fraud. Once you have scrutinized your credit report, gather all of the documents pertaining to the suspected accounts. It is important that you have complete documentation on file for all of your legitimate transactions.

4

Notify the creditor. Once you believe that fraud exists, alert the creditor by telephone and in writing. Identify yourself as a victim and state that you would like to file a claim for fraud. Ask for their help and cooperation. Request that the activity be "frozen" on the suspected accounts.

You need to extend your full cooperation to the creditor so that you are not held responsible for the account. If it is credit card fraud, immediately advise your credit card company of the fraud discovery and cooperate with them to correct the anomaly. Most creditor companies will issue a replacement card with a different account number.

5

Notify the credit reporting agency. The Fair Credit Reporting Act requires that all of the reporting agencies provide all data to correct an error, if indeed an error is committed. You have to file a dispute on the identified fraud and support your claim with documents and information that will prove your contention.

6

Notify the police and the Federal Trade Commission about identity theft. If you suspect that someone is using your social security number or other information to get credit, report the matter to the authorities with jurisdiction in your area. A police report may be needed to convince the creditors that a fraud is being committed in your name. If you want enforcement, the Federal Trade Commission's identity theft division is the government agency that will initiate law enforcement action on identity theft cases.

7

Obtain an updated credit report. Get a fresh copy of your credit report a few months after you have made efforts to clean it up. If the disputed cases have disappeared, your credit report should reflect your true financial standing.

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How Long Does it Take for Credit Requests to Fall Off the Credit Report?

Most items on credit reports do not remain forever. The Credit Infocenter credit repair website explains that most negative things, like late payments, charge-offs and repossessions, are erased after seven years, while bankruptcies remain for 10 years. Some things, like tax liens, remain indefinitely unless they are paid. Credit requests have their own time frame, which is shorter than most other items.

Definition

Credit requests are also known as hard inquiries, according to Bankrate columnist Leslie McFadden. They represent an inquiry by a lender in response to a consumer's credit application or loan request. Soft inquiries are requests that are not directly related to applications. For example, a company may make an inquiry prior to sending a promotion offer or a person might request his or her own credit reports to check them for mistakes.

Time Frame

Both hard and soft inquiries show up on credit reports for two years, although soft inquiries are not viewable by creditors. McFadden explains they only show up when someone reviews his or her own reports. These inquiries may stay on longer, but the consumer can dispute old inquiries and have them removed after the 24-month period. Credit score companies use different time frames for considering requests. McFadden explains that FICO, a major score compiler, only factors them into its calculation for one year, while one of its competitors, VantageScore, counts them for as long as they appear on a credit report.

Effects

Soft inquiries have no effect on a person's credit score, but requests in response to an application can hurt it. According to Sarah Davis of VantageScore, a single hard inquiry can cost up to five points, with the worst impact on consumers who have sparse credit histories.

Considerations

People often fill out several applications when shopping for big ticket items like cars or major loans like mortgages and students loans. McFadden explains that credit scoring companies take this into account. They generally lump requests together and view them as one inquiry if they all occur within a certain time frame. This could be from 14 to 45 days, depending on the credit scoring firm.

Prevention

FICO explains that consumers can prevent credit inquiries from significantly hurting their credit by maintaining overall good records. This includes maintaining low accounts balances, making all payments by the due date and applying for new credit only when necessary. A high score will not drop low enough to affect creditworthiness just because of a few requests.

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How Much Will Having Excess Debt Lower a Credit Score?

Excess debt is an important factor in calculating a credit score, but it is not the only consideration. Three credit reporting agencies maintain credit file information; each agency uses a different model to calculate a credit score. How much having excess debt will lower your credit score is calculated in percentages and factored into the overall credit rating.

Definition

A credit score is a three-digit number that reflects a person's credit worthiness at a specific point in time. Potential lenders, banks, insurance agencies and employers use credit scores to determine whether an individual qualifies for a loan, receives overdraft protection on a bank account, gets a job and the rate of his insurance premiums.

Factors

Several factors impact a credit score, including payment history, public records, new credit accounts, credit inquiries, types of credit, length of credit history and the amount of outstanding debt. Of these factors, payment history plays the largest role, 35 percent, and the amount of outstanding debt is a close second at 30 percent, according to myFICO.com.

Calculation

The outstanding debt factor of the overall credit score is calculated as a credit-to-debt ratio. To calculate a credit-to-debt ratio, divide the total amount of outstanding debt by the total amount of credit available. For example, if you owe $4,500 in credit card debt and have $8,000 in available credit, your credit-to-debt ratio is 56 percent. A debt load in excess of 50 percent will increasingly lower your credit score.

Options

The credit-to-debt ratio includes all of available credit listed on the credit report. Old credit accounts in good standing with zero balances are part of the available credit portion of the calculation. The fact that there is no outstanding balance on the account is a positive factor in your credit score calculation. Closing old credit accounts will lower your available credit and increase your credit-to-debt ratio. Leave old accounts open; not only do they figure into the outstanding debt portion of your score, they are part of the credit history factor that makes up 15 percent of your score.

Conclusion

Excess debt from revolving accounts and installment loans can lower your credit score. How much it will lower your score depends on the other factors involved in the calculation. The closer your outstanding debt is to your available credit, the lower your credit score will be. Keep your credit-to-debt ratio lower than 50 percent to lessen the impact on your credit score.

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Defaults on Your Credit History

Credit histories are compiled by three credit bureaus -- Experian, TransUnion and Equifax. Every person who uses credit cards, takes out loans or makes similar transactions has a file with those bureaus. Some actions, like timely payments, are positive entries on credit reports. Defaults are credit history blemishes because they show an unwillingness to pay owed accounts.

Definition

Defaults on a credit history are unpaid accounts. Credit card companies try to get customers to send payments within a month or two of defaulting, but Liz Pulliam Weston of MSN Money explains that they usually charge off the account if nothing is received within six months. The charge-off status shows up on credit reports, but the company may still have its own collectors try to get payment or sell the debt to an outside debt collector.

Time Frame

A defaulted account shows up on a person's credit history for seven years, according to the Federal Trade Commission . This period starts from the day the first payment was missed. A defaulted account that is sold to a debt collector may show up twice on the account holder's credit history. The original account remains, and the collection agency can add a collections notation. This entry can only remain for the same seven-year period as the original entry. The time frame does not restart with the sale of the debt.

Effects

Defaulted accounts look bad on credit reports, and they hurt the credit score of the account holder. Charge-offs are one of the most common reasons for credit application denial, according to Steve Bucci, who writes the Bankrate.com Debt Adviser column. Lenders fear that someone who did not pay one account with do the same with others.

Solution

Defaults can sometimes be erased from credit histories by paying the debt. Paying the owed amount or a smaller agreed-upon settlement is not enough to get rid of the negative entry. The credit card company will mark it as paid, but the delinquency still shows. Bucci recommends making it a condition of the pay-off that the collection agency change the entry to a positive status like "paid as agreed" or completely remove the entry from the credit report. Ask the company to confirm the agreement in writing before paying.

Considerations

Consumers are allowed to check their credit histories for free every year. Consumers are entitled to one free report from each of the three bureaus, but they must go through an official government website, annualcreditreport.com. Providing free reports lets people who negotiate settlements make sure the creditors or debt collectors followed through with erasing the negative entries.

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Reputable Places to Get a Credit Report

The Fair Credit Reporting Act gives consumers free access to credit reports from the three major bureaus -- Experian, Equifax and TransUnion -- each year. Consumers can receive their reports once a year. In addition, they can also choose to purchase their scores directly from the bureaus. While a variety of companies claim to offer free credit reports, there are four places online that provide consumers with a legitimate and reputable place to obtain a credit report.

Annual Credit Report

Annual Credit Report is the only source authorized by the Federal Trade Commission as a provider of credit reports. In addition to the online service, consumers also have the ability to request copies of their credit reports via phone or mail. Consumers will receive a copy of their report from Equifax, Experian and TransUnion.

Experian

Experian offers consumers the opportunity to purchase their credit report straight from the bureau. In addition to providing credit reports, Experian also offers credit education programs to help consumers manage credit and protect against fraud. After viewing a report, consumers can also dispute inaccurate information online. Experian also offers identity theft protection services and credit monitoring, providing customers with daily monitoring services of all three credit bureaus. If a change is detected in a credit report, the user is notified via email. As of 2010, a credit report can be purchased directly from Experian for $10.

TransUnion

TransUnion offers not only the opportunity to purchase a credit report, but also the opportunity to see the six factors that are used to determine your credit score. The company also offers identity theft protection services and tells users what their level of risk is. Online disputing is available for those with inaccurate information on their reports. Consumers may also take advantage of TransUnion's credit monitoring services that allow consumers to monitor their reports across all three bureaus. As of 2010, TransUnion services cost $14.95 a month after the free trial program.

Equifax

Equifax offers consumers the ability to view and monitor all three of their credit scores on a monthly basis through the Equifax Complete program. Users will receive all three reports once a month, along with unlimited access to their Equifax report. Credit monitoring services are also available across all three bureaus as well as identity theft protection. Equifax also offers an interactive score estimator to help consumers find the best ways to increase their scores. Individuals may also dispute incorrect information online. As of 2010, Equifax services are available for $14.95 a month. Equifax credit reports can be purchased separately for $10.50.

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What Does the Term "Revolving" Mean on a Credit Report?

A credit report is a list of most, if not all, of a person's history regarding their financial accounts involving credit. This credit can come in a wide variety of types, including mortgages, car loans, credit cards and even simple short-term loans. The information is used by lenders to determine how they want to handle an application for credit. Here's a brief explanation of the term "revolving" that is often found on credit reports.

Significance

There are many types of credit available in today's financial world. For some lenders, certain kinds of credit accounts are more important than others. In order to distinguish between various types of credit, the term "revolving" appears on accounts in which the credit extended to the borrower is not tied to a specific repayment period.

Types

There are several types of revolving credit loans. The most common are credit card accounts which extend a loan to a customer with each charge up to the credit limit. Other kinds of revolving credit include home equity lines of credit or HELOCs (though not home equity loans), store credit and certain kinds of business lines.

Benefits

Revolving credit allows a borrower to get access to funds when needed and then pay them off when desired without having to reapply for credit again in order to re-borrow funds again at a later date.

Considerations

The highest credit scores require a history that includes a blend of multiple types of credit including revolving credit accounts. A person with only credit card accounts would have a lower score than someone whose credit history includes non-revolving accounts such as car loans or mortgages.

Misconceptions

Revolving accounts are one of the most misunderstood accounts when it comes to their affect on a credit score. Many people pay off their credit cards each month and therefore assume that their credit score reflects a zero balance. However, credit history is often reported on a specific day and if the account has a balance on that day, that balance will be reported, regardless of if it is paid off in the next day or two. Thus, paying off a card each month seldom results in a zero balance being reported.

Prevention/Solution

It is important to monitor your credit report regularly. Revolving accounts are most frequently targeted for fraud. Get your free credit report each year and make sure there is nothing unusual in it.

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What Is the Fastest Way to Clean My Credit?

A person with a bad credit rating can expect to see his financial problems compounded by his inability to take out loans at low rates of interest. This person will likely have a strong interest in repairing -- or "cleaning" -- his credit report, the information used to make up his credit score. While cleaning credit may be a long process, there are a number of steps individuals can take in the near term.

Look at Credit Report

The first thing a person should do before setting about cleaning his credit report is to determine what's in it. This can be done by requesting a copy of the report. Under U.S. law, a person is allowed to look at his credit report once a year without any charge. This can be done by visiting AnnualCreditReport.com, a website maintained by the U.S. government, which is listed in the Resources section.

Fix Errors

When looking at his credit report, a person should be on the eye for errors, particularly those related to debts that he did not take out or debts that he already paid off. If a debt is incorrectly listed as being paid off late or not at all, the person's credit score may take a hit that it does not deserve. Any errors should be reported both to the creditor who reported the debt and the credit reporting bureau maintaining the report.

Pay Off Debts

A person seeking to clean up his credit rating should also be prepared to pay off a large amount of his debts. Any late or unpaid debts will drag down the person's rating, as will a high ratio of outstanding debt to open credit. To improve this ratio, a person should either pay down his current debts or take out new credit. A good average ratio is between 20 percent and 30 percent.

Take Out New Loans

To help improve his rating, a person needs to show a credit reporting bureau that he is capable of paying off loans that are issued to him by creditors. To do this, the person should take out new loans and then pay them off in full and on time. If the person has a poor credit rating, he may wish to start out by taking out loans using a secured credit card, which is like a normal credit card, but with a bank account used as collateral.

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Fastest Credit Repair

Fast repair of your credit doesn't have to involve spending money each month on a credit repair service or debt counseling. True, these services can help improve your credit score and remove mistakes from your credit report. However, you can achieve the same results on your own without spending a dime. There is no magic formula to repairing your credit. The key is acknowledging your mistakes and making better decisions.

Significance

Some people may downplay the significance of a good credit score. However, bad credit complicates the application process for a mortgage or auto loan. Lenders will note your low score and likely charge you a much higher interest rate, or offer undesirable terms. Applicants with a prime credit rating attain the best deals, and fixing your credit can help you save money on loans.

Considerations

Major credit blunders like filing for bankruptcy or living through a foreclosure can reduce your credit score by several hundred points. Regaining these points and repairing your credit history takes time. You can speed this process by acquiring a new line of credit immediately after mistakes to re-establish credit quickly. Secured credit cards are the easiest type of credit to acquire with bad credit. The security deposit you pay to your bank serves as collateral.

Prevention/Solution

You can stop bad credit and quickly repair your score by adjusting the way you manage your bills. Late payments are detrimental to your credit score. A history of paying bills late or skipping payments puts potential lenders and creditors on guard, and they are less likely to approve your loan and credit applications.

Warning

Some consumers are unaware of the credit damage that results from owing high credit card debt. MyFico.com advises that the amount you owe on unsecured debts account for 30 percent of your credit score. Someone with a maxed-out credit card is more likely to have a lower credit score than someone who pays off his credit card each month.

Expert Insight

The Federal Trade Commission recommends regular credit report checkups to ensure that your creditors report accurate information. Requesting reports yearly is the best way to monitor your personal record. Contacting the credit bureaus in writing is necessary to challenge errors and inaccurate updates.

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If I Let My House Go in a Short Sale, Will It Ruin My Credit?

If you are behind on your mortgage payments and the lender threatens foreclosure, a short sale could save you money and reduce the chances of future litigation. Like any debt settlement, a short sale will severely damage your credit. A short sale, however, will not prevent you from getting credit again even if it ruins your credit for a couple of years.

Score Drop

Short sales, foreclosure and deed-in-lieu of foreclosure all drop credit scores by 200 points or more, because they show the lender you could not handle a large loan. The actual impact on your score depends on your rating prior to the short sale; high scores take a bigger hit than low scores.

How Bad is This?

If you already have excellent credit--close to 760--a short sale leaves you in the range of 560 to 580, which puts you into the highest risk category. FICO scores, however, treat short sales better than foreclosures and you can probably find another mortgage if you have good payment history for the next year or two. With foreclosure, it will take at least three years to qualify for a mortgage again.

Considerations

Most lenders will not approve of a short sale until the mortgage goes into default. Also, many people simply stop paying money on a home they know they will lose anyway. These months of late payments do additional damage to your credit score. A lot of the lingering effects of short sales depends on how the lender reports it. If the short sale does not cover enough of the mortgage, the lender could report the deficient balance as unpaid, unless you live in a state that eliminates deficiencies on foreclosure and short sales--called a non-recourse loan. Unpaid balances will damage your score further.

Do You Have a Choice?

Most of the time, if you let your mortgage payments fall behind by more than 180 days, the lender has the majority of the power to decide whether to foreclose or approve a short sale. The Boston Globe suggests listing a home as a short sale as soon as you expect to lose your house so you can find a buyer quickly and then present the offer to your bank.

If the bank approves your short sale, consider hiring an attorney to ensure the provisions of the short sale include a waiver of liability for any potential expenses, such as property tax and deficient balances.

Tip

Try to fix whatever problems led to the short sale. If you overspend, cut out frivolous expenses, such as eating out, and pay down any other debts. Good payment history is the biggest factor in your credit score. A new line of credit could help build excellent credit on a new account. You probably, however, only qualify for a secured credit card, with a credit line based on whatever collateral you put up. Just make sure to use less than 30 percent of your available credit.

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Can I Repair My Credit by Myself or Is it Better to Use a Credit Repair Service?

The information in your credit report helps determine your credit score. Your credit score and report are then reviewed by lenders when evaluating you for credit. Negative information or a low score can either prevent you from obtaining credit you desire or an cause you to pay a higher interest rate. Repairing issues in your credit report can improve your credit score and credit report.

What Does Credit Repair Involve?

Credit repair is a loose term used to describe fixing or correcting any issue within your credit report. Credit reports contain a large amount of information and often have mistakes. Credit reports show all accounts with late payments, charged off accounts and collection accounts. The more items you are able to resolve, the better your credit report and score will be. Credit repair is limited. You cannot just call and request negative accounts be removed. You must follow certain steps and procedures to be successful.

Credit Repair Services

Credit repair services operate on a fee-based schedule. According to the Federal Trade Commission, credit repair services cannot charge you for services in advance. A credit repair service does a great deal of work for you. The company will review your credit reports and send off dispute letters to the credit bureaus for you. Some companies offer a service to contact creditors to reach settlements for you. Exactly what is offered depends on the company. Credit repair services cannot and do not do anything you can't do for yourself; however, this does not mean there isn't a value to the services. For someone who does not have the time or desire to research laws and proceed accurately, a credit repair service can be of use.

Can I Do It Myself?

Credit repair services do not have secret tools to perform tasks you can't perform yourself. A credit repair service has experience and doesn't have to figure out how to do a certain task, but if you have time and the desire, you can do the credit repair yourself. You should proceed with caution if you are unable or unwilling to take the time to read and learn about credit repair. It is possible to make your credit situation worse if you do not know what you are doing. For example, you may have a positive account reporting an incorrect balance. If you contact the credit bureau to correct the balance, and the creditor fails to respond to the investigation within 30 days, the entire trade line is deleted and will not come back on your report. This means your credit report has now lost a positive account. This can damage your credit score severely depending on the circumstances.

Cautions

Read and learn about credit repair before you attempt to do anything. Some important things to keep in mind while beginning your credit repair include how to deal with debt settlement offers and negotiations and that paying a charged off debt will not help your credit score. Learn how to dispute accounts on your credit report and which accounts to dispute -- never dispute a positive account unless the account is a result of identity theft. Find the statute of limitation on debt in your state, and be careful disputing any account that is within the statute of limitation. Disputing the account while within the statute of limitations may bring attention to your case and result in the creditor begin to pursue legal action to recover the debt.

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How to Improve a Credit Score After Foreclosure

No one can say for sure how much a foreclosure will affect your credit score. The website MyFICO.com calls it only "a very negative event," with the impact lessening over time. People with great credit other than the foreclosure may bounce back more quickly than people who also have had other credit issues.



MyFICO.com says a common misconception is that a foreclosure will ruin your credit for a very long time. The site says your credit score can begin to rebound in about two years.

Instructions

1

Pay your remaining credit accounts on time. Never missing a payment on your accounts can show creditors that your foreclosure was an isolated event, if that was the case.

2

Resolve any other delinquent accounts by making payments. In your efforts to save your house you may have defaulted on other accounts, such as credit cards. Improve your credit score by addressing all charge-offs, collection accounts, judgments, liens or other problems.

3

Apply for new credit. Establishing new credit lines with positive payment histories will help offset some of your bad credit, if applicable. Unsecured credit may be hard to come by immediately after a foreclosure. If you are turned down for unsecured credit, apply for a secured MasterCard or Visa credit card from your bank or credit union. A required deposit into your savings account serves as collateral, and your credit line will equal the amount you have on deposit. The collateral makes the account easy to qualify for, and you'll improve your credit score over time as you keep your balance low and make timely payments.

4

Get a secured installment loan and a second secured credit card after several months. An additional deposit into your savings account should also make it easy to qualify for the installment loan. Deposit the proceeds from the installment loan into your savings account and authorize the bank to withdraw the monthly payment automatically. Continue making regular payments on all your accounts for 12 to 24 months as you improve your credit score following the foreclosure.

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Credit Card Companies Can Remove Negative Information From a Credit Report

Negative information on your credit report can make it much more difficult for you to obtain new forms of credit and good credit rates and it can impact your current credit terms. If you have any negative information on your report from your credit cards, you can sometimes have it removed.

Credit Reports

Your credit report contains information about your past activity as a user of credit instruments such as car loans, mortgages and credit cards. These reports are maintained by the three main credit reporting agencies, or CRAs: Experian, TransUnion and Equifax. Each company maintains its own reports and relies on the information provided to it from creditors for accurate and up-to-date information.

Credit Card Companies

When you use a credit card, the company that issues your card typically reports your behavior to one or more of the three CRAs. These reports include such activity as how much you owe on your card, how much you pay when you make a payment and whether you make on-time or late payments. The credit card company determines what information to report, but once the information has been reported, it is up to the CRA to add it and keep it on the report.

Reporting Errors

If the negative information about your credit card on your credit report is incorrect, you can challenge it by either contacting the credit card company or the CRA reporting it. You can contact the company in writing and provide evidence backing up your claim, though you should only send copies, not original documents. You can also file an online complaint through the CRA's website or add a statement to the credit report stating that you believe the item is in error.

Goodwill Adjustment

Some financial advisers, such as Liz Weston of MSN Money, advise that consumers who have had an otherwise positive credit history can ask the credit card company for a "goodwill" adjustment. When you ask for a goodwill adjustment, you ask the card company, usually in writing, to remove the bad item from your credit report by asking the CRA to do so. This is usually more effective than asking the CRA to do it yourself, though the credit card company is under no obligation to grant your request.

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7 Year Statute of Limitations on Your Credit Report

A missed payment will appear on your credit report for seven years. This is an important fact as you consider future financial plans. For example, buying a home may not seem important to you when you're young or in college, but seven years later the credit required to make a major purchase may be a priority. The idea is to take care of your credit today just in case you need it later.

Accuracy

As a matter of practice, you should check your credit report on a regular basis, looking for any inaccuracies. According to the Fair Credit Reporting Act, or FCRA, only factual information can remain on your credit report for seven years.

Challenge Mistakes

If you find anything on your credit report that is outdated or incorrect, you have the right to challenge it. It then becomes the duty of the credit bureau to verify that the information contained on your report is correct. Send a certified letter to the credit bureau, clearly outlining the mistakes, and keep a copy for yourself. The credit bureau must then contact your creditor. The creditor must be able to provide verification precisely as it appears on your report and report back to the credit bureau. The credit bureau has 30 days to gather this information . If bureau officials are unable to verify that the negative credit remark is accurate, they must promptly delete it from your report.

Three Major Bureaus

TransUnion, Equifax and Experian are the three major credit reporting agencies. Websites such as AnnualCreditReport.com offer consumers one free copy of reports from each agency once a year. Check all three credit bureaus for any inaccurate information and contact each agency separately regarding any mistakes on the report.

The Seven-Year Clock

The seven years begins at the time you miss your first payment. The FCRA says anyone trying to collect a debt cannot do anything in an attempt to extend the time a negative remarks stays on your credit report.

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How to Get Out of Debt Without Ruining Your Credit Score

Getting out of debt is a lofty, but good goal. Many borrowers find it hard to get out of debt, and resist future temptation, without potentially doing damage to their credit score. The key is to know what can negatively impact a credit score and to plan accordingly. Through the use of budgeting techniques, you too can get out of debt without ruining your credit score.

Instructions

1

Formulate a budget to begin to pay down debt. Place all monthly expenditures into categories and analyze your budget to see if there are any areas where reductions can be made.

2

Contact your lenders, especially credit card companies, to see if they will reduce your interest rate, if you have paid your bills on time for at least the past year.

3

Earn extra funds, if at all possible, to speed up your debt repayment process. Earn extra cash with a garage sale or sell items online.

4

Set aside three to six months living expenses before debt repayment. This becomes your emergency fund to tap into, as opposed to tapping into additional debt.

5

Rank your debts according to minimum monthly payment. Begin paying extra on the smallest monthly payment, with the money found in your budget and earned through extra work or projects. Continue paying on that debt until paid in full. Now, tackle the next smallest monthly payment by adding all the extra funds plus the smaller card's minimum payment to that debt until paid in full. Snowball your payments in this manner until all debt is paid in full.

6

Resist the urge to close open lines of credit, such as credit cards and home equity lines of credit. Closing them will hurt your score. Keep them open by simply charging one item per month on the card--such as a tank of gas--and pay the balance in full at the end of the month to prevent interest expense.

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Does Foreclosure Affect the Executor's Credit?

Death is part of the human life cycle. Once a person dies, those left behind must not only make funeral arrangements but must wrap up the financial affairs of the decedent. An executor is responsible for overseeing the estate of a person whose has passed away. It's prudent to understand how a foreclosure can affect the credit of the executor.

Considerations

The executor of an estate is responsible for overseeing the estate of a person whose has passed away. The executor can be a relative of the decedent or a non-related individual. The duties of the executor vary according to the size and complexity of the decedent's estate. Among other duties, the executor ensures that the decedent's bills and taxes are paid, determines if the estate must enter probate, distributes property according to the decedent's will or, if no will is available, according to the statutes under state law.

Significance

According to myFICO, a FICO credit score is based upon the items contained within a consumer's credit report. A foreclosure occurs when the lender retakes possession of a property from a borrower, usually due to lack of payment. A mortgage loan and its subsequent foreclosure will appear on a credit report; however, unless the executor is a party to the actual mortgage loan, a foreclosure on the property of the decedent will not affect the credit of the executor since the foreclosure does not appear on the executor's credit report.

Warning

If the executor is a spouse or other individual who also happens to be a party to the mortgage loan and is thus responsible for its payment, then a foreclosure by the lender will appear on the executor's credit report. A foreclosure is a negative item to have on a credit report and it will have an adverse impact on the executor's FICO credit score. According to MSN Money, a foreclosure can drop your FICO credit score anywhere from 85 to 160 points.

Consequences

Under the Fair Credit Reporting Act, negative items, such as a foreclosure, can appear on a credit report for up to seven years from the date of the foreclosure. It will display on the credit report as a public record and is visible to anyone who accesses the credit report. Also, some states allows lenders to sue mortgage owners for the difference between the price the house sold for after foreclosure versus the balance still owed on the loan. If the lender sues and obtains a judgment for this amount, called a deficiency, this judgment will also appear on the executor's credit report.

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What Does High Risk Fraud Alert on a Credit Report Mean?

High risk fraud alerts are one of the cheapest ways to stop an identity thief from stealing under your name. Creditors, however, can render this fraud prevention ineffective if they choose to ignore the proper protocol when consumers have an alert on their profile. If you want better protection than a fraud alert, you should look into a credit freeze.

Identification

When consumers have a high risk fraud alert on their credit report, the lender is supposed to ask them to furnish appropriate identification, such as a drivers license. The alert is a note included in the credit report that tells the lender that somebody might be trying to take out a loan in your name. Anybody can request an initial alert by contacting one of the three major credit bureaus, who will then notify the other agencies once they approve your request. The initial alert lasts for 90 days.

Extended Fraud Alert

An extended fraud alert stays on your credit report for seven years, but to get one requires more than just a phone call. You must be a victim of identity theft and provide proof, such as a police report. Alternatively, you can request an initial fraud alert every 90 days as many times as you want. Initial alerts, however, are less secure because you could forget about it or it might prove too inconvenient. The thief might not even use your stolen information within 90 days.

Downside of Fraud Alert

The law on taking proper measures to verify identity when a lender sees a fraud alert is extremely vague. More often than not, lenders simply ignore fraud alerts, according to MSN MoneyCentral. Also, fraud alerts are useless for protecting existing accounts, because lenders have already approved the account. The verification process for a fraud alert can delay an application for credit, especially time-sensitive special offers.

Removing Fraud Alert

The major credit rating bureaus have printable, online forms so customers can request the removal an alert. You will have to fill this out and send it via snail mail and include verification of your identity before the agency agrees to remove a fraud alert.

Alternative to Fraud Alert

The three major credit bureaus are required to give one free credit report--which does not include a score--each year. You cold request one every four months and monitor your own credit. You could do a credit freeze. A credit freeze stops anyone from looking at your report. The downside to this is the hassle. You will have to approve each lender before he can look at your credit report. The benefit is that a would-be thief cannot take out a loan in your name unless he finds out your special PIN or password. Also, you will have to pay about $10 for a credit freeze with each bureau as of 2010.

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How Can I Get My Credit Scores Without the Credit Monitoring?

Getting access your credit score can give you an idea of where you stand with borrowers and how much you need to improve before applying for a loan. When you get online and start to try to get your credit score, you may find many offers that include your credit score with a credit monitoring service. If you do not want the credit monitoring service, you can still get your score.

Free Credit Reports

According to federal laws, you are eligible to receive a copy of your credit report from each of the three major credit bureaus every year for free. You can get a copy of your credit report without paying for credit monitoring or anything else. The problem with this free credit report is that you cannot see your credit score. The credit score is calculated off of the information in your credit report, so you will have an idea of whether it is good or bad, but you will not know the exact score.

Credit Monitoring Offers

On many of the websites that offer access to your credit score, you also have to sign up for a credit monitoring service. For example, you might get access to your credit score but you have to enroll in a credit monitoring service that charges you $20 per month. You might get a free trial period in the credit monitoring service and you can cancel at anytime. While this will give you access to your credit score, you have to go through the trouble of canceling the credit monitoring service.

Buy Credit Score

Although you cannot get your credit score with a copy of your free credit report, you can buy a copy of your report with your score attached. You can buy the score directly from the credit bureaus or you can go to the Fair Isaac website. For example, you can buy a copy of one of your credit reports from FICO that includes your credit score for a one-time fee. When you do this, you do not have to worry about being signed up for credit monitoring.

Considerations

Although a credit monitoring service may not seem like something you want to get involved with, it can sometimes be cheaper to go that route. When reviewing the terms of the offer, check out the price and exactly what you get. In some cases, you may be able to gain access to all three of your credit reports and scores for a cheaper price than what you can pay for a one-time look at your credit reports. Then you could cancel the monitoring service.

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If I Pay Off My Credit Cards in Good Standing Will That Increase My FICO Score?

Paying off credit cards in a timely manner sounds like a positive action, but its effects on a consumer's credit score is mixed, according to the FICO score compiling firm. Certain aspects of a payoff are positive, but others are neutral or even potentially harmful when weighed against other factors.

Definition

The Consumer Federation of America explains that a FICO credit score is a three-digit number ranging from 300 to 850 that gives a fast indicator of a person's likely creditworthiness. Lenders are more likely to give credit to consumers with scores above 700, while they avoid people with scores below 600, or charge inflated interest rates to offset the risk.

Factors

FICO credit scores are compiled based on a variety of financial factors, including credit card payments and balances. FICO explains that it also looks at how many accounts a consumer has, balances, credit lines, how long accounts have been open and the number and length of any delinquencies. It gets this information from credit reports, so the score can change regularly as lenders and banks report new information, including account payoffs.

Benefits

A FICO score is always helped by keeping a credit card in good standing with on-time payments. Of the total score, 35 percent comes from a consumer's payment histories on credit cards and other accounts. Paying off a card completely lowers a person's total outstanding debt. This may raise the FICO score if the original debt load was high.

Drawbacks

A credit card with a zero balance gives the person more available credit. Too many inflated limits can hurt the credit score, FICO warns. Paying off all credit cards eventually lowers a credit score if the consumer stops using them completely. FICO looks at a consumer's mix of accounts, and no active credit can be harmful. The paid-off accounts usually drop off credit reports in seven years, after which they no longer count toward the credit score. It will go down if there is more recent negative activity.

Considerations

Consumer advocate Clark Howard recommends periodically using paid-off credit cards and paying the bills immediately to create recent positive activity on credit reports. The cards can be used every few months for modest transactions. Paying the statement in full as soon as it is received prevents any interest charges. The prompt payoffs help increase the FICO score when they show up regularly on credit reports and get figured into the score.

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Define Credit Bureau

Credit plays a large role in American society. Consumers use credit when making purchases and obtaining loans. There are three major credit bureaus: Experian, Equifax and TransUnion. Each maintains its own unique database of consumer information.

History

In 1899, the first major credit reporting agency, Retail Credit Co., came into existence. The company sold its consumer reports to employers and insurers, and expanded by buying up small credit reporting agencies.

Significance

Credit bureaus house both personal information and credit information on consumers. According to TransUnion, its database alone contains credit files on 500 million consumers around the globe.

Function

Lenders report consumer data to credit bureaus, although they are not required to. Credit bureaus then make this data available to lenders and other credit providers in the form of a report. Bureaus assemble one report for each consumer.

Features

Credit reports contain personal information, such as name, Social Security number, address, positive and negative account data and inquiries from lenders. It also contains public records and collection accounts.

Misconceptions

Under the Fair Credit Reporting Act (FCRA), consumers have the right to dispute incorrect data on a credit report. The bureau then has 30 days to investigate and make corrections. Bureaus are not, however, required to remove accurate, negative information from a credit report.

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Will Cancelling Credit Cards With High Available Credit Hurt My Credit Score?

Your balances owed account for thirty percent of your credit score, according to the Fair Isaac Corporation. Part of this category includes the ratio between you debt and your available credit.

Debt to Available Credit Ratio

You calculate your debt to available credit ratio by dividing your outstanding balances on your credit cards by your total credit limit. For example, if you have four credit cards with a total credit limit of $15,000 and $4,500 in credit card debt, you would be using 30 percent of your available credit. MSN Money recommends keeping the ratio below 30 percent.

Effects

Canceling credit cards with high credit limits can drastically increase your debt to available credit ratio, which will lower your credit score. Continuing the example, if you closed one of the four credit cards that had a credit limit of $6,000, your available credit would drop from $15,000 to $9,000 and your debt to available credit limit would rise to 50 percent ($4,500 out of $9,000).

Considerations

When you close a credit card, you stop generating credit history from that account. If you always pay the card on time, even if you don't have to make a payment because you have no balance, you will continue to improve your payment history, which accounts for 35 percent of your credit score.

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Credit Reporting Bureaus

Credit reporting bureaus gather information about consumers' financial information to determine how creditworthy they are. They then sell this information to lenders.There are three national credit bureaus and a number of smaller credit bureaus throughout the country. Most of the smaller ones are affiliated with one of the three larger bureaus.

National Bureaus

There are three national credit bureaus: TransUnion, Equifax and Experian. Equifax is the oldest and was founded in 1899. TransUnion was founded in 1968, and Experian in 1980.

Information Sources

The bureaus get their information from banks, credit card companies, utilities companies and collections agencies. Each time your payment is due, the creditor reports whether you paid it and other basic information about the account. Credit bureaus also have access to public records, so they report items such as judgments, bankruptcies and collections.

Credit Scores

Credit bureaus compile consumer financial information and use it to calculate a credit score that represents how creditworthy you are. Credit scores use payment history, amounts owed, length of credit, applications for new credit and the different types of credit to determine a consumer's credit risk. The three national credit bureaus use the same factors but slightly different formulas, so your score may differ between credit bureaus.

Services

Credit bureaus must provide a free credit report to each consumer once per year upon request. Credit scores cost extra, but consumers or lenders can purchase a credit score report. Credit bureaus also provide services to help prevent fraud, to verify checks and collections, and to help businesses manage risk.

Errors

Credit bureaus make mistakes. Once alerted to an error on a credit report, they must investigate it within a month.

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How to Get Credit With a 625 Score

Obtaining credit with a 625 credit score takes effort, but it can be done. A 625 score is considered substandard by most traditional banks, who prefer to lend to those with a minimum score of 675. Even at that score, your interest rates can be higher than those with scores of 750 or above. Acquiring credit and using it responsibly is an essential step to rebuilding your score.

Instructions

1

Apply for credit with companies that advertise to individuals with lower credit scores. Search the Internet for "credit for bad credit" or visit an online credit card information site and select the "cards for those with bad credit" or similar option from the drop-down menu.

2

Contact companies that do not perform credit checks to issue you a line of credit. Some companies that offer "buy here, pay here" type of credit on in-store items such as furniture and vehicles do not run your credit report as long as you can provide them with proof of income and references.

3

Apply for a credit card with a department store. Many department store chains have more lenient requirements for issuing credit, enabling someone with a 625 score to be approved.

4

Sign up for a secured credit card issued through a bank. The issuing bank does not put collateral down on the card; instead, the cardholder funds the card using his own money. These types of cards act as traditional credit cards and can be subject to finance charges.

5

Apply for a home equity line of credit if you are a home owner. Some banks will issue a line of credit to individuals with a 625 score or lower. The appraised value of your home, amount remaining on your mortgage and your ability to pay back the loan can weigh more significantly than credit score when determining your eligibility for a home equity line of credit.

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How to Start My Credit Score

Not having a credit score can impact your ability to obtain a personal loan, auto loan and credit card. There are several ways to quickly establish credit and begin building a credit score. Starting your credit is only the first step. Being responsible and maintaining your credit is key is building a solid rating and acquiring the best rates on all types of financing.

Instructions

1

Visit a bank or credit union. Apply for a savings or checking account before applying for credit.

2

Find employment. Credit applications will request information about your income and employment history. Get a job, and maintain steady employment prior to requesting a new line of credit.

3

Save money. It's easier to obtain a secured credit card with no credit history. Save at least $500 for your security deposit.

4

Apply for utilities in your name. Get a telephone line or other household utility in your name to demonstrate a level of responsibility and help you obtain your first line of credit.

5

Submit a credit application. Apply for a secured credit card with your bank or credit union.

6

Know your due dates. Be aware of your due dates, and pay your credit card on time to raise your credit score and build a solid rating.

7

Exercise self-control. Avoid the temptation to shop uncontrollably. Use credit for emergencies, and pay off your debts to keep a high score.

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How to Delete Information From a Credit Report

Credit reports are one of the most important records about you. Your credit report is checked by companies that provide loans for cars, houses and other items. Your credit report is also checked sometimes when you apply for jobs or to get car insurance. It's important to make sure that your credit report is correct. You can't personally delete credit information but you can get mistakes removed.

Instructions

1

Get a copy of your credit report from all three agencies, Experian, Equifax and TransUnion. Check over the credit reports and look for any mistakes. If so, see if the problems exist on more than one report.

2

Do research on your own related to any mistaken accounts. Call the creditor and find out why they are reporting a problem. If it is a legitimate reason, it can take up to seven years to disappear.

3

Contact the credit agencies that have the information that you want to be removed. Tell them about the mistakes and ask them to look into it.

4

Send a certified return receipt letter to the credit agencies disputing the information. Include any proof you have that the information is false. The credit bureaus have a limited amount of time to research the matter. They aren't always very thorough and you may have to repeat this procedure.

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How Long After Paying Off a Loan Does it Appear on My Credit Report?

Paying off a loan is important to raising your credit score--balances owed account for 30 percent of your FICO credit score, according to the Fair Isaac Corp. Paying off a loan does not mean the payoff appears immediately on your credit report.

Time Frame

The major consumer credit reporting agencies--TransUnion, Experian and Equifax--do not update your credit report until the lender sends them information, according to Experian.

Considerations

Not all lenders report to the major credit rating agencies, according to Credit Factor. You should check your report from all three agencies to see whether the loan has been reported as paid off.

Tips

If you want to build your credit, then before taking out a loan, you should ask lenders which credit reporting agencies they report to.

Be patient. It can take as long as 90 days for a credit rating agency to update your report, according to Bills.com.

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How Does a Credit Report Show a Balance Transfer?

Credit card balance transfers often come with a zero percent interest teaser rate for up to 18 months, which could be enough to help you tackle your debt without paying interest. More importantly, a balance transfer does not affect your credit, and it appears on a credit report like debt refinancing. Credit card companies, however, might identify habitual offenders of the "balance transfer game." (

Identification

The credit agencies do not have a special code or designation for a balance transfer. A balance transfer makes one account balance smaller and another bigger. This looks the same as if the consumer were to pay off one account and make a purchase equivalent to the debt on the old card.

Does This Hurt Your Score?

Initiating a balance transfer has no effect on your score, because you just shift money around. What can hurt you is a hard inquiry when you transfer a balance to a new card. A single inquiry does no more than five points of damage -- negligible in the world of credit -- but six or more can make a much greater risk to future lenders.

Considerations

Credit card issuers can look at your credit report and notice a pattern of balances moving from one account to another. Issuers are well aware of the trick of hopping around zero percent teaser rates to avoid finance charges -- called "the balance transfer game." Do this too much, and companies may stop approving you cards with a teaser rate, or if too many people try this, it could move the credit industry to stop offering this perk all together.

Tip

Use balance transfers as a tool to pay down credit card debt, not a way to put off paying it. Avoid closing older credit card accounts after transferring a balance. Lenders and the credit bureaus like to see older accounts in good standing rather than several new accounts. Also, send in the minimum payment on the old account, because it can take up to four weeks to complete a balance transfer, so it is still possible to miss a payment during that time frame.

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Where Can I Get a Credit Report at No Cost?

Everyone is entitled to one free credit report every year from each of the credit reporting agencies. Only one source provides a credit report free of charge.

Three Agencies

There are three credit reporting agencies that compile credit reports: Equifax, Experian and TransUnion.

Online Request

Visit the Annual Credit Report website (see Resources) to request your credit report instantly at no charge.

Phone Request

Call the Annual Credit Report agency at (877) 322-8228 to request a free credit report.

Mail Request

Download the request form from the Annual Credit Report website and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Considerations

Other websites and services advertise free credit reports but require that you sign up for their monitoring service to receive the report.

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How to Obtain Personal and Business Credit Reports Fast

Each year, you are entitled to receive your credit report from nationwide credit reporting companies. These companies keep track of everything you or your business does; in terms of receiving, using and paying back credit. Checking these reports periodically will help you keep up on possible mistakes or to inform the credit reporting companies of missing information, which can help you secure either a personal or business loan should you apply for one in the future.

Instructions

1

Pick a company to get your personal or business credit report through. The three major nationwide companies are Experian, Equifax and TransUnion. While other companies exist, these three will get you your credit report the fastest, because they're nationwide.

2

Supply the company of your choice, or all three, with the information needed to get your credit report. Have it ready, and the process will go faster. You need to give your Social Security number, your date of birth, your full name and your current home or business address. For a business credit report, you may need your Employer ID Number.

3

Answer any questions you are asked as accurately as possible. Additional questions may be used to confirm your identity, such as how much you pay to lease your business office or how much your home loan is for.

4

Expect to receive your personal or business credit report you requested within 15 days of ordering it over the phone or online. While ordering it by mail is also an option, it will slow down the process. Answering the identifying questions accurately helps ensure that additional information won't be needed, which will slow down the request.

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