Tag Archives for " credit report "

Disputing Credit Report

“Sometimes, it’s not easy disputing a credit report. Read these tips, as they are sure to help. Check them out now!”

Ways on Disputing Credit Report

Checking the accuracy of your credit report is important, given recent reports that 5 percent of consumers may have errors in their reports that can result in higher interest rates on a loan.

The National Foundation for Credit Counseling has developed a list of “do’s” and “don’ts” for managing your report, which tracks your individual borrowing history. The major credit bureaus — Experian, TransUnion and Equifax — use information in the reports to create a credit score, which lenders use to decide if you are a good candidate for a loan and what interest rate you qualify for. Scores can also be used to determine eligibility for other financial products, like insurance.

Here’s the foundation’s list:

Review your report for accuracy at AnnualCreditReport.com. You’re entitled by law to one free report from each of the three major bureaus every 12 months, so you can check a different one every four months. Despite the availability of free reports, few consumers check them, the foundation says. Reviewing your report at least three months before a major financial move gives you time to dispute any errors and have them corrected.

Understand your rights. The federal Fair Credit Reporting Act provides protections for the accuracy and privacy of information in your credit file. The credit bureaus have dispute resolution processes in place. But it is up to the consumer to initiate the process by submitting the dispute form, either online or by phone.

Tara Siegel Bernard, writing for The Times, found that it’s better to submit a dispute in writing, to create a paper trail in case you need it later and to submit disputes to all three bureaus.

Credit reporting companies are required to investigate the items in question, usually within 30 to 45 days of the dispute being filed. The bureau receiving the dispute must forward all relevant information to the source of the information to begin the investigation process. After the provider’s investigation is complete, the results are sent back to the bureau. If the information provider finds the disputed information to be inaccurate, it must notify all three credit reporting companies, allowing each of them to correct the information in their files.

Not all errors have an equal impact. Some mistakes are more serious because they may have a negative impact on your credit score, like accounts that don’t belong to you, or credit lines listed with lower limits than they actually have or negative information that has stayed on the report longer than allowed. Those sorts of errors should be addressed immediately. More at Tips for Disputing Credit Report Errors

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How to Increase Credit Score

“Looking for ways on how to increase credit score? Let this article help. Read it now!”

How to Increase Credit Score

Most New Year’s resolutions require consumers to spend money, but here’s one that actually doesn’t cost anything and ultimately helps people save: Boost your credit score.

Low credit scores result in higher interest charges for all types of debt, including credit cards and home loans. Borrowers with a FICO credit score (the score used for most consumer lending decisions) of 700 save an average of $648 in interest on their credit card, $1,392 on their car loan and $2,340 on their mortgage each year, compared with borrowers who have scores below 620, according to a study by CardHub.com , a credit-card comparison website. Those savings get even larger for borrowers whose credit score is above 700. Separately, lower scores can lead to larger home and car insurance bills and make it harder to rent or buy a home.

Fortunately, there are ways to improve a low credit score and most involve scaling back on credit-card usage. That’s because in the world of credit scores, all debt is not treated equally. FICO scores tend to drop as consumers rack up more credit-card debt but don’t decline as much if someone signs up for a student loan, car loan or mortgage. Here are five steps to improving your credit score.

Pay down credit-card debt
To improve their credit scores, borrowers need to lessen their credit-card debt.

Once a borrower surpasses a 10% “credit utilization ratio” — that is, the amount of their credit card debt in relation to their total spending limit — their FICO score will likely drop, says John Ulzheimer, consumer credit expert with CreditSesame.com, a credit-management site, and a former manager at FICO. For instance, borrowers whose credit-card spending limits total $10,000 should not surpass $1,000 in debt — whether or not they pay off their balance in full each month.

That can be an onerous task for many borrowers. They’ll need to adhere to stricter limits if they want the highest score possible. According to FICO, borrowers with the best credit scores — of 785 or greater — use an average of 7% of their total credit-card limit. In contrast, student loans, car loans and mortgages are not considered by the credit-utilization ratio.

Consumers can consider asking their card issuers to increase their credit-card limits, which could in turn increase their credit score. Of course, that will require not swiping for more purchases on those cards.

Convert credit-card debt to personal loans
Borrowers with a lot of credit-card debt aren’t out of luck. They can actually improve their score before they even pay down their debt — with a bit of strategizing: They can consider rolling their credit-card debt into a personal loan.

Here’s why: Credit-card debt tends to be more damaging to credit scores than a personal loan, which is considered installment debt. The credit-utilization ratio (see previous section) does not take installment debt into account. This strategy would result in zero dollars of credit-card debt on the borrower’s credit report, which could boost their score by 100 points or more, says Ulzheimer. They’ll also pay lower rates to boot: The rates on personal loans currently average 11.36%, according to Bankrate.com. In contrast, rates on credit cards average just over 13% to 15.4%.

This strategy will only help borrowers if they stop using their credit cards or if they pay off the charges they make on their card quickly. Otherwise, their score won’t stay up for very long. Of course, consumers should pay off all their credit-card debt with their savings rather than signing up for a loan. But that assumes they have enough cash set aside after paying this debt for their emergency fund. (Financial advisers typically recommend people have savings equal to six to eight months of living expenses in a savings account.) More at 5 ways to boost your credit score

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What is a Credit Bureau

“What is a Credit Bureau? Most of us are still wondering what it does and why it’s important. Let this article help. Read more now!”

Credit Bureau Definition

Credit Bureau

A credit bureau is an organization that tracks the credit histories and related information of individuals. Whenever someone applies for credit, housing, employment, or anything else that their credit history could have an impact on, their potential creditor, landlord, or employer can check the information on file. If the bureau shows less-than-satisfactory information in its report on the person, it may affect the person’s chances of receiving the credit, lease, or job. A poor credit report can also result in higher interest rates on a loan or credit card.

There are three major US credit reporting agencies: Equifax, Experian, and TransUnion. Although the three companies share information, each maintains its own report and credit score on each individual. When someone applies for a line of credit, housing, or employment, the creditor or employer may look at the report and score from all three. For this reason, if an individual is monitoring his or her credit report for fraud or false information, it is a good idea to request a copy of the report from each agency.

A credit bureau gets the information for their reports from the individuals’ creditors. For example, if someone has a line of credit with his bank, that bank will report information regularly to the credit agency — good or bad. If the individual is always on time with payments, that fact will show on the credit report; however, if the individual has been more than 30 days late on one or more payments, the report is sure to reveal that, as well.

A variety of information gets reported to each agency. They all have personal information for each person who has gotten credit or opened a bank account on file, including their name, date of birth, Social Security number, current and previous addresses, and employment history. All of this information is collected by tracking people via creditor reports and Social Security numbers.

Account information is listed on the report, including the business handling the account, the date the account was opened, the credit line limit, the current balance, and the payment history. Even if an individual closes an account or the account becomes inactive, the report will still show this information for seven to 11 years. The accounts that each bureau includes on a credit report can be anything that is credit related, such as checking and savings accounts, credit cards, loans, and leases.

Each agency also reports any inquiries made into a person’s credit report. The report will show the type of inquiry and who made it. If too many inquiries are made within a certain period of time, the person’s credit rating can be negatively affected.

A credit bureau also includes public records on an individual’s credit report, if they are deemed related to a person’s credit worthiness. For example, if a person has declared bankruptcy, he or she will not be considered reliable, and companies may be hesitant to give him or her a line of credit. Bankruptcies are included on credit reports as a result. Even unpaid child support is considered to pertain to an individual’s dependability. This sort of information typically remains on a credit report for seven years. More at What is a Credit Bureau?

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