Thursday, May 29, 2008

All about credit score happenings

How strange it looks like if your loan application gets disapproved, or maybe you were approved, but the interest rate charged is pretty much higher than your expectation. How do you feel? My credit score is good, I know I checked. Maybe its not as good as you think. It all depends on there you got it and what kind of credit scores it is.

Only facts behind all this is there’s several different credit scoring methods. Credit scores calculated from the same credit reports can differ substantially from credit scoring method to credit scoring method. So how can you ever know what your credit score really is? Well, luckily, 75% percent of lenders use FICO scores exclusively and you can purchase FICO scores of your own.

FICO credit scoring is a numeric method of scoring your credit worthiness developed by Fair Isaac and Company. Your credit score is a number between 300 and 850 that tells creditors how likely you are to pay your bills. The higher the number, the better it looks to potential lenders and creditors.

The three major credit bureaus each have their own version of the FICO score: Equifax uses the Beacon system, TransUnion uses the Empirica system, and Experian uses the Experian/Fair Isaac system. Despite each credit bureaus' use of their own versions, all systems are based the original Fair Isaac FICO scoring method, so each credit score calculated with these systems are generally called FICO scores. However, although most lenders do use FICO scoring, some lenders may have their own scoring methods.

There are many places where you can get your FICO score from all three bureaus. If you order your credit score from anywhere else, again be aware that these scores are "FAKOs" (or "fake") and can differ considerably from your FICO credit scores.

Adding to the confusion is the credit bureaus themselves. Recently, Experian revealed that the national average credit score of its consumers is 678. This is very misleading to the average consumer. When you buy your credit report and score directly from Experians website, you are getting what they call the "PLUS Score," which is NOT a FICO score, and is NOT used by lenders anywhere. (Equifax is the exception--you can buy your FICO score directly from them at their website. The 678 PLUS Score reported by Experian is actually the average of consumers' PLUS Scores, not their FICO Scores.

Clearly, the PLUS Score (and all Non-FICO scores) are useless. Not only that, but such hype misleads consumers into purchasing their PLUS Score thinking that they are getting the same credit score that their lender will use. Non-FICO scores are worthless not matter what the credit bureaus or any website selling non-FICO scores claim. Even a few points difference in your credit score can mean confronting the reality of the loss of thousands of dollars out of you’re pocket--a loss that you probably didn't plan for. The next time you want the most accurate credit score available, do yourself a favor and get the industry standard: the FICO credit score.

Monday, May 26, 2008

Facts about credit reporting agencies

You may never see one, or visit one, but the credit reporting agency is always there in the background. These are the companies that assign credit ratings for both corporations and individuals. The credit rating is a way of measuring credit worthiness-or in other terms, the ability to pay back a loan.

You may envision a remote room in an unknown place where individuals in lab coats collect and collate personal data on people. Actually, in the earliest days of credit reporting, this was exactly the case. The ratings were compiled by hand and banks could call and check on anyone they wanted verbally. In modern times, the data is sent in via magnetic tape reporting or secure data transfer and the only times humans really involved is when there is an inaccuracy on your credit report that needs to be investigated.

There are hundreds of extensions of the "Big Three" Experian (formerly TRW), Equifax and TransUnion that are located all across the country. Because the credit bureaus competitors and do not share information with one another, it is a good idea to check the Big Three regularly to ensure there are no errors or omissions on your personal credit report.

Thus, it becomes the responsibility of the individual to check up on the people that are checking up on everyone else. Changes in the statutes for credit reports now make it possible for everyone to get one free report from each of the three major credit bureaus per year.

Looking at your own credit report will give you valuable insight on how your history is being rated. It would also help to understand the laws that govern how these agencies are able to do business. Know your rights! As the old saying goes, "If you don't know your rights, you don't have any." There may be times that require you to challenge something inaccurate on your report. Since your credit report is the way many firms will "know" you, you want every item in it to be absolutely accurate.

You may think that you have a good credit report but a credit report that has something questionable contained within it may be the difference between getting that new credit card or auto loan and being denied. And if you're in the process of applying for credit without this knowledge, you can be turned down. This is why checking up on your personal credit report and going through the complaint or correction process if necessary is so important.

Since the credit reporting agency is the standard of how the world determines credit worthiness, make sure that any lenders or retailers you want to do business with are reporting to one of the major agencies and that information gives a one-hundred percent correct picture of how you handle your personal finances.

Thursday, May 22, 2008

Credit report fraud: Freeze It

Recent federal laws and Minnesota state laws help citizens protect themselves from new account fraud by allowing “freezing.” The laws empower any consumer to freeze their credit report by contacting any of the three major credit reporting agencies and requesting a credit report freeze. This action will deny potential thieves access to the credit history and prevent them from opening new credit cards or loans in the consumer’s name.

Victims of identity theft can have their reports frozen without a charge, but they will need the theft documented by a copy of the police report or case number. People who have not been victims of identity theft can choose to freeze their report for a $5 fee to each of the credit reporting agencies. When an agency receives a freeze request, it must place the freeze within 3 days of the request. In addition, the agency must provide a unique Personal Identification Number to the consumer within ten days.

The PIN can then be used by the consumer to temporarily lift or “thaw” their report for a specific period of time or for a specific creditor. For example, you are car shopping and want to allow a dealership, credit union or bank to look at your credit history to obtain a car loan. Or you may request your information be openly available for a specific period of time, like 30 days, in order to shop at several locations. After this period is over the report will automatically refreeze.

The thawing process is free to those who have been identity theft victims. Those who have not been victims will be charged the $5 fee for thawing.

Tuesday, May 20, 2008

Check your credit online freely ‘n safely

No future plans to apply for a loan or credit card then there’s no need to keep an eye on your credit report and score. But failing to regularly check your credit report leaves you open to victimization - by the actions of criminals and the errors of creditors.

The credit crunch is squeezing consumers across the country, and not just those looking for loans. With credit increasingly costly and hard to come by, it's more important than ever to protect the credit you already have. That means closely monitoring your credit score, the single most important tool you have for obtaining favorable credit terms now and in the future.

"Identity theft, credit fraud and erroneous credit reporting can happen to even the most conscientious consumers," says Jeff Bartlett, president of "Knowing what's on your credit report can help protect you from these increasingly common credit crises."

Now online services make it easy to keep an eye on your credit score. Remember, there are also scammers online posing as credit-help companies, so keep a few things in mind when obtaining your credit report from a site:

* Is it safe? Sensitive information, like your social security number, should be encrypted for security.

* Is it reputable? The company hosting the site should demonstrate credentials or associations with organizations that recognize reputable businesses., for example, is a member of the Better Business Bureau.

Is it free? While some reputable sites may charge for your report and score, why pay if you don't have to? At, your report and score are both free with a 30 day complimentary trial of credit monitoring.

Is it offering you more? In addition to your free credit report and score. You'll also receive tips on how to improve your score, such as paying on time if your report shows missed or late payment history, keeping credit card balances lower than your total credit limit and keeping a variety of credit such as auto loans and credit cards to show financial responsibility.

Sign up for a free credit report and score at any website and you will also receive a 30-day free trial of the site's credit monitoring service. Credit monitoring can help prevent identity theft, providing you with automatic notification of changes to your credit report.

Thursday, May 15, 2008

Boost your Fico score now!

Most of the lenders uses Fico score as credit score. Since so many borrowers are failing to pay debts, lenders are placing a lot more importance on that number.

The FICO score is calculated based on complicated math which takes into account the behavior of millions of consumers. But, there are ways to take control and boost your score.

It's no longer enough to hit 620. Lenders are requiring scores at 680 and above to be worthy of their money.

Peter Benavides cares about his FICO score because he eventually wants to buy a home in the Bay Area.

He believes he is financially responsible and holds strong credit. But tells a different story. It's an online calculator by Fair Isaac - the firm that invented the primary credit scoring system and it shows his score is lower than he expected at 602.

Benavides is surprised by his subprime status because the program says he pays bills on time and only carries $1,500 in debt. Believe it or not, the problem is with his lack of plastic.

Jen Crawford with explained, "His number one factor or biggest problem is he's using 95 percent of his credit cards."

Because Benavides puts purchases on only two credit cards, it gives lenders the idea that he is maxed out and more likely to miss payments. If he opens a third card that debt will spread out.

As long as Peter continues to use 50 percent or less of his available credit his FICO score will rise.

"He can easily reach the low 700s within a couple years," Crawford said.
Peter Benavides looks forward to the challenge.

"As long as I know ways to improve my score I'll feel more confident for the future," He said. "There is a price to pay and you have go to with it. You have to prove you are responsible enough to obtain a good credit score."

I think all these tips would definitely help to grow your FICO score fast.

Monday, May 12, 2008

Tips build a good credit history quickly

Nowadays it has been very essential to hold a good credit history to anyone who expects to make major purchases, rent an apartment or start a business. You could build good credit easily but you need to control useless expenses. Follow these tips to help build your credit history.

First of all check which accounts are shown on your credit report.

Try to obtain a copy of your credit report at least once a year.

Go through the credit report and check whether the information shown is accurate or not.

Make your entire bill Payments on time. You don't need to pay the entire balance each month, but make at least the minimum payment promptly.

Avoid going over the credit limit on your credit card account. Some credit card companies allow you to do this as a courtesy, but it can reflect poorly on your ability to handle your account.

Cancel credit cards you aren't using or don't anticipate using.

I’m not an professional agent but all these tips are self used first as I got great benefits from these I tried to explain here.

Friday, May 9, 2008

Credit report requests on hike

According to the recent figures which indicate that consumers are getting aware of the importance of checking their credit profile and rating before applying for credit, with reports that around 20% of consumers now check their credit report before they apply for any sort of finance.

The global credit crunch has resulted in far tighter credit conditions, and many people have found themselves being turned down for finance as a result of this.
As a result of these tighter credit conditions an increasing number of people are checking their reports either before they apply for finance, in order to see whether there are any problems that could hinder them, or after being turned down to check what the problem was.

Officials from the credit reference agency stated that the number of people requesting their credit reports now compared to six months ago had almost doubled.

The agency said: “Up to 20 per cent of people now check their credit report before applying for credit,” adding: “the vast majority use the internet to do so in order to get immediate access to their score, and also to receive alerts if their credit status changes.”

Another official said: “With lenders reacting to the credit crunch by tightening their lending criteria, you can help stay on top of your borrowing and how well you’re managing your finances by regularly monitoring your credit report.”
Checking credit report is not a bad habit but it’s the only factor which really makes things easier for all consumers around the world.

Tuesday, May 6, 2008

Credit score protection issues

Are you looking for another credit card? Make your mind properly. You need to consider your credit score as its important aspect for someone need loans and once it goes down, it's hard to recover.

It's surprising how many people don't know their credit score. Many people just assume they know, but that could get you in to trouble.

Debt collector Mike Nowak says, "Right now, we're at the highest debt I've ever seen in my 20 years." With all that debt, collection agencies might be coming after you. Having an account go into collections affects your credit score. Hold on, that's not the only thing you have to be concerned with.

Brian Holiman, owner of Yuma Mortgage Group says, "how you pay your bills, the type of credit you have, your proportion of your balances to your credit limit, and whether you have any public records, collections, bankruptcy, stuff like that."

Always keep in mind to pay off the dues on time because it’s the important component. Your bill is only considered late if you pay thirty days after the due date. Besides looking at your bills, look at your number of credit cards. "If you have a lot of store accounts it does have a negative effect on you because credit card companies see you as a heavy credit user."

If you want to improve your credit, "the first thing they do is pay off their credit card, but then they close that account thinking that helps." It doesn't help, because you want to have low debt to income ratio. Instead, pay the card off, leave it open, but don't use it.

Another idea to help with credit card debt, take a loan out to pay it all off. Cut up the credit cards. Pay off the loan with a lower interest rate. "Once you establish a plan or get into a re-payment structure the weight of the world is off of you. It's just getting started."

All these points are basically made by keeping the user’s beneficial end and also some of them are recorded while going through general conversation with some debt experts.

Monday, May 5, 2008

Grab your free annual credit report fast!

Now consumer credit reporting companies (Equifax, Transunion and Experian) are required to provide you with a free copy of your Free Annual Credit Report according to a recent change to the federal Fair Credit Reporting Act. Consumers could retrieve their free credit report once every 12 months using the governments free credit report site, or more if they use a third party service to make the request for them.

The Fair Credit Reporting Act requires that Equifax, Transunion and Experian all provide accuracy and privacy of consumer information when you use their websites online to obtain your yearly credit report free. Additionally, the Federal Trade Commission, (the US consumer protection agency), oversees and enforces the FCRA with respect to consumer reporting companies.

When you make a request to access your Annual Free Credit Report you are allowed to get the report from either Equifax, Transunion or Experian or any combination of the three. A lot of people choose to request it from only one free credit reporting agency at a time so that they can request additional checks throughout the year. If you are access your free credit report prior to applying for a loan, you should investigate to see which agency the loan office checks and get your credit report from that company. This will ensure that you have the same information that your lenders are seeing.

The Federal Trade Commission (FT), the nation's consumer protection agency, enforces the FCRA with respect to consumer reporting companies. It's your choice that you may order one, two, or all three reports at the same time, or you may stagger requests.

I hope after going through these guidelines one can obtain their annual credit report for free within 5 minutes.