Mar
31
A Brief Credit Repair History
Filed Under Credit History | Leave a Comment
(A Little History of the Credit Repair Business)
Risk-based pricing is the real reason that there is a credit repair business. Risk-based pricing is the practice of charging different interest rates to different people. Lenders decide who gets the best interest rates based almost entirely on a person’s credit score. Credit repair allows borrowers to qualify for the lower interest rate. To achieve credit repair, history must be rewritten, to a certain extent. Inaccurate, misleading and unverifiable information must be removed in order to improve a person’s credit score.
People involved in the credit repair business know how an individual’s credit score is computed. One might think that it is based entirely on a person’s payment history, but other factors are used to determine a person’s credit score. Some borrowers consider only the FICO credit scores; some consider the credit rating and others actually look at the information listed on a credit report by one or more of the credit bureaus. The history of the credit repair business or credit repair history is relatively short, but the history of credit scoring and rating goes back nearly as far as bank loans. Lenders needed some sort of system to evaluate a person’s “creditworthiness”.
Several laws govern what information can be used to determine a person’s creditworthiness. Several laws are designed to help consumers report unfair or inaccurate information. A credit repair business that is familiar with the laws regarding credit issues will be able to provide the most help to consumers who hope to achieve credit repair. History does not always repeat itself, just because an individual had credit problems in the past, does not mean that they will continue to have credit problems in the future. Critics of risk-based pricing feel that charging a person a higher interest rate, because they have had problems repaying loans in the past will only make it harder for that same person to repay loans in the future. When the credit repair business works, it works to keep this from happening.
Even a person whose credit score is “not that bad” can benefit from credit repair. If a company in the credit repair business has an effective credit repair history, they may be able to save a consumer much more than the cost of the services. For instance, FICO provides the following figures. For a $216,000 mortgage, a FICO score of 760 or above would qualify for a 6.29% interest rate, equaling a monthly payment of $1335. The rates go up as the score goes lower. A score of 700-759=$1367, 680-699=$1392, 660-679=$1423, 640-659=$1486, 620-639=$1567 and a credit score below 620 will require “creative financing”. In 2003, less than 30% off all Americans had a credit score between 750 and 799, and 50% were below 700. So, an effective credit repair business could have saved Americans between $768 and $5568, just in interest on their mortgages in the last two years.
If we look at credit repair history on an individual basis, some credit repair specialists are more effective than others. Some recommend solutions which can create more problems than they solve. The credit repair business can be a dream come true to persons with “really bad credit” and a money saving tool to those with “not so bad” credit, if the person chooses the right firm.
By: Patsy Rose
Risk-based pricing is the real reason that there is a credit repair business. Risk-based pricing is the practice of charging different interest rates to different people. Lenders decide who gets the best interest rates based almost entirely on a person’s credit score. Credit repair allows borrowers to qualify for the lower interest rate. To achieve credit repair, history must be rewritten, to a certain extent. Inaccurate, misleading and unverifiable information must be removed in order to improve a person’s credit score.
People involved in the credit repair business know how an individual’s credit score is computed. One might think that it is based entirely on a person’s payment history, but other factors are used to determine a person’s credit score. Some borrowers consider only the FICO credit scores; some consider the credit rating and others actually look at the information listed on a credit report by one or more of the credit bureaus. The history of the credit repair business or credit repair history is relatively short, but the history of credit scoring and rating goes back nearly as far as bank loans. Lenders needed some sort of system to evaluate a person’s “creditworthiness”.
Several laws govern what information can be used to determine a person’s creditworthiness. Several laws are designed to help consumers report unfair or inaccurate information. A credit repair business that is familiar with the laws regarding credit issues will be able to provide the most help to consumers who hope to achieve credit repair. History does not always repeat itself, just because an individual had credit problems in the past, does not mean that they will continue to have credit problems in the future. Critics of risk-based pricing feel that charging a person a higher interest rate, because they have had problems repaying loans in the past will only make it harder for that same person to repay loans in the future. When the credit repair business works, it works to keep this from happening.
Even a person whose credit score is “not that bad” can benefit from credit repair. If a company in the credit repair business has an effective credit repair history, they may be able to save a consumer much more than the cost of the services. For instance, FICO provides the following figures. For a $216,000 mortgage, a FICO score of 760 or above would qualify for a 6.29% interest rate, equaling a monthly payment of $1335. The rates go up as the score goes lower. A score of 700-759=$1367, 680-699=$1392, 660-679=$1423, 640-659=$1486, 620-639=$1567 and a credit score below 620 will require “creative financing”. In 2003, less than 30% off all Americans had a credit score between 750 and 799, and 50% were below 700. So, an effective credit repair business could have saved Americans between $768 and $5568, just in interest on their mortgages in the last two years.
If we look at credit repair history on an individual basis, some credit repair specialists are more effective than others. Some recommend solutions which can create more problems than they solve. The credit repair business can be a dream come true to persons with “really bad credit” and a money saving tool to those with “not so bad” credit, if the person chooses the right firm.
By: Patsy Rose
Mar
28
Credit Report & Repair Scams
Filed Under Credit Report | Leave a Comment
Newspapers, radio, TV and the Internet are filled with advertisements that offer for a fee to erase accurate negative information in your credit file. The credit repair scam artists who run these ads can’t deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit history record. This section is designed to help you understand credit reports and credit repair scams.
Credit Reports
Does your credit report accurately represent you? A recent study conducted by the Public Interest Research Group (PIRG) found over 70% of credit reports contain errors. Among the principal findings of the report were the following:
* Twenty-nine percent (29%) of the credit reports contained serious errors that could result in the denial of credit.”
* “Serious” errors included false delinquencies, public records or judgments that belonged to a stranger, or credit accounts that did not belong to the consumer; Seventy percent (70%) of the credit reports contained mistakes or errors of some kind, also including the following:
* Forty-one percent (41%) of the credit reports contained incorrect personal demographic identifying information; Twenty percent (20%) of the credit reports were missing major credit cards, loans, mortgages, or other accounts that are critical to demonstrating consumer credit worthiness.
Consolidate debt your debt now free — quote now!
One of the first steps to credit repair, is understanding credit reports. When applying for mortgages, home loans and refinances, one of the most important factors in determining whether or not you will be approved is your credit. This is true for other important factors as well, such as obtaining lower interest rate auto loans and credit cards. Good credit can open many doors.
If you have had credit issues in the past, or are currently in a situation that will affect your credit, be prepared to address these issues upfront.
The mortgage industry has its own language when it comes to your credit report. Mortgage lenders get their name from the grading system they use. Items that determine your credit rating (A+ to D-) are payment history, amount of debt payments, bankruptcies, equity positions, and credit scores. Credit scores are also known as “FICO” scores, and are used by the mortgage industry to determine credit risk. The higher the credit score, the better the credit risks.
FICO stands for Fair Isaac Company, the company that created the original scoring system. Each credit bureau has its own unique system that allows them to offer a score based solely on the contents of the credit bureau’s data about an individual. A numerical score at one bureau is the equivalent of the same numerical score of another. For example, a score of 700 from Experian indicates the same creditworthiness as a score of 700 from Trans Union or Equifax. However, the calculations used to determine these scores are different for each bureau.
FICO scores range from 375 to 900 points. A score of 650 or above indicates a very good credit history. However, lenders do not necessarily give the same value to a particular credit score, and they do not necessarily use credit scoring!
FICO scoring places a value on the types of accounts you hold, as well as your credit history. The formula that determines your scores, however, is not disclosed to the consumer.
The 5 most important factors to determining your credit score are:
* Your payment history
* The amount of outstanding debt you have compared to your credit limit
* Your credit history
* The types of credit you use
* Negative information
Remember, FICO scores range from 375 to 900 points. A score of 650 or above indicates a very good credit history.
Credit Repair Scams
You’ve seen it in newspapers, maybe even heard it on the radio or television — Erase accurate negative information in your credit file! — The credit repair scam artists who run these ads can’t deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit record. This section is designed to help you understand the two top credit repair scams that are circulating newspapers, television, magazines and radio.
Credit Repair Scam #1 – File Segregation
If you filed bankruptcy, you may be the target of a credit repair scam called “file segregation.” In this scam, you are promised a chance to hide unfavorable credit information by establishing a new credit identity. That may sound like a good idea but, file segregation is illegal. If you use it, you could face fines or even a prison sentence.
Credit Repair Scam #2 – New Credit Identity
If you have filed for bankruptcy, you may receive a letter from a credit repair company warning you about the inability to obtain credit cards, personal loans, or any other types of credit for 10 years. For a fee, the company promises to help you hide your bankruptcy and establish a new credit identity to use when you apply for credit. These companies also make pitches in classified ads, radio, TV, and the Internet.
When signing up for the service you will be required to pay a fee and may be directed to apply for an Employer Identification Number, commonly referred to as an EIN, from the Internal Revenue Service (IRS). Typically, an EIN is quite similar to a social security number and is used by businesses to report financial information to the IRS and the Social Security Administration.
After you receive your EIN, the credit repair service will tell you to use it in place of your social security number when you apply for credit, inform you to use a new mailing address and obtain additional credit references.
That may sound like a good idea but, using false information is illegal and considered fraud. If you use it, you could face fines or even jail time.
Credit Repair Company’s And False Claims
Credit Repair False Claim #1: You will not be able to get credit for 10 years.
Each creditor has its own criteria for granting credit. While one may reject your application because of bankruptcy, another may grant you credit. And, given a new reliable payment record, your chances of establishing additional credit could probably increase as time passes.
Credit Repair False Claim #2: The company or “file segregation” program is affiliated with the federal government.
The federal government does not support or work with companies that offer such programs.
Credit Repair False Claim #3: The “file segregation” program is legal.
It is a federal crime to make any false statements on a loan or credit application. It is a federal crime to misrepresent your Social Security number. It also is a federal crime to obtain an EIN from the IRS under false pretenses. Further more, you could be charged with mail or wire fraud if you use the mail or the telephone to apply for credit and provide false information. Worse yet, file segregation likely would constitute civil fraud under many state laws.
Your Rights Under The Credit Repair Organizations Act
This law prohibits false claims about credit repair and makes it illegal for these companies to charge you until they have performed their services. It requires that companies tell you about your legal rights. Credit repair companies must provide this in a written contract that also spells out just what services are to be performed, how long it will take to achieve results, the total cost, and any guarantees that are offered. Under the law, these contracts also must explain that consumers have three days to cancel at no charge.
Finding Help for Credit Problems
It’s a good idea to try to solve your debt problems with your creditors as soon as you foresee or realize that there is a financial problem. If you can’t resolve your credit problems yourself or need additional help, contact debt-consolidation-Kimberly.com We are a full service debt consolidation organizations with clients nation wide that counsels and educates individuals and families on debt problems, budgeting and using credit wisely. We work directly with your creditors to help resolve your debt problems by negotiating a repayment schedule that is affordable for you and acceptable to the creditor.
By: Stu Lieberman
Credit Reports
Does your credit report accurately represent you? A recent study conducted by the Public Interest Research Group (PIRG) found over 70% of credit reports contain errors. Among the principal findings of the report were the following:
* Twenty-nine percent (29%) of the credit reports contained serious errors that could result in the denial of credit.”
* “Serious” errors included false delinquencies, public records or judgments that belonged to a stranger, or credit accounts that did not belong to the consumer; Seventy percent (70%) of the credit reports contained mistakes or errors of some kind, also including the following:
* Forty-one percent (41%) of the credit reports contained incorrect personal demographic identifying information; Twenty percent (20%) of the credit reports were missing major credit cards, loans, mortgages, or other accounts that are critical to demonstrating consumer credit worthiness.
Consolidate debt your debt now free — quote now!
One of the first steps to credit repair, is understanding credit reports. When applying for mortgages, home loans and refinances, one of the most important factors in determining whether or not you will be approved is your credit. This is true for other important factors as well, such as obtaining lower interest rate auto loans and credit cards. Good credit can open many doors.
If you have had credit issues in the past, or are currently in a situation that will affect your credit, be prepared to address these issues upfront.
The mortgage industry has its own language when it comes to your credit report. Mortgage lenders get their name from the grading system they use. Items that determine your credit rating (A+ to D-) are payment history, amount of debt payments, bankruptcies, equity positions, and credit scores. Credit scores are also known as “FICO” scores, and are used by the mortgage industry to determine credit risk. The higher the credit score, the better the credit risks.
FICO stands for Fair Isaac Company, the company that created the original scoring system. Each credit bureau has its own unique system that allows them to offer a score based solely on the contents of the credit bureau’s data about an individual. A numerical score at one bureau is the equivalent of the same numerical score of another. For example, a score of 700 from Experian indicates the same creditworthiness as a score of 700 from Trans Union or Equifax. However, the calculations used to determine these scores are different for each bureau.
FICO scores range from 375 to 900 points. A score of 650 or above indicates a very good credit history. However, lenders do not necessarily give the same value to a particular credit score, and they do not necessarily use credit scoring!
FICO scoring places a value on the types of accounts you hold, as well as your credit history. The formula that determines your scores, however, is not disclosed to the consumer.
The 5 most important factors to determining your credit score are:
* Your payment history
* The amount of outstanding debt you have compared to your credit limit
* Your credit history
* The types of credit you use
* Negative information
Remember, FICO scores range from 375 to 900 points. A score of 650 or above indicates a very good credit history.
Credit Repair Scams
You’ve seen it in newspapers, maybe even heard it on the radio or television — Erase accurate negative information in your credit file! — The credit repair scam artists who run these ads can’t deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit record. This section is designed to help you understand the two top credit repair scams that are circulating newspapers, television, magazines and radio.
Credit Repair Scam #1 – File Segregation
If you filed bankruptcy, you may be the target of a credit repair scam called “file segregation.” In this scam, you are promised a chance to hide unfavorable credit information by establishing a new credit identity. That may sound like a good idea but, file segregation is illegal. If you use it, you could face fines or even a prison sentence.
Credit Repair Scam #2 – New Credit Identity
If you have filed for bankruptcy, you may receive a letter from a credit repair company warning you about the inability to obtain credit cards, personal loans, or any other types of credit for 10 years. For a fee, the company promises to help you hide your bankruptcy and establish a new credit identity to use when you apply for credit. These companies also make pitches in classified ads, radio, TV, and the Internet.
When signing up for the service you will be required to pay a fee and may be directed to apply for an Employer Identification Number, commonly referred to as an EIN, from the Internal Revenue Service (IRS). Typically, an EIN is quite similar to a social security number and is used by businesses to report financial information to the IRS and the Social Security Administration.
After you receive your EIN, the credit repair service will tell you to use it in place of your social security number when you apply for credit, inform you to use a new mailing address and obtain additional credit references.
That may sound like a good idea but, using false information is illegal and considered fraud. If you use it, you could face fines or even jail time.
Credit Repair Company’s And False Claims
Credit Repair False Claim #1: You will not be able to get credit for 10 years.
Each creditor has its own criteria for granting credit. While one may reject your application because of bankruptcy, another may grant you credit. And, given a new reliable payment record, your chances of establishing additional credit could probably increase as time passes.
Credit Repair False Claim #2: The company or “file segregation” program is affiliated with the federal government.
The federal government does not support or work with companies that offer such programs.
Credit Repair False Claim #3: The “file segregation” program is legal.
It is a federal crime to make any false statements on a loan or credit application. It is a federal crime to misrepresent your Social Security number. It also is a federal crime to obtain an EIN from the IRS under false pretenses. Further more, you could be charged with mail or wire fraud if you use the mail or the telephone to apply for credit and provide false information. Worse yet, file segregation likely would constitute civil fraud under many state laws.
Your Rights Under The Credit Repair Organizations Act
This law prohibits false claims about credit repair and makes it illegal for these companies to charge you until they have performed their services. It requires that companies tell you about your legal rights. Credit repair companies must provide this in a written contract that also spells out just what services are to be performed, how long it will take to achieve results, the total cost, and any guarantees that are offered. Under the law, these contracts also must explain that consumers have three days to cancel at no charge.
Finding Help for Credit Problems
It’s a good idea to try to solve your debt problems with your creditors as soon as you foresee or realize that there is a financial problem. If you can’t resolve your credit problems yourself or need additional help, contact debt-consolidation-Kimberly.com We are a full service debt consolidation organizations with clients nation wide that counsels and educates individuals and families on debt problems, budgeting and using credit wisely. We work directly with your creditors to help resolve your debt problems by negotiating a repayment schedule that is affordable for you and acceptable to the creditor.
By: Stu Lieberman
Mar
26
I’m trying to get a personal loan of $50,000 and I have a credit score of 704 and a history of five months, I have no negative counts on my report. But I keep getting turned down. Should I wait until I’ve reach a least one year in history? Thanks for any input.
Mar
19
Bad Credit History Loans – It’s Now Your Turn to Be Happy
Filed Under Credit History | Leave a Comment
For a person having bad credit record getting a loan approved easily is not that possible. Lenders often use to turn such borrowers down or charge higher interest rates. Therefore, for a bad credit holder the way to obtain a loan is full of hurdles. However, you can overcome such hurdles with the help of the bad credit history loans.
Once going for it, you will find several benefits of the bad credit history loans. First thing is that the rate of interest is not higher. The rate of interest can be controlled by you to a great extent. If you go for the secured bad credit history loans then your interest rate will surely be much lower. While in the unsecured loans this rate will be a bit higher than the secured ones. By keeping collateral you can take the secured loans and can ask for a big amount. Generally, an amount ranging from £5,000 to £75,000 for 5 to 25 years is being offered by such loans. For unsecured loans no collaterals are required and money provided is a maximum of £25,000 for 10 years.
Another benefit of the bad credit history loans is that it will help you in improving your credit status. This will be great chance for you to improve your credit by making timely and punctual installments of this loan. Such activities can make any bad record turn into good one though this process will take some time.
If you want the bad credit history loans to be approved and sanctioned faster then can approach the online services. You will just have to go through the quotes of the online lenders, select an appropriate lender for you and fill a free online form mentioning your particular criteria or desired loan amount. After all these your money will get approved faster.
For bad credit holders with records like late payment, skipping of installments, CCJs, arrears or bankruptcy the bad credit history loans are quite ideal. Now even if you have credit problems you have an option that works in your favor.
By: Johns Tiel
Once going for it, you will find several benefits of the bad credit history loans. First thing is that the rate of interest is not higher. The rate of interest can be controlled by you to a great extent. If you go for the secured bad credit history loans then your interest rate will surely be much lower. While in the unsecured loans this rate will be a bit higher than the secured ones. By keeping collateral you can take the secured loans and can ask for a big amount. Generally, an amount ranging from £5,000 to £75,000 for 5 to 25 years is being offered by such loans. For unsecured loans no collaterals are required and money provided is a maximum of £25,000 for 10 years.
Another benefit of the bad credit history loans is that it will help you in improving your credit status. This will be great chance for you to improve your credit by making timely and punctual installments of this loan. Such activities can make any bad record turn into good one though this process will take some time.
If you want the bad credit history loans to be approved and sanctioned faster then can approach the online services. You will just have to go through the quotes of the online lenders, select an appropriate lender for you and fill a free online form mentioning your particular criteria or desired loan amount. After all these your money will get approved faster.
For bad credit holders with records like late payment, skipping of installments, CCJs, arrears or bankruptcy the bad credit history loans are quite ideal. Now even if you have credit problems you have an option that works in your favor.
By: Johns Tiel
Mar
15
I reported my credit card for fraud, and the bank put a derogatory mark on my credit report. Is that correct?
Filed Under Credit Report | 3 Comments
I got a letter from a company their credit card database had been accessed illegally and that the credit card I used may be at risk for fraud. They recommended that I contact my bank to cancel the card I used to purchase one of their products online. I called my bank immediately and had the card canceled and had another one issued. Now a month laster I’m looking at my credit report and there is a derogatory mark on my credit report from my bank saying that the card was lost or stolen under 2 of the 3 credit reporting agency’s. .
Is this correct? Do I get penalized for reporting possible fraud to my credit card?
Mar
12
The credit card market is seeing a boom with numerous market players. It has created a kind of choice chaos or rather a clutter. It is important to differentiate between a good and a bad market offer. We all have discussed enough about the good and best credit card offers but it is equally important to know about the poor credit card offers, and what to beware of.
It is important to check the credentials of a credit card company before signing up for any offer since a number of fraudulent credit card companies have also sprung up along with the equal numbers of genuine ones. There is never a credit card offer that is perfect. Each has its pros and cons. Normally, if it sounds too good to be true, then it is a sure sign of being a credit card offer for someone with an adverse credit history. Offers like these can simply rip off your pocket and leave you with peanuts. They make tall claims to lure customers but if you read between the lines there is always a trap clause that takes the air out of the claim.
However, desperate requirement you might have of a credit do not fall into the trap of these jazzy claims. They might claim to give you low APR and high credit limit even with your bad credit history. Now this is obviously unbelievable. More unbelievable means more unreliable.
Then there could be credit card offers that are ridiculously unreasonable. For example, they may have a worthless balance transfer offer with amount limited to a level of say £500. Or there could be store cards through which you can shop only at a particular shop and that too only from a particular catalogue.
These credit card offers are responsible for maximum credit card frauds or losses to customers due to unprecedented high costs. These are mostly wipe, pack and vanish firms, i.e. companies that wipe off your resources, pack their business and simply vanish leaving a big hole in your pocket.
We all receive those flowery once in lifetime offers claiming to change the course of life with all the financial gains we can get through them. Remember they are out there for business. They are not going to pay out of their pockets so obviously they cannot live up to their tall claims. Think wise and smart. It is good to invest in small time lesser-known ventures but at the same time it is better to be safe. After all prevention is better than cure.
By: Joseph Kenny
It is important to check the credentials of a credit card company before signing up for any offer since a number of fraudulent credit card companies have also sprung up along with the equal numbers of genuine ones. There is never a credit card offer that is perfect. Each has its pros and cons. Normally, if it sounds too good to be true, then it is a sure sign of being a credit card offer for someone with an adverse credit history. Offers like these can simply rip off your pocket and leave you with peanuts. They make tall claims to lure customers but if you read between the lines there is always a trap clause that takes the air out of the claim.
However, desperate requirement you might have of a credit do not fall into the trap of these jazzy claims. They might claim to give you low APR and high credit limit even with your bad credit history. Now this is obviously unbelievable. More unbelievable means more unreliable.
Then there could be credit card offers that are ridiculously unreasonable. For example, they may have a worthless balance transfer offer with amount limited to a level of say £500. Or there could be store cards through which you can shop only at a particular shop and that too only from a particular catalogue.
These credit card offers are responsible for maximum credit card frauds or losses to customers due to unprecedented high costs. These are mostly wipe, pack and vanish firms, i.e. companies that wipe off your resources, pack their business and simply vanish leaving a big hole in your pocket.
We all receive those flowery once in lifetime offers claiming to change the course of life with all the financial gains we can get through them. Remember they are out there for business. They are not going to pay out of their pockets so obviously they cannot live up to their tall claims. Think wise and smart. It is good to invest in small time lesser-known ventures but at the same time it is better to be safe. After all prevention is better than cure.
By: Joseph Kenny
Mar
11
It is always good to know what goes into your credit score as well as the relevance of each topic and how it relates to the final number. Factors for determining your credit score may include:
Payment History:
Overdue bills or late payments will definitely dent your credit rating.
Budget Management: Lenders always like to see indications that you are not living beyond your means. In general, non-mortgage credit payments each month should not exceed more than fifteen percent of your post-tax income.
Responsibility and Income Stability:
Creditors and lenders also love to see that you have been a resident at one address and at one job for extended periods of time (usually two years). They consider it as a sign of financial responsibility and a stable income.
Re-Aging:
Via re-aging, your credit history is rewritten, giving you a fresh start on that particular account. This can dramatically improve your credit score, although it may not be a complete wiping of the black board but still a great second chance. In the year 2000, the Federal Financial Institutions Examination Council (FFIEC) clarified guidelines on re-aging accounts for delinquent borrowers.
Credit Cards: Although having too many credit cards can have an adverse effect on your credit score, closing these lines of credit may not improve your score as well. The credit rating formula looks at the difference between the amount of credit a person has and the amount being used. Closing one or more accounts will reduce your available credit, lowering your credit score. The formula also factors in the length of time the credit accounts have been open, so be aware of the age and amount of credit of each account you are closing.
Credit Inquiries: An inquiry is a notation on a credit history file. There are two kinds of notations:
“Soft” Credit Inquires:
A credit bureau may sell a person’s contact information to an advertiser purchasing a list of people with similar characteristics.
A creditor can check a person’s credit periodically.
A credit counseling agency, with the client’s permission, can obtain a client’s credit report with no adverse action.
“Hard” Credit Inquires:
When granted a permissible purpose by you-the borrower-such as extending credit, lenders can check your credit history. Hard inquiries from lenders directly affect the borrower’s credit score.
By: Daniel Cho
Payment History:
Overdue bills or late payments will definitely dent your credit rating.
Budget Management: Lenders always like to see indications that you are not living beyond your means. In general, non-mortgage credit payments each month should not exceed more than fifteen percent of your post-tax income.
Responsibility and Income Stability:
Creditors and lenders also love to see that you have been a resident at one address and at one job for extended periods of time (usually two years). They consider it as a sign of financial responsibility and a stable income.
Re-Aging:
Via re-aging, your credit history is rewritten, giving you a fresh start on that particular account. This can dramatically improve your credit score, although it may not be a complete wiping of the black board but still a great second chance. In the year 2000, the Federal Financial Institutions Examination Council (FFIEC) clarified guidelines on re-aging accounts for delinquent borrowers.
Credit Cards: Although having too many credit cards can have an adverse effect on your credit score, closing these lines of credit may not improve your score as well. The credit rating formula looks at the difference between the amount of credit a person has and the amount being used. Closing one or more accounts will reduce your available credit, lowering your credit score. The formula also factors in the length of time the credit accounts have been open, so be aware of the age and amount of credit of each account you are closing.
Credit Inquiries: An inquiry is a notation on a credit history file. There are two kinds of notations:
“Soft” Credit Inquires:
A credit bureau may sell a person’s contact information to an advertiser purchasing a list of people with similar characteristics.
A creditor can check a person’s credit periodically.
A credit counseling agency, with the client’s permission, can obtain a client’s credit report with no adverse action.
“Hard” Credit Inquires:
When granted a permissible purpose by you-the borrower-such as extending credit, lenders can check your credit history. Hard inquiries from lenders directly affect the borrower’s credit score.
By: Daniel Cho
Mar
9
Credit Reports and Histories
Filed Under Credit Report | Leave a Comment
Whenever a person applies for a loan of any sort – whether it is a mortgage, a personal loan, or even a credit card, their credit report is pulled and scrutinized. Everyone knows this. However, what isn’t as widely known is the mass amount of information available within these credit reports and histories.
There are three primary national credit bureaus in the United States. Each agency’s primary form of business is the reporting of credit information that will enable their clients to learn certain facts about a person or business’s credit history, which, in turn, allows their clients to make better overall business decisions. The “big 3” in the United States are:
Experian, formerly known as TRW – www.experian.com Equifax – www.equifax.com Trans Union – www.transunion.com So, what information is on a credit report? Is it just data that pertains to an individual or to a business’s finances? Or is other information noted there as well? In fact, there is a very large amount of data collected and displayed in a credit report. The following is the information that may be found, in part or in total, on a credit reporting history from Experian, Equifax, or Trans Union:
Their total credit score. The score is made up of three individual parts. One-third is based on the subject’s payment history, one-third is based on their debt/credit ratio, and the final third is a compilation of the length of their credit history, their types of credit, and the amount of their recent credit inquiries. Individual credit information. Credit history – including payments, lines of credit, secured loans, and any other type of debt the subject may have. The information here is detailed. The reports break down what the total amount of credit is per loan, what each balance is, as well as a detailed payment history. Settlements, tax liens, and other judgments. If the subject has any tax liens or judgments brought against them, they may be listed as part of the report. Also, any bad debt settlements reached will be reported. Bankruptcy. If bankruptcy is in the subject’s history, it will be noted, as well as if it was a Chapter Seven or a Chapter Thirteen bankruptcy. Also, if they are making payments to the creditors, it will show what their complete payment history is. Arrest and conviction data. Basic data that will show an arrest or conviction information along with dates of arrest, conviction, etc. Other legal information. Such as if the person or business has been sued by another individual or business, including the when and where. Fraud reports. If there are any possible instances of fraud in place, the credit report will detail which accounts are thought to be compromised. Address information. Shows the current as well as several past residences for the individual or business. Employment history. Where the individual is currently working as well as their past employers and dates of employment.
Basically, the consumer files from these national agencies are vast and often include far more than basic credit worthiness. Local and/or regional credit reporting agencies may have even more in-depth, and more detailed, data on individuals and businesses in their local area.
Also, it is smart to be aware of what information is on your own credit report. This is extremely important for a variety of reasons, but mainly, to be sure your report is accurate. Though, if you have suspicions that someone else is using your identifying information to steal from you, in other words – identity theft, checking your credit report is an excellent way of deducing if your suspicions are correct or not.
However, there is another reason to know what types of data lurk in a credit report. If you’re investigating a person or a business, having access to their credit report can often give you exactly the data you’re looking for, in addition to the obvious financial history. Because of this, and the risk associated with it, the Federal Credit Reporting Act (FCRA) has amendments in place to protect credit reports from being illegally retrieved.
To obtain a credit report on someone other than yourself, you must have a “legitimate business need,” as well as, in most cases, a signed release. Some of these legitimate business reasons may include:
Renting property, apartments, houses, etc. If you’re a landlord, retrieving credit information on possible tenants is within the parameters of the law as long as there is a signed release.Approving loans of any sort (from a mortgage to a credit card). This is fairly obvious. Any institution that loans money, in whatever form, has the legal right to request credit history information on their applicants. Employment verification. Many companies in the United States now have potential employees sign a credit report release as part of their pre-employment screening. This, along with general backgrounds checks, is quickly becoming the norm.Collection proceedings for bad debt. If an individual, or business, has not paid a debt back, the lending institution may begin collection proceedings with or without a collection agency. Credit reports are almost always used in these proceedings. Also, the FCRA mandates that procuring a credit report under false pretenses is a crime, which could lead to fines, jail time, and/or the relinquishment of a business license.
So, what do you do if you are in need of a credit report other than your own, and you do not fall into one of these prior categories? Well, unfortunately, to actually retrieve an official credit report – there’s not a whole lot you can do. Even online information brokers need to be extremely careful that the users of their databases have a legitimate business purpose – which means you’d probably have to verify this to utilize their services.
However, there are other potential alternatives at your disposal for retrieving the information you want. The following are some examples of steps you can take, and the places you can go, to get the financial as well as the additional background you’re after:
State or County Records – Every credit report is partially made up of information gathered from public records. Filings such as arrest and conviction records, tax liens, and bankruptcies can be retrieved from the correct locality in which the record is stored. These, most of the time, will be at the state or county level. Just check with the appropriate state to find out exactly where to go to retrieve the records you’re looking for. Also, online search agencies (information brokers) can also get this public record information for you through their public records databases.Dissemination of Information – Certain reporting agencies, such as Experian and Dunn & Bradstreet, can run a comprehensive credit check on businesses within their directory for their clients. This information is an overview of the specific information that is actually on the credit report and can give valuable data to branch off from. These condensed reports can offer data on tax liens, judgments, bankruptcies, business background reports, lawsuits, payment trend behavior, etc. Most of these types of reporting agencies offer a one time rate to retrieve the information you’re after. For consistent searches, they also offer a subscriber rate.Do Some Legwork – Check the appropriate locality’s register of deeds office to look into real-estate mortgage records, search the appropriate files at your local courthouse to investigate public record information, interview former coworkers, friends, and family members of the individual, etc. Be ready to talk to anyone you can and listen carefully. Write everything down and continue to connect the dots. While there is some information you’d find on a credit report you won’t discover in this fashion, you may find data that will lead you onto other avenues. If you spread your net wide enough, you should end up with a fairly accurate picture of the individual you’re investigating.Uniform Commercial Code Filings – The UCC allows a creditor to notify other creditors about a debtor’s assets that have been used as collateral for a secured transaction. The creditor does this by filing a public notice, or financing statement, with a particular filing office. You can search these filings by most states using online information brokers and other public record vendors. You can also do your own online search, if you’re motivated enough, by going to the appropriate state’s UCC database or by going to the state web site that offers free access to the UCC database. By doing a simple search online, you can find a plethora of information on UCC filings as well as possible information brokers to use, if you decide to go that route. While credit reports and histories give the needed financial information a company or individual requires to determine credit worthiness on another, these reports can also include other data that will give a greater view of the subject in question. However, even if you don’t have the legal right to retrieve the official credit report of an individual or a business; don’t give up on your investigation. Remember, there are other ways to get the information you require.
By: Terry Taggert
There are three primary national credit bureaus in the United States. Each agency’s primary form of business is the reporting of credit information that will enable their clients to learn certain facts about a person or business’s credit history, which, in turn, allows their clients to make better overall business decisions. The “big 3” in the United States are:
Experian, formerly known as TRW – www.experian.com Equifax – www.equifax.com Trans Union – www.transunion.com So, what information is on a credit report? Is it just data that pertains to an individual or to a business’s finances? Or is other information noted there as well? In fact, there is a very large amount of data collected and displayed in a credit report. The following is the information that may be found, in part or in total, on a credit reporting history from Experian, Equifax, or Trans Union:
Their total credit score. The score is made up of three individual parts. One-third is based on the subject’s payment history, one-third is based on their debt/credit ratio, and the final third is a compilation of the length of their credit history, their types of credit, and the amount of their recent credit inquiries. Individual credit information. Credit history – including payments, lines of credit, secured loans, and any other type of debt the subject may have. The information here is detailed. The reports break down what the total amount of credit is per loan, what each balance is, as well as a detailed payment history. Settlements, tax liens, and other judgments. If the subject has any tax liens or judgments brought against them, they may be listed as part of the report. Also, any bad debt settlements reached will be reported. Bankruptcy. If bankruptcy is in the subject’s history, it will be noted, as well as if it was a Chapter Seven or a Chapter Thirteen bankruptcy. Also, if they are making payments to the creditors, it will show what their complete payment history is. Arrest and conviction data. Basic data that will show an arrest or conviction information along with dates of arrest, conviction, etc. Other legal information. Such as if the person or business has been sued by another individual or business, including the when and where. Fraud reports. If there are any possible instances of fraud in place, the credit report will detail which accounts are thought to be compromised. Address information. Shows the current as well as several past residences for the individual or business. Employment history. Where the individual is currently working as well as their past employers and dates of employment.
Basically, the consumer files from these national agencies are vast and often include far more than basic credit worthiness. Local and/or regional credit reporting agencies may have even more in-depth, and more detailed, data on individuals and businesses in their local area.
Also, it is smart to be aware of what information is on your own credit report. This is extremely important for a variety of reasons, but mainly, to be sure your report is accurate. Though, if you have suspicions that someone else is using your identifying information to steal from you, in other words – identity theft, checking your credit report is an excellent way of deducing if your suspicions are correct or not.
However, there is another reason to know what types of data lurk in a credit report. If you’re investigating a person or a business, having access to their credit report can often give you exactly the data you’re looking for, in addition to the obvious financial history. Because of this, and the risk associated with it, the Federal Credit Reporting Act (FCRA) has amendments in place to protect credit reports from being illegally retrieved.
To obtain a credit report on someone other than yourself, you must have a “legitimate business need,” as well as, in most cases, a signed release. Some of these legitimate business reasons may include:
Renting property, apartments, houses, etc. If you’re a landlord, retrieving credit information on possible tenants is within the parameters of the law as long as there is a signed release.Approving loans of any sort (from a mortgage to a credit card). This is fairly obvious. Any institution that loans money, in whatever form, has the legal right to request credit history information on their applicants. Employment verification. Many companies in the United States now have potential employees sign a credit report release as part of their pre-employment screening. This, along with general backgrounds checks, is quickly becoming the norm.Collection proceedings for bad debt. If an individual, or business, has not paid a debt back, the lending institution may begin collection proceedings with or without a collection agency. Credit reports are almost always used in these proceedings. Also, the FCRA mandates that procuring a credit report under false pretenses is a crime, which could lead to fines, jail time, and/or the relinquishment of a business license.
So, what do you do if you are in need of a credit report other than your own, and you do not fall into one of these prior categories? Well, unfortunately, to actually retrieve an official credit report – there’s not a whole lot you can do. Even online information brokers need to be extremely careful that the users of their databases have a legitimate business purpose – which means you’d probably have to verify this to utilize their services.
However, there are other potential alternatives at your disposal for retrieving the information you want. The following are some examples of steps you can take, and the places you can go, to get the financial as well as the additional background you’re after:
State or County Records – Every credit report is partially made up of information gathered from public records. Filings such as arrest and conviction records, tax liens, and bankruptcies can be retrieved from the correct locality in which the record is stored. These, most of the time, will be at the state or county level. Just check with the appropriate state to find out exactly where to go to retrieve the records you’re looking for. Also, online search agencies (information brokers) can also get this public record information for you through their public records databases.Dissemination of Information – Certain reporting agencies, such as Experian and Dunn & Bradstreet, can run a comprehensive credit check on businesses within their directory for their clients. This information is an overview of the specific information that is actually on the credit report and can give valuable data to branch off from. These condensed reports can offer data on tax liens, judgments, bankruptcies, business background reports, lawsuits, payment trend behavior, etc. Most of these types of reporting agencies offer a one time rate to retrieve the information you’re after. For consistent searches, they also offer a subscriber rate.Do Some Legwork – Check the appropriate locality’s register of deeds office to look into real-estate mortgage records, search the appropriate files at your local courthouse to investigate public record information, interview former coworkers, friends, and family members of the individual, etc. Be ready to talk to anyone you can and listen carefully. Write everything down and continue to connect the dots. While there is some information you’d find on a credit report you won’t discover in this fashion, you may find data that will lead you onto other avenues. If you spread your net wide enough, you should end up with a fairly accurate picture of the individual you’re investigating.Uniform Commercial Code Filings – The UCC allows a creditor to notify other creditors about a debtor’s assets that have been used as collateral for a secured transaction. The creditor does this by filing a public notice, or financing statement, with a particular filing office. You can search these filings by most states using online information brokers and other public record vendors. You can also do your own online search, if you’re motivated enough, by going to the appropriate state’s UCC database or by going to the state web site that offers free access to the UCC database. By doing a simple search online, you can find a plethora of information on UCC filings as well as possible information brokers to use, if you decide to go that route. While credit reports and histories give the needed financial information a company or individual requires to determine credit worthiness on another, these reports can also include other data that will give a greater view of the subject in question. However, even if you don’t have the legal right to retrieve the official credit report of an individual or a business; don’t give up on your investigation. Remember, there are other ways to get the information you require.
By: Terry Taggert
Mar
9
Does Credit History Follow You Upon Relocation From The United States To Canada?
Filed Under Credit History | Leave a Comment
We recently received a very good question from a foreign exchange student who is moving out of the country. He asked if the credit established in the U.S follows a person, in this case to Canada. Here is what we found through our research.
SSN vs. SIN
In the United States, individuals are identified by their social security number (SSN). There is no other person in the United States with an identical SSN. In Canada, people have social insurance numbers (SIN), which serves the same purpose. Credit bureaus in Canada use the SIN to keep track of individual’s credit reports. Since the U.S and Canada are two different countries, SSN’s cannot be tracked in the Canadian systems and SIN’s cannot be tracked in the U.S systems.
Credit Bureaus
In the United States, there are three major credit bureaus: Experian, TransUnion and Equifax. These three bureaus provide credit reports and scores for all individuals with a social security number who have opened a line of credit or a loan. Canada’s credit bureaus follow the same procedures.
In Canada, the three major credit bureaus are Equifax Canada, TransUnion Canada and Northern Credit Bureaus, Inc. In several scenarios, people have found that the United States TransUnion and the Canada TransUnion share the same data in their systems. In result, there may be a possibility of a Canadian financial institution pulling your U.S credit history. This could be good for people with positive credit and bad for those with not so good credit. Equifax may do the same and share their data between countries. We have found that Experian has no effect in foreign credit because it only conducts reports on U.S residents. The same applies for Northern Credit Bureaus and its Canadian residents.
Credit Scores
As far as credit scores go, TransUnion Canada and Equifax Canada have both implemented the FICO system from the United States. The only difference being is credit scores in Canada range between a score of 300 and 900. Scores in the United States use a scale of 300-850.
Scores closer to 900 are a lower risk for the lenders, which could mean a lower interest rate to the borrower. The opposite can be said for scores closer to 300. These scores would be a much higher risk for the lender and in result would mean a higher interest rate for the borrower.
If I do not have an SIN and am a American citizen, how do I apply for credit if I move to Canada?
Just like in the U.S, in Canada it is hard to obtain credit without a credit history. You can walk inside a Canadian bank and explain your situation to them. Some banks in Canada will ask for some information from your U.S credit report. This will enable them to make an easier and quicker decision to issue credit. Some may offer you a secured credit card which will help you build a credit history by depositing a certain amount on a pre-paid credit card and then make payments.
Also, as stated above, TransUnion may have the ability to display U.S credit report information to Canadian financial institutions because of shared data between TransUnion Canada and the United States TransUnion.
What if I want to move to Canada for an extended period of time and then move back to the United States?
If you are not planning on being a long term resident or are not planning on buying a home, it may be best to stick with United States based international credit cards. Credit card companies with affiliates in the U.S and Canada would work best. These cards will work in both countries but will only report to the U.S credit bureaus.
Here is an excerpt from the U.S Department of State: “If you will be abroad for an extended period, you may want to arrange for the delivery of your mail. Some banks and international credit card companies handle mail for customers at their overseas branches. In addition, post offices in many countries will hold mail for travelers under their General Delivery (Poste Restante) services. U.S. Embassies and Consulates do not handle private mail. Check with the embassy of your destination country to see if that will be possible there. A listing of foreign embassies and consulates in the U.S. is available at http://www.state.gov/s/cpr/rls/dpl/32122.htm. “
A safe bet is that if you owe on a debt in the U.S and move out of the country, you will owe on that debt upon your return, as it will be recorded on your credit report. Will creditors try to collect from you in another country? Well that is the golden question. The golden response is, they may have a right to collect. Will that new country consider your U.S credit history? It may.
Regardless of where you move, it is best to maintain a positive credit history. If your new country of residence chooses to look at your U.S credit history you want to make sure it is clear of negative information. However, one cannot assume that a positive U.S credit history will help establish new credit in another country.
By: Pete Glocker
SSN vs. SIN
In the United States, individuals are identified by their social security number (SSN). There is no other person in the United States with an identical SSN. In Canada, people have social insurance numbers (SIN), which serves the same purpose. Credit bureaus in Canada use the SIN to keep track of individual’s credit reports. Since the U.S and Canada are two different countries, SSN’s cannot be tracked in the Canadian systems and SIN’s cannot be tracked in the U.S systems.
Credit Bureaus
In the United States, there are three major credit bureaus: Experian, TransUnion and Equifax. These three bureaus provide credit reports and scores for all individuals with a social security number who have opened a line of credit or a loan. Canada’s credit bureaus follow the same procedures.
In Canada, the three major credit bureaus are Equifax Canada, TransUnion Canada and Northern Credit Bureaus, Inc. In several scenarios, people have found that the United States TransUnion and the Canada TransUnion share the same data in their systems. In result, there may be a possibility of a Canadian financial institution pulling your U.S credit history. This could be good for people with positive credit and bad for those with not so good credit. Equifax may do the same and share their data between countries. We have found that Experian has no effect in foreign credit because it only conducts reports on U.S residents. The same applies for Northern Credit Bureaus and its Canadian residents.
Credit Scores
As far as credit scores go, TransUnion Canada and Equifax Canada have both implemented the FICO system from the United States. The only difference being is credit scores in Canada range between a score of 300 and 900. Scores in the United States use a scale of 300-850.
Scores closer to 900 are a lower risk for the lenders, which could mean a lower interest rate to the borrower. The opposite can be said for scores closer to 300. These scores would be a much higher risk for the lender and in result would mean a higher interest rate for the borrower.
If I do not have an SIN and am a American citizen, how do I apply for credit if I move to Canada?
Just like in the U.S, in Canada it is hard to obtain credit without a credit history. You can walk inside a Canadian bank and explain your situation to them. Some banks in Canada will ask for some information from your U.S credit report. This will enable them to make an easier and quicker decision to issue credit. Some may offer you a secured credit card which will help you build a credit history by depositing a certain amount on a pre-paid credit card and then make payments.
Also, as stated above, TransUnion may have the ability to display U.S credit report information to Canadian financial institutions because of shared data between TransUnion Canada and the United States TransUnion.
What if I want to move to Canada for an extended period of time and then move back to the United States?
If you are not planning on being a long term resident or are not planning on buying a home, it may be best to stick with United States based international credit cards. Credit card companies with affiliates in the U.S and Canada would work best. These cards will work in both countries but will only report to the U.S credit bureaus.
Here is an excerpt from the U.S Department of State: “If you will be abroad for an extended period, you may want to arrange for the delivery of your mail. Some banks and international credit card companies handle mail for customers at their overseas branches. In addition, post offices in many countries will hold mail for travelers under their General Delivery (Poste Restante) services. U.S. Embassies and Consulates do not handle private mail. Check with the embassy of your destination country to see if that will be possible there. A listing of foreign embassies and consulates in the U.S. is available at http://www.state.gov/s/cpr/rls/dpl/32122.htm. “
A safe bet is that if you owe on a debt in the U.S and move out of the country, you will owe on that debt upon your return, as it will be recorded on your credit report. Will creditors try to collect from you in another country? Well that is the golden question. The golden response is, they may have a right to collect. Will that new country consider your U.S credit history? It may.
Regardless of where you move, it is best to maintain a positive credit history. If your new country of residence chooses to look at your U.S credit history you want to make sure it is clear of negative information. However, one cannot assume that a positive U.S credit history will help establish new credit in another country.
By: Pete Glocker
Mar
6
Your credit score/FICO report can determine your eligibility for loans, what interest rate you pay for loans, and even whether you get a job to which you are applying. With every incentive to improve your score and nothing to lose, it should be a priority step in getting your financial life on track.
Here are 5 steps to improve your credit score.
Tip #1: Pull your report for free: The first step in fixing your credit is to get a handle on your current score. The Federal Trade Commission has an agreement with the Big Three credit reporting agencies to provide every U.S. citizen with a free credit report every 12 months. To get your free copy, go to the official Annual Credit Report Request Service Web site and follow instructions for requesting your report.
Tip #2: Pay your bills on time: A full 35% of your FICO score is determined by how timely you pay your bills. If you have missed any payments in the past few years, it will likely help your score significantly to go back and fix your past-due status with the creditors involved. By paying your overdue bill, your creditors will remove these glitches from your report from each reporting agency. Hint: go back and pull your report again later to make sure that all three of the agencies have actually removed the problem from your records as promised.
Tip #3: Get the balance (of credit types) right: 10% of your credit score reflects the specific diversity of types of debt you have and the credit lines you have available to you. Make sure you have the right balance of auto or home loan, department store cards, charge cards, and credit cards. This healthy mix shows potential creditors that you know how to handle different types of debt.
Tip #4: Reduce your debt: Your debt-to-credit ratio is the ratio of the amount you owe versus the amount of credit extended to you. It determines a full 30% of your credit score. There are three ways to reduce your debt: 1. Make more money; 2. Put more of your current income toward paying off your debt; 3. Reduce the cost of your debt. One great way to reduce the cost of your debt is to transfer your current credit card balances to credit cards with lower interest rates. Doing this can save you $100s per month in debt payments if you have large credit card balances.
Tip #5: Open more lines of credit: You can also improve your debt-to-credit ratio by actually increasing the amount of credit extended to you. The key here is to do so while avoiding actually using these new credit cards. To avoid using the cards extensively, make a purchase or two with them each month and then hide them so they are not readily accessible. Also: if you do open more lines of credit, do so over a period of a few months since having too much new credit can actually hurt your score.
There are many straightforward ways to improve your credit score. So, pull your free report, assess your situation, and start taking steps toward a healthier financial life.
By: Jed C. Jones Ph.D.
Here are 5 steps to improve your credit score.
Tip #1: Pull your report for free: The first step in fixing your credit is to get a handle on your current score. The Federal Trade Commission has an agreement with the Big Three credit reporting agencies to provide every U.S. citizen with a free credit report every 12 months. To get your free copy, go to the official Annual Credit Report Request Service Web site and follow instructions for requesting your report.
Tip #2: Pay your bills on time: A full 35% of your FICO score is determined by how timely you pay your bills. If you have missed any payments in the past few years, it will likely help your score significantly to go back and fix your past-due status with the creditors involved. By paying your overdue bill, your creditors will remove these glitches from your report from each reporting agency. Hint: go back and pull your report again later to make sure that all three of the agencies have actually removed the problem from your records as promised.
Tip #3: Get the balance (of credit types) right: 10% of your credit score reflects the specific diversity of types of debt you have and the credit lines you have available to you. Make sure you have the right balance of auto or home loan, department store cards, charge cards, and credit cards. This healthy mix shows potential creditors that you know how to handle different types of debt.
Tip #4: Reduce your debt: Your debt-to-credit ratio is the ratio of the amount you owe versus the amount of credit extended to you. It determines a full 30% of your credit score. There are three ways to reduce your debt: 1. Make more money; 2. Put more of your current income toward paying off your debt; 3. Reduce the cost of your debt. One great way to reduce the cost of your debt is to transfer your current credit card balances to credit cards with lower interest rates. Doing this can save you $100s per month in debt payments if you have large credit card balances.
Tip #5: Open more lines of credit: You can also improve your debt-to-credit ratio by actually increasing the amount of credit extended to you. The key here is to do so while avoiding actually using these new credit cards. To avoid using the cards extensively, make a purchase or two with them each month and then hide them so they are not readily accessible. Also: if you do open more lines of credit, do so over a period of a few months since having too much new credit can actually hurt your score.
There are many straightforward ways to improve your credit score. So, pull your free report, assess your situation, and start taking steps toward a healthier financial life.
By: Jed C. Jones Ph.D.