Personal Credit Rating System Problems

As credit reports and credit scores become more embedded in the social consciousness of consumers, the personal credit rating system is more important than ever. We've never known more about the formulas that determine whether we'll get approved for credit and what kind of rates we'll get, which is both a blessing and a curse. While we can now build our credit around the metrics used by the banks, we can also see the flaws inherent in the system. Credit Rating System Today's most prominent personal credit rating system, the FICO score,...

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What If There Is An Error In Your Credit Report?

Under the Fair Credit Reporting Act, FCRA, you have rights as a consumer that entitle you to accurate reporting of your credit history. Both the credit reporting agency and the entity providing information about you are responsible for the accuracy of the information on your report. The Federal Trade Commission, or FTC, is the federal agency tasked with enforcing the FCRA, and can provide some assistance in correcting errors on your credit report....

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How to Dispute the Validity of a Credit Report

Your credit history has a direct effect on your financial health. Having negative items on your credit report, such as late payments, charge-offs and collection accounts, can bring down your credit score and make it difficult for you to qualify for a new credit card or loan. Even worse, the credit bureaus who keep a record of your credit history can make mistakes, giving you a negative rating you do not deserve. By law, you have the right to review your credit report and dispute inaccurate information. Instructions How to Dispute a Credit Report...

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How Can I Get a Credit Report on a Person Who Is Not My Relative?

Creditors use credit reports to help determine if someone is a good candidate for a loan or other form of credit. Every person who has ever used credit has a credit report, and while you can look at your own report for free once a year, you cannot look at someone else's report without permission. You cannot even view your spouse's credit report unless you have legal permission, and looking at a non-family member's report is no different. Instructions 1 Ask the person for a copy. The easiest way to look at someone else's credit report is...

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Free Credit Score Online & No Credit Card Required

A credit score is a three-digit number that represents your creditworthiness based on information in you credit report. While it is impossible to calculate your credit score yourself, you can manage whether your credit score increases or decreases each month. You can obtain a free copy of your credit report once a year through AnnualCreditReport.com to monitor your credit-related axctivity, and you can order your credit score for a fee or, in some instances, for free. Trial Memberships Sometimes you can obtain a credit score free as part...

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How Much Does Your FICO Score Change Once a Charge Off Has Been Taken of Your Credit Report?

Charge-offs can do serious damage to your credit score, so getting them removed is an important step in improving your credit. Once removed, you should see an improvement in your score, though the extent of the improvement depends on other factors, including the age of the debt. Credit Scores A credit score is a number that represents your financial history, particularly your use of credit. A higher credit score indicates a history of responsibly using of credit. There are several different formulas used to develop credit scores, though...

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Which Credit Score Do Lenders Use?

A credit score can determine whether you get a loan and affect other aspects of your life, such as getting a job, but not all credit scores are the same. Most lenders use the same formula to calculate your credit score, but they rely on information gathered by a third party. However, there are several alternative scores lenders can consult. Identification As of 2010, most lenders use a credit scoring formula developed by the Fair Isaac Corp., according to Kiplinger. The FICO score is so common among lenders that credit scores are often...

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How to Dispute Your Credit Report & Win

If you find mistakes in your credit report, it's up to you to initiate the process of getting them fixed. While the process can be lengthy and tedious, it is possible to successfully dispute inaccurate information in your credit report. Instructions Disputing Erroneous Information on a Credit Report 1 Obtain copies of your credit report from all three major credit bureaus. Each consumer is entitled to one free copy of her credit report every 12 months from each of the three major credit reporting bureaus. It is a good idea to obtain all...

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Does Your Credit Score Get Hit When Your Credit Is Pulled?

When you apply for credit or a loan, the lender must look at your credit report to check the strength of your credit, a process called an inquiry. You naturally want to shop around to get the best deals but may worry that if too many creditors are looking at your score, it could lower the score. While this is true, it's probably not something you have to worry about. Why You Should Worry Suddenly acquiring a lot more credit seems like a risky behavior to the credit companies, and they can lower your credit score as a result. Though it may...

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What Affects a Middle Credit Score

If you've got a mid-range credit score, chances are you've managed your credit with responsibility but hit a few snags along the way. Getting your credit score out of the middle range and into the excellent range requires an understanding of what factors can increase or drag down your score. With some time and dedication to achieving a better score, you can attain a score that will ensure you get the best terms on credit cards and loans. Definition The three credit bureaus -- Equifax, Experian and TransUnion -- use their own credit scoring...

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Years to Repair Credit History

A poor credit rating can halt your attempts at getting the mortgage you need or the loan for buying that new car. Lenders are cautious about giving money to those with a poor financial track record. Depending upon what's on your credit report, it can take a short amount of time or more than a decade to repair credit history. Less than One Year When your credit history has suffered a number of setbacks, take a few proactive steps to get your...

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How to Boost Your Credit Score Legally

Your credit score follows you everywhere. Whether you want to buy a house, a car or even open a bank account, your credit score will be a major factor in the process. If your credit score is less than stellar, there are ways to fix it. Scam artists promise that they have secret ways to fix your credit, but most of what they promise is either illegal or a lie. Instead, you can fix your score yourself the correct, legal way. Instructions 1 Gather...

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Does an Increased Credit Limit Hurt a Credit Score?

Your credit score, which ranges from 300 to 850, is an important financial number. It determines whether a credit application will be accepted and, if you are approved and lent money, how much interest you will pay. There are borrowing behaviors that can improve your credit, and some behaviors that can hurt your credit. A change in your credit limit, which is the amount of available credit on an account, is one factor that can impact your credit score. Increased Credit Limit Generally, an increased credit limit will not adversely affect...

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What Is an Average FICO Score?

A person's FICO score, also known as a credit score, holds a lot of weight with lenders and creditors. Knowing your score, and how it compares to the national average FICO score, will help you know how banks and other creditors decide to approve your loan and at what interest rate. (Figures below are from November 2009.) FICO Scores FICO stands for Fair Isaac and Co. It developed the software most often used by credit reporting companies...

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Does Co-Signing on a Loan Affect My Credit Score?

Lenders often require people with poor credit or no credit to get someone to cosign for a loan. However, before you sign, you need to carefully consider how cosigning could lower your credit score. Outstanding Debt Your credit score suffers when you cosign a loan because the formula considers you to be responsible for the debt. Your outstanding debts account for 30 percent of your credit score. Payment History Since you are legally...

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How to Build Credit When You Turn 18

Building your credit will make lending institutions more likely to provide you with loans. Additionally, the higher a credit score, the more likely an individual will be offered better interest rates. A person who turns 18 will be able to start building credit and improve his credit score by doing several things over time. There are some things that will reflect negatively on a credit score, such as being late on payments, but there are also some...

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How to Fix Credit Scores After Chapter 13 Bankruptcy

Filing a Chapter 13 bankruptcy reduces your credit score, and because you need help managing your outstanding debts, future lenders reviewing your credit applications may feel hesitant to extend a line of credit. While a Chapter 13 bankruptcy hurts your overall credit rating, bureaus delete this negative mark from your credit report after seven years. In the interim, it's best to take steps to improve your unfavorable credit rating. Instructions 1 Apply for credit immediately after your bankruptcy. Fixing your credit score after a bankruptcy...

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What Causes a Bad Credit Rating?

Your credit score provides lenders with a snapshot of how likely you are to default on a loan. Most lenders use the FICO credit score, which credit bureaus calculate using an algorithm developed by the Fair Isaac Corporation. FICO scores range from 300 to 850, with higher scores meaning a lower chance of default. Credit bureaus determine your score by compiling information about how you've managed your debt in the past. Having a higher credit score...

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I Want to Check My Credit Report

Your credit report is a collection of data from all of your credit accounts, which includes auto loans, mortgages, student loans, credit cards and other types of consumer credit. Check your credit report to see all of the data that goes into calculating your credit score and determining whether you are approved for credit. Get Credit Reports The main credit bureaus that keep a record of your credit history are Experian, TransUnion and Equifax. Although you can order a credit report at any time from the credit bureau that maintains the report,...

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Can a Bad Credit Score Prevent Me From Renting an Apartment?

Consumers sometimes assume that if they do not use credit, they do not need to worry about their credit rating, but a credit rating can affect whether you get an apartment. Fortunately, you probably do not need anything other than average credit to rent an apartment. You probably can rent one apartment with bad credit, but you have far fewer options than someone with good credit. Identification Bad credit can prevent you from renting an apartment, because landlords often perform a credit check on rental applicants. Seriously negative items,...

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Uses of a Credit Score

A person's credit score is provided by credit reporting companies, financial services companies that collect information about borrowers and lenders. This number, compiled using a formula developed by the Fair Isaac Corporation, is between 300 and 850. The reports are composed of information about the individual's credit history, such as debts he has incurred, loans he has taken out and how he has repaid each of these obligations. These credit scores may be accessed and used by a number of different companies. Legitimate Business Reason ...

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How to Dispute Information for Transunion

Your credit report is an important factor in multiple facets of life, especially when you apply for a loan through a bank. Your credit score gives businesses an idea of how likely you are to repay the loan and under what terms they will lend the money. If you have a negative mark on your credit report, it can cause you to be denied for a loan or perhaps have a higher interest rate than necessary. If there is a negative mark you believe should not be on your Transunion report, you can dispute it. Instructions Online 1 Go to the TransUnion...

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Does Lowering My Interest Rate Affect My Credit Score?

Credit cards have variable balances and payment requirements each month, depending on how much you spend and pay. Loans are for a fixed amount, with set monthly payments and a predetermined repayment time. Both of these account types impose interest charges, which can sometimes be lowered. The reduction can then have ripple effects on your credit score. Direct Effects Many financial factors affect your credit score, including all credit-related account balances and payments. Scorers like FICO plug data from your credit reports into their...

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