Does a Refund Anticipation Loan Affect Your Credit?

Tax preparation companies earned more than $600 million off of taxpayers in 2009 from fees for loan servicing, according to Consumer Federation of America and the National Consumer Law Center. Although the CFA and NCLC consider refund anticipation loans predatory, the loans have the benefit of being unlikely to affect your credit rating. Identification A refund anticipation loan, or RAL, does not affect your credit because it is not an actual loan, but an advance on your refund. The tax preparation firm does not care whether you are a good...

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Will Not Using Credit Affect Scores?

In an ironic twist of fate, not having any debt is usually worse for your credit score than carrying some existing balances. Once you gain a line of credit, however, the FICO scoring system will not ding you for failing to utilize credit, except some factors in the equation may hurt if you do not use an account every so often. Identification The credit bureaus cannot give you a credit score until you establish a sufficient amount of credit history, according to the Privacy Rights Clearinghouse. Also, the accounts you own must report to...

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Is Checking Your Credit Score Bad?

Nearly all people of legal age who have taken out a loan or a line of credit are issued a credit score by credit reporting companies. This score is a measurement of the likelihood that the person will back a loan on time and in full. According to U.S. law, a person is legal entitled to check his credit score once a year free of charge. Some companies, particularly lenders, may also check your score in certain instances, such as when you apply for loans. Some types of credit inquiries car harm your credit score. Types According to the financial...

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Can an Authorized User Affect a Credit Score?

An authorized user is a person who has a credit card that draws from the primary cardholder's credit line. The primary cardholder is still fully responsible for the payments on the account. Although the act of adding an authorized user does not affect the cardholder's credit score, the authorized user's charges can. Utilization Rate The main way in which an authorized user can affect the cardholder's credit score is through the debt-to-limit ratio or utilization rate. When the authorized user spends on the credit card, it brings the debt...

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How Does Credit Accumulate?

Introduction Credit is one of the most important financial aspects of your life. It affects whether you can buy a new car or house or qualify for a loan, and the type of job you are able to obtain. Here's how exactly can you accumulate not only credit, but good credit. Credit Cards Credit cards are one of the most common and popular ways to accumulate credit. A credit card can come from a variety of lenders and constitutes a line of...

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Does Opting-Out Improve My Credit Score?

Adults in the United States commonly receive dozens of credit card offers in the mail every year, most of which end up in the trash. People who would prefer to not get these can opt out of receiving pre-screened credit card offers. This action has no direct effect on the individual's credit score. Direct Effects Opting out of receiving pre-screened credit offers does not impact your credit score at all. Although the companies sending these offers pull your credit report and appear in the "inquiries" section of the report, these are categorized...

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Change in How Credit Scores Are Calculated

The FICO score has long been the industry standard for determining the creditworthiness of potential borrowers. The VantageScore was developed from 2003 to 2005 by the three credit bureaus, Experian, Equifax and TransUnion, before being released to lenders. The FICO score is still the primary score that is used by lenders to determine whether you will receive credit. The VantageScore is still being used on an experimental basis to determine whether it should replace the FICO score as the industry standard. Score Components The FICO score...

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What is the Meaning of Credit Score Comments?

Your credit score is meant to be a numerical representation of your overall credit worthiness and credit history. For this reason, there are no official comments that go with your credit score. However, there are some comments on your credit report that can significantly influence your credit score. Credit Report Comments While credit score reports can come in different types of formats, your actual credit report has a set format it must follow. The report lists all of your accounts and the terms of each account, as well as your past payment...

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Tips to Increase a Credit Score

Your FICO score affects the interest rate you'll receive on auto loans and mortgage loans. If you have a bad score, you may not qualify for such loans. Fortunately, there are ways to reverse bad credit and improve your credit score. The key is recognizing the value of maintaining a high score and making smart credit decisions. Check Your Credit Report Annually Credit report errors are common and they can affect anyone. Creditors may inadvertently...

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Why Can't I Get My Free Credit Report Online?

As of 2011, the Fair Credit Reporting Act gives consumers free access to their credit reports once a year, according to the Federal Trade Commission. Requests can be made through AnnualCreditReport.com. No other website is authorized by the FTC to provide free yearly credit reports. Any other website that boasts "free" reports is likely snagging you into a free trial period that ends in your credit card being charged monthly membership dues. ...

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Reasons Why You Would Get Turned Down for Instant Credit

Instant credit is not really instantaneous, although the process generally takes just a few minutes. You can apply for an instant credit card or other account online or at a retail store. The lender checks your credit report and decides whether to open an account immediately, investigate further or deny your application. Many factors influence your creditworthiness, according to credit score company Fair Isaac Corporation, which created the FICO score, so you could be turned down for a variety of reasons. Delinquent Payments Lenders do...

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Does Your FICO Score Change With Your Credit Score?

A FICO score is your credit score. FICO is the credit score used most by lenders when assessing your credit risk, according to MyFICO. The numerical score runs from a low of 300 up to a high of 850, and the higher the score, the better your credit. It's wise to understand how a FICO score is generated, and what causes a change in your FICO credit score. Identification Your FICO score contains five key elements, according to MyFICO. How much debt you have is 30 percent of your score. Thirty-five percent reflects how well you pay your debts....

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How to Write a Letter to Request a Copy of Your Credit Report

A credit report is a record of your credit history. It tells potential creditors, landlords and sometimes employers how you pay your debt obligations. There are three major credit bureaus --- Equifax, Experian and TransUnion --- that handle the majority of credit-reporting activities. You can request a copy of your report by mail, but you must provide certain information in your request letter so the credit bureau can positively identify you as the person named on the report. Instructions 1 Write the date at the top-left side of the paper....

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What Is the Ideal Credit Score?

The ideal credit score is one that allows you to access the most competitive interest rates on financing, whether it's a mortgage, a car note or another type of loan. This number can be something of a moving target, as lenders tighten or loosen their underwriting guidelines, but you should do all you can to improve your credit in advance of seeking a loan. Possible Scores The three major credit agencies, Experian, TransUnion and Equifax, compute credit scores using slightly different models. The score generated by the Fair Isaac Corporation,...

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Credit Ratings & What They Mean

A person who has taken out some form of credit, be it a loan or certain kinds of bills, even way in the past, will have a credit report. This credit report is a compendium of information related to the person's credit history. Credit reporting bureaus keep this information as a way of formulating a person's credit score, which is used by lenders to measure a person's creditworthiness. Credit Reports A credit report is formed from both public and private information. Creditors report information about current debts that individuals have...

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How Can I Remove Negative Accounts From My Credit Report?

A negative mark can appear on your credit report for seven years. Any negative information found on your credit report can lower your credit score, which could hurt your chances of getting approved for new credit in the future. You cannot remove accounts that you actually owe, but you can remove accounts that do not belong to you. The credit bureaus must investigate and remove any negative reports that do not belong to you. Instructions 1 Order a copy of your credit report from Equifax, TransUnion and Experian. By law, you can get a free...

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What Is the Best Identity Theft Protection?

Identity theft occurs when someone finds your personal information such as your Social Security number and uses it for criminal purposes such as credit fraud, according to the Federal Trade Commission website. Consumers need to protect themselves from identity theft using proven protection methods. Taking the time to protect yourself from identity theft reduces the chances of having your financial world ruined. Shredding One of the ways that criminals get your personal information is through the bills you throw away in your garbage, according...

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Consumer Credit Rating Rules

The Fair Isaac Corporation produces FICO scores, which are the standard for determining the creditworthiness of potential borrowers. These credit scores are based on information found in the individual credit reports. The FICO score is based on five factors: payment history, the amount of money you owe, the length of your credit history, your recent applications for new credit and the types of credit you use. Payment History Your payment history accounts for about 35 percent of your credit rating. Your payment history looks at how often...

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Is Your Credit Score Negatively Affected When Closing out Accounts on a Credit Report?

The average American consumer had 3.5 open credit cards as of 2008, according to the 2010 "Survey of Consumer Payment Choice," conducted by the Federal Reserve Bank of Boston. This is often in addition to other accounts like car financing, miscellaneous loans and mortgages. You can close credit cards and other accounts if you wish to reduce your available credit, but this affects your credit score. Description You have three credit reports, which are individually compiled by the Experian, Equifax and TransUnion credit bureaus. Your files...

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What Is a Hawk on a Credit Report?

A hawk alert is a fraud detection tool used by the credit reporting agencies. When a company orders a credit report on someone, a search is done across all the credit reporting databases for fraudulent or incorrect information. When material discrepancies are found, they are printed out as a hawk alert. Improper Address Hawk alerts can be generated because the address or telephone number supplied on a credit application belongs to a business...

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Damaged Credit Rating

A credit score is a number used by lenders to determine a borrower's ability to repay money. Credit scores are determined by evaluation of information provided to credit agencies primarily by lenders. A bad credit score can make it extremely difficult and expensive to receive a loan, if not entirely impossible in some cases. Once a credit score is damaged, however, it can be repaired. Credit Scores Credit scores are numbers provided by a...

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Five Components of a Good Credit Score

Your credit score is a three-digit number that represents your creditworthiness to lenders. When you apply for new credit, lenders determine whether or not to loan you money and at what rate based on your credit score. The higher your score, the more likely you are to be approved for new credit and the better your interest rate will be. If you credit needs improvement, learn what five components make up a good credit score. Payment History ...

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Credit Reporting of Credit Limits

One of the factors that determines your overall credit score is your credit limit. Your credit limit is the maximum amount you are able to borrow for a particular revolving credit account. All lending institutions will report your credit limit to the credit reporting agencies that compile your credit score. Amounts Owed According to FICO (the agency that calculates your credit score), "amounts owed" accounts for 30 percent of your FICO score. This includes the number of accounts with balances, types of accounts, the amount owing on accounts,...

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Definition of a FICO Score

Whenever you apply for a mortgage, car loan or other form of credit, the lender checks your credit rating. The most important item the lender looks at is your credit score, or FICO score. This is a number that summarizes how much risk you represent as a creditor, based on your credit history. The acronym FICO stands for Fair, Isaac, & Co., the company that developed the credit score system. FICO is used by the three major credit agencies to calculate your credit score, although they each use a trade name for their FICO score. Equifax calls...

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Does Joint Credit Help Your Credit Score?

A joint credit account can become a useful tool to boost your credit rating, but often turns into a huge liability that damages your credit. The danger with opening a joint credit account is that you may have to depend on someone to handle the account responsibly. Unless you have no other way to obtain credit, you usually do better opening an individual account. Identification Opening a joint credit account can help your credit score if you and the other borrower always pay the monthly bill on time. Also, the account provider must report...

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How to Increase Your Credit Score and Improve Your Life

Buying a nicer home and financing a reliable car requires a good credit score. According to Experian.com, a good credit score is 700 or higher. People in this category tend to acquire easy loan approvals and the best interest rates on financing. But what if you have a lower score? Credit scores aren't written in permanent ink, and there are practical ways to improve your score and your life. Instructions 1 Keep small balances on revolving accounts. Credit card usage impacts credit scoring. Pay down your balances and control spending to avoid...

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Definition of Credit Information Companies

Legally, credit information companies or credit reporting agencies are charged with the responsibility of maintaining and issuing accurate bill-paying histories on adults, according to the Federal Trade Commission. The Fair Credit Reporting Act governs the major credit information companies and also protects citizen rights in the event of inaccurate credit reporting. Identification The major credit information companies in the U.S. are Equifax, Experian and TransUnion, according to the Federal Trade Commission. Each company must issue consumers...

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Will Paying 3 Year Old Debts Increase Your Credit Score?

Having old, unpaid debt can bring penalties, fees and collection efforts. The unpaid debt also brings a negative blow to your credit score. The worst damage to your score occurs in the first 24 months following the negative entry. Ironically, paying three-year-old debt may hurt your credit score rather than help it. Statute of Limitations on Debt A statute of limitation limits the time a creditor can legally take you to court to collect on...

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Is There a Way to Check Your Credit Report for Free?

Your credit report contains information about your lines of credit and your history of payments on those lines. It also contains information about any outstanding debts that you have not settled, such as phone bills. Banks use your credit report to decide whether to give you a loan for a home or a car, and some employers use a credit report to determine an applicant's eligibility for a job opening. Get a free copy of your credit report to make sure...

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How to Refinance With Less Than Perfect Credit

You can refinance an auto or home loan through a new or existing lender, which essentially means you agree to pay off an existing loan with money from a new loan. The process is moderately easy, but requires a lot of research and legwork. A less than perfect credit score can decrease your chances of receiving a low interest rate -- which is typically reserved for consumers with a higher credit rating; however, it's possible to negotiate a competitive and attractive interest rate for your financial situation. Instructions 1 Purchase a copy...

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Does Getting Prequalified Hurt Your Credit?

You can cause significant damage to your credit rating due to credit preapproval, even though the credit bureaus tell consumers that the inquiry for a preapproved credit application does no damage to your credit score. Although the damage from prequalification rarely catches your eye, it can cause significant damage in certain cases. Clarification The meaning of "prequalified" depends on the type of loan. Credit card preapproval has no impact on your credit rating, because you did not request an account. If you accept a preapproved credit...

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How Long Do Closed Accounts Stay on Credit Reports?

Your credit reports list a variety of personal and financial information, including both open and closed accounts. If this information is positive, it helps to boost your credit score. If it is negative, it brings your score down. This information stays on your credit reports for a certain length of time, after which it should drop off your report. If it does not, and if it is negative information, you can challenge it. Significance Closed...

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What Happens to Your Credit When Going Bankrupt?

Bankruptcy is a court action that provides protection from creditors by either discharging debts or dictating a repayment plan. Bankruptcy Abuse Prevention and Consumer Protection Act statistics from the United States Courts show that almost 1.4 million people filed for bankruptcy in 2009 to relieve themselves of consumer debts. This action may relieve repayment pressure, but it also devastates the filer's credit reports and score. During Bankruptcy The bankruptcy process stops creditors and collection agencies from harassing you for repayment...

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How Can I Improve My Credit Without a Job?

Credit scores affect your ability to secure housing and make purchases. If you're looking for employment, a poor credit history may affect your ability to land a job. Improving credit without a job is about maximizing your existing resources. Simple behavior changes can boost your credit rating over time. Instructions 1 Make monthly payments on time. Try setting up automatic monthly payments to prevent late payments. You can do this through...

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How Long Does It Take for Issues to Hit Your Credit Reports?

A negative item, such as a late payment, does not show up on your credit report immediately, but it will only be a matter of time before your credit report displays a red mark. How long it takes an issue to reflect on your creditworthiness depends on the diligence of your creditor. Identification Credit reporting agencies depend on individual creditors to report the status of your payment history and accounts, according to Credit Factor. Typically, once a creditor updates your account it shows up on the first of the following month. For...

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What Is a Prime Credit Score?

Just a few points can come between a lender considering you a good risk and a terrible or "sub-prime" borrower. While nothing is ever set in stone in the lending industry, lenders have come to general consensus over time on what constitutes a prime borrower. Holding a prime score, however, does not guarantee you the best rate on a loan, because the prime score range contains many levels. Identification The Fair Isaac credit scoring system ranges from 300 to 850. In general, scores between 620 and 850 fall into the category of "prime," according...

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If You Dispute Something Will It Figure Into Your Credit Score?

Credit report disputes remove information from your credit bureau files if Experian, Equifax and TransUnion rule that your complaint is true. Your credit score comes from the data in your bureau files, so successful disputes affect the number. Your score does not change until the bureaus' investigations are complete and they decide in your favor. Disputable Information You may dispute any mistaken information in your credit reports, from wrong addresses and phone numbers to falsely reported payment delinquencies, but your credit score is...

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How to Dispute a Credit Card Interest Rate Increase

Credit card companies are known to increase interest rates regardless of your payment history, credit score or purchases. Consumers have long felt these practices are unfair and soon the law will change to reflect that. There are two types of interest rates on credit cards. A fixed rate means your interest rate is set for a stated period of time. A variable rate card will fluctuate with the prime rate. Credit card rates will almost certainly rise in the future. You have the option to ask for a lower rate or opt out of a proposed rate increase....

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How to Build Credit Online

When you are ready to buy a car or real estate, you may need to take out a loan to do so. The interest rate that you get when you are approved for that loan is directly related to your credit score. Credit scores are also used for things such as insurance rates and even in hiring decisions. Fortunately, you can work on maintaining a good credit score by building your credit. You can even focus on building your credit online from the comfort of home. Instructions 1 Apply online for a credit card. Do not apply for multiple credit cards because...

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