Do Credit Bureaus Track What I Buy?

Savvy borrowers know that the three major agencies track their financial history, such as whether they pay their credit cards on time every month. You may think that the credit bureaus can also see what purchases you make and whether you buy "frivolous" things, but the credit bureaus do not care what you buy. In some cases, however, they do know your purchase history.

Identification

The major bureaus -- Equifax, Experian and TransUnion -- do not itemize your purchases on a credit report. Credit reporting agencies are more concerned with whether you repay your debts. The difference between defaulting on a mortgage and cell phone is immaterial to the credit scoring formulas employed by a credit bureau.

Considerations

The FICO formula used by the major credit bureaus breaks down loans into their sector, such as retail card, student loan and mortgage. Thus, the credit bureaus can track where some of your purchases go to, but not necessarily specifics. A credit report, for example, will not dissect how much you pay in tuition and other expenses after taking out a student loan.

Alternative Credit Bureaus

Alternative credit bureaus may go more in depth into your spending habits, but only if you choose this option. When consumers cannot obtain a traditional, they sometimes go to an alternative agency, which requires consumers to self-report debt and then the agency verifies the payment. In this situation, the agency will know about any creditable accounts, such as cell phones and personal loans.

Tip

Tracking spending habits can improve your credit score by eliminating unnecessary debts, because the major bureaus factor in your debt load and percent of credit available. Modern phones with an operating system may have an application available that allows you to enter in your purchases and break your budget down by category. If you have a credit card with a major issuer, it probably tracks your purchases by category, such as groceries and entertainment.

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How to Obtain a Credit Score By Phone

Credit scores are important for buying a house, buying a car, obtaining credit cards, renting an apartment or even getting a job. A low credit score gives the impression of poor financial decisions while a high credit score gives the impression of good financial decision-making skills and abilities. Credit scores can be obtained at any time. Common ways of obtaining credit scores are over the Internet at credit report websites, through the bank or over the phone.

Instructions

1

Find out which company credit score is necessary. There are three credit scoring companies: Equifax, Experian and TransUnion. Depending on the reason for the credit score, the company might change. For example, a bank looking at a credit score for a home loan might look at the Experian score while a car financing loan might look at Equifax instead.

2

Call the company phone number. Equifax is 1-800-685-1111. Experian is 1-866-200-6020. TransUnion is 1-800-888-4213.

3

Speak to a representative and request a credit score. The representative will need a full name for identification and a Social Security number. She might ask for other identification information as well to verify an identity. She should give the score over the phone when requested.

4

Pay the fees. The price for a credit score and report can range from $14.95 to $34.95 depending on the company.

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How Short Sales Affect Your Credit for a Couple of Years

When your mortgage debt exceeds the value of your property, your lender may allow you to sell the house for less than you owe. Lenders refer to these transactions as short sales. Although your lender approves the transaction, you essentially failed to honor your original loan agreement and therefore a short sale can have a damaging impact on your credit score for a number of years.

Closed Accounts

When you take out your mortgage, your lender informs the credit bureaus about the size of the loan and the monthly payments you are required to make. When you enter into a short sale transaction, your lender reports the closing transaction to the credit bureaus. The credit bureaus take note of the difference between the balance owed and the final payment on the debt. Details of the short sale remain on your credit report for seven years, and other creditors can see that you did not repay your mortgage in full simply by reviewing your credit report.

Late Payments

Lenders are under no obligation to enter into short sale agreements and only allow people to arrange short sales as a last-resort alternative to foreclosure. People who have fallen behind on their mortgage payments often end up entering into short sale agreements. Credit bureaus maintain records of 30-day-late payments and, like short sales, late payments remain on your credit report for seven years. Therefore, late payments may have already caused your credit score to drop long before you actually complete a short sale.

Credit Score

The credit bureaus assign you a credit score that reflects your overall credit management, and this score can rise or fall regularly as the credit bureaus receive updated information from your creditors. However, credit bureaus focus more on your recent credit activity than your past activity. With every year that passes a short sale has less of an impact on your credit score. The more positive account history you have, the less harm a short sale can do to you in the long term.

Considerations

Although a short sale has a negative impact on your credit report for at least a few years, it does not cause as much harm as a foreclosure. You can obtain a new mortgage within a few years of being involved in a short sale and you can obtain a new Federal Housing Administration-backed loan without any time constraints if you never fell behind on your loan payments before your short sale. Most lenders require you to wait for between five and seven years before obtaining a loan after you go into foreclosure. Additionally, foreclosures take longer to settle and therefore you have to wait longer before you can begin to repair your credit score.

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What Information Do Apartments See When Checking Credit?

Part of the process of getting a rental property typically involves getting a credit check. When a landlord runs your credit, he can gain valuable information about your past and whether you will be a good tenant or not. When this type of credit check is run, the landlord can find out about your other accounts and payment history.

Running a Credit Check

When the landlord wants to run a credit check on you, he has to get permission first. You will need to sign a document that states you give the landlord permission to run a credit check. Once you have signed the document, the landlord can then run a credit check. This is a "hard" inquiry, which means you are essentially inquiring about credit. This means that it can affect your credit score, so you should not allow too many of these checks as they can lower your credit score.

Judgments

When a landlord runs your credit report, he can see if you have any judgments against you. For example, if you have filed for bankruptcy in the past, it will show up on your credit report if it happened in the last 10 years. If you have defaulted on any credit cards or any other type of debt, it can also show up on the credit report. If you have several judgments, this could reflect negatively upon you in the eyes of the landlord.

Evictions

In your credit report, the landlord can also find out if you have any evictions on your record. If you have been evicted from a previous apartment or rental unit, your previous landlord could have put this in your credit report. If you have been evicted recently, this will make it difficult to get an apartment. Most landlords will not want to open the doors to you if you did not pay your rent with the last landlord.

Credit Accounts

On your credit report, the landlord can also see what types of credit accounts you have open. For example, your report will have information about the various credit cards, loans and store accounts that you have set up. The landlord can see how much debt you have in relation to the available credit balances. The landlord can also see your payment history with each account to make sure that you pay your bills on time. This could be relevant when making a decision on a rental property.

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How Do I Quickly Rebuild a Credit Score?

More than 30 million Americans have credit scores in the low 600s or under. If you find yourself in this situation, you will pay more for any kind of credit. Whether your bad score results from unemployment, illness or careless management, you can improve it if your finances have stabilized and you manage them responsibly. Better yet, several fast techniques to repair your credit cost nothing.

Instructions

1

Get your credit reports and scores. Go to AnnualCreditReport.com or contact TransUnion, Experian and Equifax directly. You need to first assess the the state of your credit in order to repair it.

2

Dispute errors in your credit reports and have them corrected. Contact the major credit bureaus to ask them to correct incorrect information on late payments, low credit limits or other significant errors, as MSN Money author Liz Pulliam Weston suggests. Speed up the process by contacting the credit bureaus online.

3

Stop charging, and pay down the balances on your credit cards to 20 percent or less of the total credit limit on your cards. Kimberly Langford of Kiplinger's Personal Finance states that approximately a third of your credit score depends on the amount of your total credit card limits that you use. She says that a high used-to-available credit ratio will lower your score even if you never make a late payment.

4

Increase the credit you have available on your existing cards. This also will improve your ratio of credit used to credit available without costing you money. If you have a good payment record, call each credit card company's customer service number and ask them to increase your credit limit. Do not increase your borrowing, however, or your ratio will not improve.

5

Use your longest-standing account or accounts every few months. This will help your credit score because the bureaus value a long credit history. Keeping your oldest accounts active will give them more weight in your score.

6

Avoid mistakes that can counteract your positive actions, as Liz Pulliam Weston warns. Don't make any late payments; these will hamper your attempts to raise your score. Don't transfer balances if they end up on a low-limit card; keep small amounts spread around several cards. Do not apply for new credit if you already have a number of accounts.

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Improving Credit by Paying Old Balances

Old balances on your credit reports are probably accounts that are no longer active. Chances are you stopped paying on the accounts at some point and they were closed by the original creditor, who then sold them to a debt collector. The accounts are now considered to be collection accounts and will cause a drag on your credit scores. In some instances the dormant account is not sold to a debt collector but is kept in-house with the original creditor's collection department.

Instructions

1

Get a copy of your credit report. You can get a copy for free at the website AnnualCreditReport.com. Or call 877-322-8228. The nationwide reporting bureaus established the site to offer free reports as required by federal law. You can order up to three reports every 12 months.

2

Review your reports to find the delinquent accounts with old balances. The name and contact information for the creditor or debt collection company will be listed with the account.

3

Call the creditor or debt collector with an offer to pay. Offer less than the full amount owed through a process call debt settlement. According to The New York Times, debt collectors will sometimes accept as little as 20 percent of the balance to resolve the debt. Settlement for about half is more common. During your negotiations ask that the collection activity be erased from your credit report. It is now likely being listed as a "Collection" account, and once you pay, that will be changed to "Paid Collection." Both are negative entries that could impact your ability to get new credit. Asking for the entry to removed altogether will improve your credit scores. Also any reduction in your debt load--including paying off old balances--can improve your credit. Note that debt collectors can legally remove the negative information such as collection notations but are not required to do so.

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Is it Safe to Get a Credit Score From FICO?

A consumer's FICO score provides a rating for the consumer based off the consumer's credit report. Many creditors use the FICO credit score when determining whether to accept a loan or credit application and what rates to offer the consumer. Consumers should check their own credit scores on a regular basis, especially before applying for large credit or loan accounts.

Ordering a FICO Score

Consumers can order a copy of their credit score from the Experian, TransUnion or Equifax websites or from MyFico.com. Consumers can also request their FICO scores by mail or over the phone. While consumers can request a free copy of their credit reports in some instances, there is typically a small fee to purchase a copy of a credit score. A consumer can order a copy of his FICO scores as many times a year as he wishes.

Security

When a consumer orders his credit score online -- from MyFICO.com, for example -- he will need to provide several pieces of sensitive data, such as his full name, address, driver's license number and Social Security number. In order to reduce the possibility of identity theft, credit scoring websites use encryption technology, which hides the private information from possible hackers and identity thieves. The website will also ask the consumer several verification questions to prove his identity and further reduce the threat risk.

Effect on Credit Score

Typically, when a creditor pulls a consumer's credit report, the credit bureau logs this information in the consumer's credit file. This is known as an inquiry. According to myFICO.com, 10 percent of a consumer's credit score comes from the number of inquiries he has on his credit report. Several inquiries over a short span of time can lower the consumer's credit score. However, when a consumer orders a copy of his own credit score or report, it has no effect on his score. This is known as a soft-pull inquiry, and it will not appear on the consumer's credit report.

Tips

As a credit score only shows a ranking for the consumer, he may want to order his credit report as well to see detailed information about his financial history. Every U.S. consumer can receive a free copy of his credit reports from Equifax, TransUnion and Experian once a year through AnnualCreditReport.com. Consumers can also purchase their credit reports through the credit bureaus directly for a small fee.

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