Remove Inaccuracies To Make Your Credit Report Blemish-Free – Boost Your Score

Posted on March 28, 2012 by admin

Repair Your CreditToday’s lending industry is a credit-based one and blotches on your credit report can cost you dearly. If you’ve gone through the hassles of bankruptcy or a foreclosure and have trashed your credit score, you need not fret as there multiple ways to become creditworthy again. You just need to get started and also remember that it is not going to happen overnight. The credit score of the borrowers often affect the lending decisions as apartment rates, insurance premium rates and even employment decisions hinge on your credit rating. The better your score is, the better will be the rates that you’ll be offered on the loans. With the increasing importance of credit scores, the consumers are taking more notice and are opting for credit repair. If you too are desperately trying to know the ways in which you can repair your credit, read on.

  • Order copies of your credit report: The top 3 credit bureaus, Equifax, TransUnion and Experian are always ranking you in accordance with your credit score. The first job that you have to do is to order a free copy of your credit report from any of the three credit reporting agencies. It is likely that the different credit reporting agencies will speak differently about you and thus it is better to take out a credit report from all the three credit bureaus so that you know what steps to take.
  • Scrutinize your credit reports carefully: According to the recent reports, every consumer has an error in at least 1 report taken out from any of the credit reporting agency. Review carefully for all the erroneous information that is dropping down the score so that you can track them and remove them. Remember that your credit report is a true reflection of your present financial worth and therefore the better your score is, the better will be your true picture.
  • Dispute the errors and keep documents: The errors that you locate should be disputed by filling out the dispute form provided with your credit report. You should clearly identify every mistake that is reducing your credit score and also send a photocopy of the credit report with the mistakes. Keep documents of each and every copy and the forms, letters and all other documents to avoid discrepancies in the near future.
  • Repay high interest debt: Now is the time to work out a spending plan and also repay your high interest debts at the same time. Call your creditors, set up a meeting date with them, revise the repayment structure and maintain payments so that you can boost your credit score.

Therefore, when you’re spending sleepless nights thinking about the prospects of taking out a loan at an affordable rate with tarnished credit score, go for credit repair. Take the steps mentioned above instead of paying a professional credit repair program.

This guest post was contributed by Creditmagic.org, a community to help you repair your credit, get free consumer credit counseling and tips.

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Credit Scores And Your Mortage

Posted on January 24, 2012 by admin

MortgagesA mortgage is a loan that you take in order to purchase a piece of property. Like any other loan, there is a risk to the lender that you will borrow the money and not pay it back. Although the risk to the lender is lower since the home or property acts as collateral to secure the loan, banks still do not want to have to foreclose on a home. Therefore, banks and mortgage lenders will take a number of different steps to determine if you can qualify for a mortgage or not. One of the most important of these steps is checking your credit score to determine if you are credit worthy or not.

Your Credit Score

Your credit score is a number, of three digits, determined by a specific formula. The basic formula used in most cases was created by the company known as Fair Isaac, which is why you sometimes hear a credit score referred to as a FICO score. Scores generally range from the mid-300′s to 850, with a score above 720 typically considered to be a “good” score.

The formula used to determine your credit score looks at several different facets of your past borrowing behavior. For instance, one important component in determining your credit score is whether you have paid your bills on time in the past or whether you’ve ever been late or failed to pay. This is vitally important to creditors because if you failed to meet your obligations in the past, there’s a good chance you will do so again. Your payment history is responsible for determining around 35 percent of your FICO score.

Other factors that come into play when determining your score include how much you are actually using of the credit you have, how many accounts you have open and how old they are, the different types of credit accounts you have and how many “inquiries” you have (inquiries are placed on your report when you apply for new credit).

Typically, lenders like to see a low utilization of the cards you have, as maxing out all of your available credit can indicate a debt problem developing. Lenders also like to see a long credit history, a mix of different types of credit and few new applications that could indicate you are starting to run up a lot of debt.

How Your Score Affects Your Mortgage

Knowing how your score is determined and whether it is bad or good is absolutely essential, as your credit score has a direct impact both on whether you will be approved for a mortgage loan and on how much you will pay if you are approved for the loan.

A very low credit score can prevent you from having your mortgage approved at all, as the mortgage lenders will see you as a significant credit risk and a person likely to default. After all, if you haven’t handled your money and credit in the past, there’s nothing to convince the lender that you will do so in the future.

A high credit score, on the other hand, can make it much easier to qualify for a mortgage loan. When you do qualify, you will also be rewarded with the lowest interest rates available. The lower your interest rate, the lower it will cost to borrow the money and the lower your monthly payments will be.

Those with a credit score in the mid-range should be able to qualify for a mortgage but may have slightly higher interest rates. By looking at a mortgage calculator, you can see the specific impact these higher rates will have. However, putting a larger down payment down and shopping around for a lender can still make it possible to get an affordable mortgage with decent credit.

This guest post is contributed by SimplyFinance.co.uk.

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Establishing Credit History

Posted on January 19, 2012 by admin

Credit HistoryOne thing many immigrants realize when they come to the United States is that their credit history doesn’t follow them. America is a credit-centered culture. You need good credit to buy a house, finance a car and obtain educational loans and even to get a new job. Here are a few tips to help new immigrants establish a good credit history and start enjoying the American life.

Open a Bank Account

Newly arrived immigrants should first apply for a Social Security number. Once you receive your number, open a checking or a savings account at a local bank. Keep this account in good standing to show potential creditors that you can manage money.

Get a Bank Credit Card

Obtain a secured credit card from your bank. A secured credit card simply means that the funds in your checking or savings account will be used as collateral if you don’t pay off your balance in a timely manner. Keep in mind that banks usually freeze some of your funds, typically the same amount as your credit card limit. Secured credit card limits tend to be low, but once you’ve established the fact that you make timely payments, you can apply for an unsecured credit card from your bank.

Obtain a Department Store or a Gas Credit Card

Department store and gas credit cards are usually easy to obtain. Just make sure that you make the monthly payments on time and the credit card company will send a positive report to the credit bureaus. Some gas and department store cards have very high interest rates, however, so don’t charge more on the card than you can pay off in a single month. Once you’ve proven that you’re responsible enough to make reliable payments, more companies will be willing to send you credit cards.

Use a Co-Signer

If you have an American member of the family with a good credit history, consider asking that person to co-sign a credit card or a loan application with you. Bear in mind that many people are reluctant to get into a co-signing situation because the person who co-signs takes on the responsibility for your debt if you cannot pay.

Finance a Store Purchase

Many retail stores allow you to purchase items on credit without paying interest for a set amount of time, typically 90 days. This financing is a kind of loan, so it helps you establish a good credit history if you pay off your balance on time. Try to pay off the entire purchase before the allotted “no interest” time expires to avoid paying high interest rates or any hidden fees.

Apply for a Major Credit Card

After spending about six to twelve months building up good credit, apply for a card from a major credit card company. Use the credit card comparison tool at Moneysupermarket to find a card with a low interest rate. Be careful that you don’t overextend yourself on credit while trying to build your credit history. Remember that establishing a good credit history takes time and patience.

Guest post contributed by Moneysupermarket.

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Protect Your Identity, Protect Your Credit Scores

Posted on April 2, 2011 by admin

One of the unfortunately frequent causes of low credit scores is also identity theft. ID theft has been growing rapidly over the past years and despite constant battles to prevent and stop it will surely never go away. There are plenty of ways you can get your identity stolen today: phishing websites, dumpster diving, employee records are just some of them. When you’re applying for a loan or mortgage you will also have to give out your personal details which puts you at additional risk. Some of the companies do in fact exist only to scam people and steal their personal records, which inevitably leads to identity theft.

Every year in the US millions of people fall victims to identity theft. The average numbers victims spend recovering from stolen identity is 330 hours: 26-32% of victims spend 4 to 6 months dealing with their case, and 11-23% report dealing with their case for 7 months to a year. That’s months of sleepless nights, and plenty of lost money as well. Read on for some other additional statistics on identity theft:

  • Victims lose $1,820 to $14, 340 in wages dealing with their cases
  • Average expenses on ID theft cases is around $1200
  • Nearly half (47%) of people have trouble getting a credit or a loan, as a direct result of their identity being stolen
  • 19% of all victims have higher credit rates, and 16% have to pay higher insurance rates
  • 66% of victims’ personal information is used to open a new credit account in their name
  • Only 20% of victims find it easy to reach someone in a credit reporting agency after receiving their credit report
  • 20% of ID theft victims will have the misinformation and errors removed from their credit report after their first request for the credit reporting agency to do so

Just by reading these short statistics on what happens to people after they get their identity stolen should give you a reason to find out more about how you can prevent it from happening to you. Getting your identity stolen is one of the worst things that can happen to someone, not because it will lower your credit score, but because it will take months and sometimes even years to recover from it. That means months of sleepless nights and thousands of dollars spent.

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4 Steps You May Take To Repair Your Credit Yourself

Posted on March 23, 2011 by admin

If you are struggling under a lot of credit card debts, then you should consider solutions like credit card settlement or consolidation in order to get rid of your debts. However, it is also very important for you to keep track of your credit score if you do not want to fall into any difficulties.

It is essential that you maintain a good credit score as that determines whether you will get loans, employment, shelter, etc. Thus, if your credit sore is low due to rising debts, then you should take care to ensure that you do something about it. This means that you are to repair your credit score. It is important for you to know that you do not need to find a reputable company in order to repair your credit, you can do it yourself.

Some steps that you must follow in order to repair your credit yourself are as follows.

1. Getting your credit reports: In order to repair your credit you must first be aware of what you are to repair. It is impossible to determine this until and unless you take a look at your credit report. Thus, the first thing that you must do in order to find out what is it that you have to repair, is to order your credit report. You must order your credit reports from all the three major credit bureaus. They are Equifax, Experion and Trans union. It is important that you get reports from all the three bureaus because some of your creditors will only report to one credit bureau. None of the credit bureaus share any information. Thus, if you want to get a complete picture of your credit scenario, then you must get all the three reports. This will also ensure that you get to know how and where you are needed to repair your credit report.

2. Examining your credit report: After you get all your credit reports you are to go through them carefully in order to find out if there is any sort of problem. When you come across any information that you think is wrong, then you should mark it with highlighters. You must look for any accounts that are not yours as well as payments that have been reported incorrectly. Look for any inaccuracies as tracing these will help you get your credit repaired.

3. Disputing what is not accurate: If you think that any particular information on your credit report is not accurate, then you have the full rights to dispute it. The instructions that you should be aware of when disputing information in your credit report is provided to you when you order for a credit report. In case you did not receive this, then you should send a letter to the credit bureau. This letter should give a detailed description of the information that you think is inaccurate. Along with the letter you should also send a copy of your credit report with the inaccurate sections clearly highlighted.

4. Handling past due accounts: You should be aware that your payment history plays a very large part in making your credit score. Thus, if you have many past due accounts, then your credit will get affected very badly. If you want to take care of your credit score, then you should try and improve this. What you should aim at is to get your past due accounts reported as paid or current. You should also try and work with your debt collectors and get your collection accounts taken care of. In order to improve your credit score you should also try and pay off all charge offs.

These are a few ways in which you can try to improve your credit score and lead a healthy financial life.

Contributed by Debt Community Member.

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How To Get a Free FICO Credit Score Report

Posted on September 21, 2010 by admin

Did you know you can now get a free credit score report from one of the leading financial organizations in the World which has an unmatched level of commitment and resources?

myFICO.com is a division of Fair Isaac Corporation (FICO) whose clients include all of the Top 100 U.S. Credit Card Issuers and 9 of the Top 10 Fortune 500 List Worldwide.

FICO has sold more than 100 BILLION Credit Scores to date and they are the most used Credit Bureau scores in the world. They are the ones making the credit score standards and the best place to get your free credit score report, period!

You too can now get your credit score report straight from the most trusted and reliable source and find out exactly what your FICO score is. Be sure to take advantage of it!

Note: myFico no longer offers free credit scores. If you need to check your credit score for free now please click here.

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6 Easy Ways To Improve Your Credit Score

Posted on July 23, 2010 by admin

Credit scores are constantly changed and re-calculated and anything you do financially can impact it, both positively or negatively. Here’s a list of a few ways you can (dramatically) improve your credit score.

1. Review your credit report

It’s not uncommon for credit score reports to contain errors. Make sure you double check it and fix any mistakes as it may impact your overall credit score significantly.

2. Pay your bills on time

This is also an extremely important things to watch out for when trying to improve your credit score. Paying your bills frequently and in full amount can go a long way in improving the credit score. If you have the means then make sure your debts are always paid. Although it will not improve your credit score over night, in a few months you should see a dramatic change.

3. Reduce your balance on credit cards

Reducing the balance on your credit cards to 75% or less of the available credit will also affect your credit score. 25% is a preferable amount, although no debt is always best.

4. Keep old credit cards and accounts

Creditors will always look into your financial history, so even if you’re not using that old credit card you may get a better credit score. Pay a small amount every few months with that credit card and as soon as the statement arrives pay it in full.

5. Don’t make unnecessary credit report inquiries

Frequent inquiries into your credit reports will lower your score. Do note if you’re looking for a best deal for a loan make sure to have all your inquiries within a week or two as they will be counted as only one inquiry.

6. Pay down your credit cards

When improving your credit score the best strategy is to pay down credit cards which are closest to their limit, rather than the typical advice to pay those with highest rates.

These are just six tips but can go a long way in improving your credit score. Make sure you always keep them in mind!

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What Your Credit Score Affects

Posted on July 22, 2010 by admin

The single most important thing to note about a low credit score is that not only may it prevent you from actually receiving credit, but you will also get a higher interest rate as lenders see you as a bigger risk.

The following chart will show you how a low credit score can significant affect your interest rates when applying for a car loan:

Credit Score 36-month new auto loan 48-month new auto loan
500-589 18.597 18.598
590-624 16.206 16.206
625-659 12.225 12.226
660-689 9.498 9.500
690-719 7.386 7.390
720-850 6.674 6.678

So what did we find out from this table, except the rich are getting richer? With a low credit score, you will end up paying 3 times higher interest rate than someone with a higher credit score.

If you still think your credit score doesn’t matter, I hope this explains exactly why it does. It’s not only about actually getting a loan, but rather how much interest rate you will have to pay for it. I’m sure you’ll agree it’s much more acceptable to pay a 6.6% interest rate than 18.5%.

A lot of insurance companies are lately using credit scores to determine your rates as well; the so-called insurance quote. If you read one of my previous posts you should also know it’s being used by a lot of other companies, as well as your employers. Credit scores are becoming more and more common and even more important with each passing day, so put some thought into it and boost your credit score with our tips today.

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Credit Score Factors – How It’s Calculated

Posted on July 22, 2010 by admin

One of the most important things about improving your credit score is knowing how it’s calculated. There are several key factors used in determining your credit score and in this article we’ll discuss them.

There are several methods of credit score calculations but the most popular one is FICO. We won’t be going into too many details about its origin since it’s not important.

A person’s credit score can range from 300 to 850. The exact formula for determining it is not publicly released, but fortunately plenty of information about it is available if you know where to look. Here’s a breakdown of the calculation of a credit score:

  • 35 percent of your credit score is based on your payment history.
  • 30 percent of the score is based on outstanding debt.
  • 15 percent of the score is based on the length of time you’ve had credit.
  • 10 percent of the score is based on new credit.
  • 10 percent of the score is based on the types of credit you currently have.

The first thing lenders look at and the most important factor is your payment history as all lenders first and foremost want to know if and how frequent you are paying your bills. Any bankruptcies and debt collections also come into play in here, especially if they are recent.

Outstanding debt is the second thing these companies look for. Your credit card limits, home loans or car loans and more are all in here. If you possess more credit cards at their limits and have more loans the score will be lower. It’s a good practice to keep all your credit cards a 1/4 of their limits or higher.

The length of time you have had credit is a very important factor as well. You see, the longer you have credit is actually better for your credit score! It’s because the companies have better insight into your payment history and can better predict your future payments.

Opening new credit accounts will lower your credit score for a short periods of time. If you frequently inquire about credit you may even get a negative credit score for that so be careful.

The last 10 percent of your credit score calculation is based on the types of credit you already have. The companies look at whether you’ve had experience with a variety of credits and loans and improve your credit score appropriately.

You should remember that some lenders have additional credit score factors in their calculations as well such as your salary or how long you’ve been employed. Those factors often can not be controlled by you however they can still be improved — but we’ll discuss that part in one of the next articles.

If you want to find out (for free!) what your credit score is be sure to check this out.

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