Thursday, December 20, 2007

Stop, ID thief! 5 tips to protect against fraud


Chances are you just finished dropping a boatload of money on holiday gifts. You probably paid for the bulk of your purchases with a debit or credit card, particularly if you did any of your shopping online. But what did you do to protect yourself against identity theft?

Probably not much - most people rarely, if ever, look over their shoulder before handing over their credit card. Some don't even bother to double-check that a Web site is secure before typing in the digits. But with an estimated 10 million cases of identity theft each year, paying close attention to your personal information is one of the only ways of keeping your personal information, and your money, safe.

The others? Well, there are micro shredders, which I've touted in this space before. There are credit-monitoring services, which may cost more than you feel like spending with the holiday bills rolling in. Also, critics argue that they may not be all that effective either, since they're somewhat akin to a fire alarm - it can alert you to a bad situation, but often just a bit too late.

The best solution we have is probably the security freeze, recently made available nationwide by all three credit bureaus. It's basically a padlock for your credit report and perhaps the best way to keep from becoming a victim.

"A credit freeze is an order to the three credit bureaus - TransUnion, Experian and Equifax - that you do not want them selling your personal information to any third party. What this does is make your credit report unavailable to banks, credit card companies, utility and cell phone companies - anyone who might want to look at your credit report before issuing credit," explains Scott Mitic, CEO and co-founder of TrustedID, an identity-theft protection service. If lenders can't see your credit report, they can't issue a thief credit in your name.

The downside, of course, is that unless you lift the freeze, you can't get credit either. So is it worth the hassle? Here, a primer on security freezes and other ways to keep your identity to yourself.

Weigh the cost
The fee for a security freeze is going to vary by state, but $10 per bureau seems to be the norm. (Unless you've already been a victim of ID theft - then it's free.)

You'll want to put a freeze on your file at each of the three credit bureaus, because contacting just one is akin to locking the front door of your house, then leaving the back and side doors wide open. So now we're at about $30. If you have to lift the freeze because you need a new car or want to apply for a mortgage, it's another $10 a pop. Deciding whether it's worth the $60 bucks (more if you have to repeat the process) is really a matter of looking to the future. If you're happy with your house and car, and don't foresee a need for any additional credit cards or loans in the next several years, it may be worth it to place the freeze.

(Note: If you don't want to deal with it yourself, or see yourself freezing and unfreezing multiple times, a service like Mitic's, which is $109.95 for a year, may be cost effective.) But if your situation is at all in limbo - say you've just graduated from college, for example, and may be shopping for a home soon - you're probably better off fighting the identity-theft battle another way.

Know yourself
I have to admit, I kind of like credit freezes for another reason: They force you to stop and think before spending money you don't have. It can take a few days for the freeze on your credit report to lift, which is long enough for you to decide you don't really need that department store credit card after all. But if you're not the kind of person who plans in advance, you may find yourself in a sticky situation if you forget to lift the freeze and need access to credit immediately.

Consider a fraud flag instead
It's basically a note, attached to your credit report by all three bureaus, requesting that lenders contact you by phone before issuing credit in your name. One plus to a fraud flag over a freeze is that it's free. It's also a lot easier to manage than a freeze, but it may not be quite as effective.

"It's not foolproof," says Mitic. "It's not as safe or as guaranteed as a freeze because you're counting on tens of thousands of different lenders to correctly see this note, correctly call you and correctly verify your identity." Still, lenders are by law required to read and respond to a fraud flag, so it's definitely worth a try.

Arm your computer
Updated anti-spyware and anti-virus software is always worth the investment. For about $30, you'll protect yourself against programs that can worm into your computer, scan the hard drive for your personal information, and then send the findings into the waiting hands of thieves.

Pay attention
If you can't stop an identity theft - and all the protections in the world may not be enough, frankly - you can at least catch it early on. The crime generally comes with one or two red flags.

"If you start to get bills from people or companies you've never heard of, it's a strong sign that someone is impersonating you," says Gail Hillebrand, a senior attorney with Consumer's Union. She also advises going over your credit card and bank statements with a fine-tooth comb for any suspicious charges, something that is particularly important at this time of year, when we've spent more money than usual at places we may not normally shop. Any charges you don't recognize, no matter how small, should be disputed with the bank or credit card company.

With reporting by Arielle McGowen, - The Today Show.

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Friday, December 14, 2007

What to do when your ID's been stolen?

Step 1: Protect your finances
Contact the fraud departments of each of the three major credit bureaus.

Get a copy of your credit report, which is free to ID theft victims. Ask that your file be flagged with a "fraud alert tag" and a "victim's statement." That will limit the thief's ability to open new credit accounts, as new creditors will call you before granting credit, generally. Insist, in writing, that the fraud alert remain in place for seven years, the maximum, according to

Step 2: File a police report
You will need a police report to dispute unauthorized charges and for any insurance claims. Be persistent; your local police department may suggest that this isn't necessary, because they don't want the paperwork hassle. Also, fill out an online ID Theft complaint with the Federal Trade Commission or call 1-877-ID-THEFT.

That enters your case in the FTC's "Consumer Sentinel" database, a nationwide list of ID theft cases which can be used by law enforcement officers to find patterns and catch criminals.

Step 3: Close all compromised accounts
The list may be wider than you realize. This includes accounts with banks, credit card companies and other lenders, and phone companies, utilities, ISPs, and other service providers. Dispute all unauthorized charges - The FTC offers a sample dispute letter on its Web site. Disputes may require a sworn statement and a police report. The FTC also offers a form affidavit which can be used for the sworn statement at .

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Monday, November 19, 2007

Helpful Tips to increase your Credit Score!?!

Pay off debt rather than moving it around. Since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score. In other words, say you owe a total of $2,000 on four credit cards, each of which has a $2,000 limit. Your total credit limit is $8,000, of which your total balance ($2,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $4,000, and your $2,000 balance now accounts for 50 percent of that limit.


Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score since you don't have a proven track record, said Jan Davis, an executive vice president at TransUnion. What's more, a new account will lower the average age of your accounts, another factor in your FICO score.

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Tuesday, November 6, 2007

What elements are the most important factors of a credit history?

The list below details the approximate value of each aspect of your credit report that is used to generate a credit score. These percentages should only be used as a guide:

  • 35% - your payment history
  • 30% - total amount owed
  • 15% - length of credit history
  • 10% - types of credit used
  • 10% - new credit
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Tuesday, October 16, 2007


Tens of thousands of consumers fall victim each month to schemes like phishing

WASHINGTON, DC, October 16, 2007— The Identity Theft Assistance Center (ITAC) urges consumers to be careful when sharing personal information, and access to your financial accounts, that can be used to commit fraud and identity theft. “Fraudsters have plenty of tactics in their bag of tricks to make you believe they are acting in your best interests,” said ITAC Executive Director Anne Wallace. “Everyone should have a healthy dose of skepticism when it comes to responding to urgent requests for personal information or access to your financial accounts.”

Wallace urges consumers to be aware of several of the most common scams:

Phishing attacks use 'spoofed' e-mails to lead consumers to counterfeit websites designed to trick them into divulging financial data—such as credit card numbers, account usernames, passwords and social security numbers. Criminals use the names and logos of financial services companies to create authentic looking emails. “If you have any doubt about an email’s authenticity, contact your financial services company,” says Wallace.

Pretexting. Pretexting is the practice of getting your personal information under false pretenses. Pretexters sell your information to people who may use it to get credit in your name, steal your assets, or to investigate or sue you. A pretexter may call you posing as a representative of a survey firm, bank, Internet service provider, and even government agency, to get you to reveal your SSN, mother’s maiden name, drivers license number, financial account numbers and other identifying information. “The companies you do business with already have this information,” says Wallace.

Fake Checks. These schemes often involve the promise of great riches—such as foreign business offers and lotteries and sweepstakes. But it also includes work-at-home offers, where they ask you to help process payments by depositing checks or money orders intended for their company into your bank account. You send them the money and you keep the extra as your "pay.” “There’s absolutely no reason someone would give you a check or money order and ask you to wire money in return,” says Wallace. For more information, see

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Monday, October 1, 2007

Did You Know?

Credit scores are based solely on credit history and don't include in the calculation factos like race, religion, national origin, gender, age, education level or marital status.

For more info and to order your credit report with FREE credit score please visit

Thursday, September 27, 2007

The Key Factors that Determine Your Credit Score

  1. Paying your Bills
    The most important factor is how you’ve paid your bills in the past, placing the most emphasis on recent activity. Paying all your bills on time is good, paying them late on a steady basis is bad. Having accounts that were sent to collections is worse. Declaring bankruptcy is worst.
  1. Amount of money you owe and the amount of available credit
    The second most important area is your outstanding debt which means how much money you owe on credit cards, car loans, mortgages, home equity lines, etc. Also considered is the amount of credit you have available. If you hold possession of 15 credit cards that have a $10,000 credit limit, that’s $150,000 of available credit. People who have a lot of credit available tend to use it, which makes them a less attractive credit risk.
  1. Length of credit risk
    The third of factor is the length of your credit history. The longer you’ve had credit, the more points you get.
  1. Mix of credit
    The best scores will have a mix of both revolving credit, such as credit cards, and installment credits such as mortgages and car loans.
  1. New credit applications
    The final category is your interest in new credit, how many credit applications you’re filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping hurts your score, is when you have previous recent credit stumbles, such as late payments or bills sent to collections
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Tuesday, September 11, 2007

Credit Related Facts and Figures

  • 79% of all credit reports contain mistakes
  • 54% of all credit reports contain personal information that is long outdated, belongs to a stranger, or is otherwise incorrect
  • 30% of all credit reports contain accounts that are closed by the consumer but continue to be reported as open
  • 25% of all credit reports contain errors serious enough to result in the outright denial of credit
Source: Crednology, Inc - The necessity for fair and accurate credit reporting from the three major credit reporting agencies: Equifax, Transunion, and Experian.- 24/7 Online Access

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Three Easy Steps To A Happy Credit Report

Maintaining a Healthy Status
During the moving process it’s very convenient to use credit for everything from your home loan to your furniture financing to those fluffy new towels. While you’re busy filling out application after application, inquiries are being added to your credit history! Too many inquiries can lower your credit score and prevent you from obtaining future credit at the best rates possible.

By following these three simple steps, both you and your credit report can emerge from the moving process in a healthy state:

Watch out for department store credit card offers
Department stores love to promote their store cards. Oftentimes, a discount is offered if you apply for a card at the time of purchase. Don’t forget--when you apply for their card an inquiry will be placed on your credit report. And, if you qualify for the card you will have another revolving account on your credit report. For some, another revolving account won’t hurt their credit, and might even help it. But if you have too many revolving accounts another card could negatively impact your credit standing.

Beware of "piggy-back" offers
Retail stores have been known to place “piggy-back” offers on their credit applications. These are typically an offer for another credit card, in addition to the regular store card. To tempt you to apply for the additional card the store will usually have a special promotion, such as a store gift certificate.

  • A Lesson from Robert
    Robert, a 25-year old software engineer, applied for an electronics department store card while he was purchasing a stereo for his new apartment. There was an offer on the application to receive a $25 store gift certificate if he also applied for a bank credit card. “All I had to do was sign another line on the form and I applied for the card and got the gift certificate,” said Robert, “but I didn’t think about what another credit card would do to my credit.” Remember that if you’re approved for both cards, two new accounts will be added to your credit report.
Take care when shopping around for mortgage rates
While it’s a good idea to shop around for the best mortgage rate you can find, keep in mind that lenders will check your credit before they can decide on your loan terms. This credit check will place an inquiry on your credit report. Many scoring models combine all mortgage lender inquiries within a 30-day period into one inquiry. So, try to limit your shopping time to 30 days.

Moving to a new home is an exciting event, and your credit plays a major role in the moving process. With a little care and preparation you can ensure that your move is a credit-healthy experience.

Article source -

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Saturday, September 1, 2007

Tips for Avoiding Credit Repair Scams

  • No one can erase negative information if it’s accurate. Only incorrect information can be removed. Accurate information stays on your record for 7 years from the time it’s reported (10 years for bankruptcy). Even information about bills you fell behind on but now are paid will remain on your report for these time periods.
  • Credit repair services can’t ask for payment until they’ve kept their promises. Federal law also requires credit repair services to give you a explanation of your legal rights, a detailed written contract, and three days to cancel (this applies to for-profit services, not to nonprofit organizations, banks and credit unions, or the creditors themselves)
  • Be cautious about emails for credit services. Many unsolicited emails are fraudulent.
  • You can correct mistakes on your credit report yourself. If you were recently denied credit because of information in your credit report, you have the right to request a free copy. Otherwise there is a small fee, unless your state law provides for one free report a year. It doesn’t cost anything to question or dispute items in your report. Follow the instructions provided by the credit bureau.
  • You can add an explanation to your report. If there is a good reason why you weren’t able to pay bills on time (job loss, sudden illness, etc.) or you refused to pay for something because of a legitimate dispute, give the credit bureau a short statement to include in your file.
  • Know that you can’t create a second credit file. Fraudulent companies sometimes offer to provide consumers with different tax identification or social security numbers in order to create a new credit file. This practice, called “file segregation,” is illegal, and it doesn’t work.
  • If you have credit problems, get counseling. Your local Consumer Credit Counseling Service (CCCS) can provide advice about how to build a good credit record. The CCCS may also be able to make payment plans with your creditors if you’ve fallen behind. These services are offered for free or at a very low cost. To find the nearest CCCS office, call toll-free, 800-388-2227, or go to
Information and tips from Internet Fraud Watch -

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Wednesday, August 22, 2007

Recognizing identity theft

There are several signs you may be a victim of fraud or identity theft:

  • Not receiving bills or other mail you should be getting
  • Receiving credit cards you didn’t apply for
  • Being denied credit for no reason
  • Getting calls or letters about things you didn’t buy
  • Being served court papers or arrest warrants for things you know don’t involve you

If one of the above has happened to you, it may simply be due to a clerical error. But never assume that it’s just a mistake – always look into it to find out for sure.

What to do if you’re a victim

  1. Report the crime to the police immediately.
    • Be sure to get a copy of your police report or case number
  2. Immediately contact your credit card issuers.
    • Get replacement cards with new account numbers
    • Ask that old accounts be processed as "account closed at consumer's request”
    • Follow up by writing a letter that summarizes your request to the credit card company
  3. Place a fraud alert on your credit report
    • Alert all 3 credit reporting bureaus
    • Add a victim's statement to your report so that they must contact you to verify future credit applications
    • Credit bureau contact information
  4. Correct any inaccurate information
    • Request that inquiries you didn’t initiate be removed from your report
    • Make sure your Social Security Number, address, name, employer, and other important information are all correct
    • Check to ensure all changes you requested have been made
  5. File a complaint with the Federal Trade Commission: Consumer Response Center
    Federal Trade Commission
    600 Pennsylvania Ave, NW Washington, DC 20580
    Toll-free: 1.877.FTC.HELP
    TDD: 202.326.2502
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Tuesday, August 21, 2007

3 easy ways to raise your credit score

1. Ask the primary card holder to add you as a joint card holder: But be diligent about making payments (at least the minimum) and paying on time. Being a joint card holder - not just an authorized user - means that you share full responsibility for all debt on the account.

2. Get a major credit card in your name, especially if you are married and not a primary card holder.

3. Apply for a retail or gas card that may be OK'd quickly. Student credit cards, a secured credit card or sub-prime credit card also are in theis category but aren't the best options.

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Tuesday, August 14, 2007

Does Checking My Credit Report affect My Score?

Checking your own credit report for personal use WILL NOT lower your credit rating. Times when credit inquiries do lower your credit reating include when a lender reviews your credit report when you apply for a loan or line of credit.

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Debt consolidation loans can be offered at shorter terms than a regular mortgage.

Are you overwhelmed with credit card and high interest loan debt? Considering a debt consolidation loan might be an option to help decrease your monthly payments and decrease your overall debt. If you own you own your home (or have it mortgaged), you can use the equity in your home to possibly secure a lower interest loan that will enable you to consolidate all of your debts into one..

Debt consolidation loans can be offered at shorter terms than a regular mortgage. The lender typically will issue the checks to both you and the creditor(s) of your debts, thus ensuring the borrower will use the funds for the intended purpose. Most lenders will send the checks directly to you for endorsement first and then you will send them on to your creditors. When contacting a lender, take the time to inquire about their complete debt consolidation processes and learn what your requirements are.

How to Find Debt Consolidation Loan Lender

With the market as active as it is today, there are thousands of lenders offering competitive interest rates for debt consolidation, lines of credit and personal loans. At, you can compare lenders that will meet your needs based on your financial situation as well as find out which loan option is best for you. From our site, you can find lenders that will work with individual situations such as borrowers with excellent credit, bad credit, or no credit. Our network of lenders includes various companies for each state. Identify lenders with the lending processes you are most comfortable such as complete on-line and correspondence transactions or personal individual support. Obtaining debt consolidation loan quotes from gives you a snapshot view of lenders, low interest rates, loan terms, and links to get more information including how to contact individual lenders. Let us help you. Use our one stop resource to find companies to provide you with a debt consolidation loan, line of credit or personal loan. With the information provided on our site, you can begin your loan application process today.

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NEW - Credit Grade Estimator
Self evaluate your credit score - click here!

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Wednesday, August 1, 2007

Other Credit Factors...

Mortgage companies look at other information besides your credit score and credit profile before deciding whether to approve your mortgage. They also consider:

• Income stability

• Employment history

• Monthly debts in relation to your income

• Savings amount and methods

• Mortgage type

• Property type and value

• Down payment amount

• Timeliness of rent and utilities payments

For more info and to order your credit report with FREE credit score please visit

Thursday, July 19, 2007

Start Freeing Yourself from Burdens of Debt

The Consumer Credit Counseling Service of Atlanta is encouraging people to declare their independence from credit-card debt. Make this month the start of your lifetime of economic freedom, says the nonprofit organization.

"Using credit cards for purchases can put you at risk, especially if you aren't disciplined," said Suzanne Boas, president of the CCCS office in Atlanta. "It may feel like you aren't really spending money and, before you even realize it, you have amassed a large debt that is difficult and very costly to repay."

This group's call for self-defense is useful considering the latest bankruptcy statistics. The number of consumer bankruptcies filed during the first three months of 2007 jumped to 187,361, a 66 percent increase over the first quarter of 2006, according to the Administrative Office of the U.S. Courts.

This sad news comes at the same time that the five federal regulatory agencies that oversee banks, savings institutions and credit unions (and related subsidiaries) issued a joint statement directed at certain lenders. The organizations implored the lenders to be more forthcoming about the eventual sting that borrowers may feel after signing up for teaser interest rates on subprime mortgage loans. The regulators are particularly concerned about adjustable-rate mortgage products that are contributing to the rise in bankruptcy filings.

The loans in question enabled people to get low initial payments based on a small introductory rate. Those teaser rates are expiring and many borrowers are finding they can't handle the larger mortgage payments, leading to increases in defaults and foreclosures.

About $467 billion of mortgage loans will reset for the first time in 2007 and another $383 billion will reset in 2008, according to Moody's Together the $850 billion is equivalent to about 9 percent of the mortgage debt that was outstanding in 2006, says Celia Chen, director of housing economics for Moody's.

The crux of the regulatory clarification to lenders is this: An institution's analysis of a borrower's ability to repay one of these hybrid loans should include an evaluation of the borrower's ability to repay the debt after the introductory rate expires.

"D'oh!" as Homer Simpson says.

The road to financial success means factoring in the best-case scenario and the worst-case scenario.

True financial independence is making financial decisions based on the resources you have today, not on what you might have tomorrow. That applies whether you're borrowing on a credit card or applying for a home loan.

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Thursday, July 12, 2007

What Type of Data is Used to Calculate My Credit Score?

Your credit score is based on credit-related information-both positive and negative-in your credit-bureau file, including:

  • Payment history
  • Outstanding debts
  • Credit history
  • Inquiries and new account openings
  • Types of credit in use
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Monday, July 9, 2007

Knowing credit report can help save money

Ryan Marshall, Carroll County Times Staff Writer

Anyone who’s ever bought a car, gotten a credit card or received a student loan likely has a credit report — and knowing what’s in it can save a lot of money.

The information in a credit report helps set an interest rate, which determines how much interest is paid on money borrowed.

Rod Griffin, manager of public education for Experian, said the information in a credit report is gathered from public records and previous applications for credit.

Experian, along with Equifax and TransUnion, are the main credit reporting agencies in the United States.

The information can include your name, address, Social Security number and information on any bankruptcies, tax liens or civil judgments against you.

Not included is information about savings or checking accounts, individual retirement accounts, investments or assets, Griffin said.

Along with the personal information, credit reports also track inquiries — a record of who has looked at your report.

Griffin said inquiries are divided into two categories: hard and soft.

Hard inquiries come when you initiate a credit transaction, such as opening a new charge card at a local department store.

Soft inquiries are produced when you don’t apply for credit but someone else checks your report, such as for pre-approved credit offers.

Soft inquiries only show up on copies of a credit report that you receive, while hard inquiries are visible to anyone who looks at the report.

Inquiries usually only affect credit if you already have credit issues such as missed payments, Griffin said. He said they are never the only reason someone’s request for credit would be declined.

Credit reports also keep records of whether you pay your bills on time.

Missing payments or having them arrive late can drive down your credit score, the numerical value assigned to your credit.

The scale for credit scores goes up to 850, with a good score usually considered to be anything above 720, said Neil Harrington, from M&T Bank’s consumer loans division.

The score is determined by factors such as the amount of credit someone has and how it’s being used and whether payments have been made on time, Harrington said.

Plenty of people don’t understand how important having good credit can be, said Elizabeth Schomburg, senior vice president at Family Credit Counseling Service, a nonprofit created to educate the public about debt and work with people who are struggling with it.

One of her company’s jobs is to help educate people on what the information in a credit report means and how they can use it to their advantage.

Many people only think about their credit report when they’re getting ready to make a major purchase, she said.

But Schomburg said the information in the report is affecting peoples’ lives more and more.

Potential employers and landlords can check credit reports, she said. They can even be used by insurers to check rates.

Having good credit is often looked as a sign of responsibility, she said.

Congress passed the Fair Credit Reporting Act in 1970 and amended the act in 1996.

Under the act, employers can’t access the report without your written permission.

Reports can be accessed by a court order, federal grand jury subpoena or sometimes to help determine child support payments.

“Not just anyone can get a copy of a person’s credit report,” Griffin said.

In order to get information, a company must subscribe to Experian’s services and meet the company’s security requirements.

Even if a company does qualify, it’s limited in how it can use the information, Griffin said.

Experian often deletes information such as account numbers, dates of birth or other data that aren’t related to the inquiry.

The information in the report can be a useful tool to help fix bad credit.
Griffin recommended getting a copy of your report from all three major credit reporting agencies. No one can do anything about credit problems until they know what’s in their report, he said.

The key to remember is that managing credit is a working process, Schomburg said. Most people’s credit didn’t go bad overnight, and it won’t be fixed overnight.

Reach staff writer Ryan Marshall at 410-857-7865 or

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Thursday, July 5, 2007

Difference between 620 and 760 credit score?

Mathematically, the difference between 620 and 760 is only 140, but in real life it can mean a difference of thousands of dollars per year to you.

140 doesn't sound like much. If you were shopping for a new TV, and you liked two of them, priced $140 apart, you might not worry too much about the price difference.

However, in the world of your credit score, the difference between those two is huge.

A 620 credit score means you can get a home loan, from a very few lenders, with bad terms, at a rate of around 7.5%, if you're lucky.

A 760 credit score means you can get a home loan from anywhere, with very good terms, at a rate closer to 5.5%.

A 2% difference. Again a small number. But let's look at the effect in real dollars.

The monthly difference in payment can easily be $200 - $400. Over one year this is $2400 - $4800. Look at this table, using a sample mortgage:

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Tuesday, June 12, 2007

Cosigning a Loan?

What would you do if a friend or relative asked you to cosign a loan? Before you answer, make sure you understand what cosigning involves. Under federal law, creditors are required to give you a notice that explains your obligations.

The cosigner's notice states:

* You are being asked to guarantee this debt. Think carefully before you do. If the borrower does not pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility.
* You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount.
* The creditor can collect this debt from you without first trying to collect from the borrower.* The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record.
* This notice is not the contract that makes you liable for the debt.

* Laws in your state may forbid a creditor from collecting from a cosigner without first trying to collect from the primary debtor.

Cosigners Often Pay

Studies of certain types of lenders show that for cosigned loans that go into default, as many as three out of four cosigners are asked to repay the loan. When you're asked to cosign, you're being asked to take a risk that a professional lender won't take. If the borrower met the criteria, the lender wouldn't require a cosigner.

In most states, if you cosign and your friend or relative misses a payment, the lender can immediately collect from you without first pursuing the borrower. In addition, the amount you owe may be increased by late charges or by attorneys fees if the lender decides to sue to collect. If the lender wins the case, your wages and property may be taken.

If You Do Cosign

Despite the risks, there may be times when you want to cosign. Your child may need a first loan, or a close friend may need help. Before you cosign, consider this information:

* Be sure you can afford to pay the loan. If you're asked to pay and can't, you could be sued or your credit rating could be damaged.

* Even if you're not asked to repay the debt, your liability for the loan may keep you from getting other credit because creditors will consider the cosigned loan as one of your obligations.

* Before you pledge property to secure the loan, such as your car or furniture, make sure you understand the consequences. If the borrower defaults, you could lose these items.

* Ask the lender to calculate the amount of money you might owe. The lender isn't required to do this, but may if asked. You also may be able to negotiate the specific terms of your obligation. For example, you may want to limit your liability to the principal on the loan, and not include late charges, court costs, or attorneys' fees. In this case, ask the lender to include a statement in the contract similar to: "The cosigner will be responsible only for the principal balance on this loan at the time of default."

* Ask the lender to agree, in writing, to notify you if the borrower misses a payment. That will give you time to deal with the problem or make back payments without having to repay the entire amount immediately.

* Make sure you get copies of all important papers, such as the loan contract, the Truth-in-Lending Disclosure Statement, and warranties, if you're cosigning for a purchase. You may need these documents if there's a dispute between the borrower and the seller. The lender is not required to give you these papers; you may have to get copies from the borrower.

* Check your state law for additional cosigner rights.

For more info and to order your credit report with FREE credit score please visit

Monday, June 11, 2007

Credit scoring change overdue

THE SAVAGE TRUTH | But 'authorized user' change may hurt some women

In March I wrote about the dangers of "lending" your good credit to desperate strangers seeking to borrow money at interest rates lower than their own credit rating would justify.

Web sites had sprung up to act as "matchmakers" between people who needed improved credit, and people who have excellent credit and were tempted to earn some extra money every month by allowing these deadbeat strangers to become "authorized users" on their credit card accounts. The sites collected fees from both parties.

(Authorized users have no liability for payments, and do not have to undergo a credit check before being added to an existing account.)

Violates credit-repair act

It was a practice that should have been stopped by the government. The services clearly violate the Federal Credit Repair Organizations Act, because of how they accept payment for promises to boost the deadbeats' credit, according to John Ulzheimer, of

I'm surprised no state or federal prosecutor sued these companies for facilitating bank or insurance fraud. By fraudulently enhancing a credit score, all three participants - the borrower, middleman, and "lender" of credit -- were participating in a deception.

Now, Fair Isaac, the company that created FICO, the most popular credit scoring system used by lenders nationwide, has announced that its new scoring model will no longer factor the scores of "authorized users" into its FICO accounts.

It's a move that should put an end to the enticement of letting a stranger use your credit-worthiness when applying for insurance or a loan. But it may also affect many unwary people, causing their credit scores to drop sharply.

This change could have a huge impact on women. Many women who use their spouse's credit card are unaware that they are not joint holders of that card.

Instead, they have gone for years as an "authorized user" on the spouse's card. Most card issuers do report payments on a user's credit report. But now, that payment history will no longer count as part of the credit score!

In the future, if that woman wants to purchase insurance or open a new account, she may find she has a very low score -- simply because those credit cards are no longer counted in her score.

Many parents added teens to their credit card accounts as authorized users to help them build a credit record. Now these accounts won't be included to help build the teens' good credit score.

I've always suggested the best way to help a young adult build a credit history was to open a "secured" card account, with a credit limit based on a deposit in a savings account at the credit granting bank.

Then the young cardholder can use the card to make purchases or cash withdrawals, and build up his or her own record of prompt and complete monthly repayments.

All of that payment history will be reported to the credit bureaus under the individual's name. (To search for a "secured card" go to

A change for the better for all
While this change in FICO scoring may prove inconvenient for many of those who are well-meaning and legal "authorized users" of credit cards, it will close down a fraudulent process that affects all consumers by raising the cost of credit.

After all, if an individual can't qualify for credit on his or her own, but secures it fraudulently, there is a great likelihood of default -- whether on a mortgage or some other purchase.

And when lenders lose, we all wind up paying. That's the Savage Truth.

Terry Savage is a registered investment adviser.

For more info and to order your credit report with FREE credit score please visit

Common Credit Score Myths

A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing. But the bottom line is bad information can cost you money no matter who you get it from.

Fico score ratings are used for most mortgage lending, which means, you need to know what will hurt or help your credit score points. To make it clear, here are some of the most common credit score myths.

* Checking your credit report will hurt your credit score

Checking your own credit report and credit score counts as a soft inquiry and does not go against your score. However, if anyone else like a lender or credit card company is checking your credit report, this is considered a hard inquiry and will generally knock off about 5 credit score points.

The credit score rating system treats multiple inquiries in a 14-day period as just one inquiry. The system ignores all inquiries made within 30 days prior to the day the credit score is computed. So if you want to minimize the damage from credit inquiries, shop for a loan in that short period of time.

* Closing old accounts will improve your credit report score
Sometimes even lenders will tell you to close your old and inactive accounts as a way for improving your credit report score. In most cases, closing old accounts will actually have the opposite effect with the current credit score rating system.

Canceling old credit accounts can actually lower your credit score because it makes your credit history appear shorter. If you want to reduce your levels of available credit, it's better to reduce or close new accounts instead. Applying for new credit is more likely to lower your score.

* You need to check more than just FICO score rating
If you ever hear this from anyone, consider it a red flag. All of the three major credit reporting bureaus offer FICO credit score ratings using the formula developed by Fair, Isaac. Even though each one gives the scores a different name you only need a fico score rating from the three major credit reporting bureaus.

At Equifax, the FICO score rating is called the Beacon credit score. At TransUnion, it’s called Empirica. At Experian, it's known as the Experian/Fair, Isaac Risk Model.

The reason each of the three major credit reporting bureaus will have three different scores is because they don’t all share the same data. So when checking your credit report, just make sure it comes from the three major credit reporting bureaus: Experian, Trans Union and Equifax.

Examine your credit reports from all three major credit reporting bureaus before you apply for a big loan like a mortgage. Fix any errors in all three reports before you shop for a loan because it takes time to correct your credit report.

* Credit counseling will hurt your score
The current FICO credit score rating system ignores any reference to credit counseling that may be in your file. The researchers at Fair, Isaac, the company that created the FICO credit scoring rating system, found that people getting credit counseling didn’t default on their debts any more often than anyone else.

However, any late payments you've had with creditors will hurt your credit score. Credit counseling can hurt your ability to get a loan because you probably have had trouble paying creditors.

Some lenders will back away if you are in credit counseling. Others may see it differently, but usually will charge you higher interest rates than if you had perfect credit.

The best way to improve your credit report score is paying your bills on time and paying down credit card debt. Check your credit report regularly for any errors and make sure you don't fall for these common credit score myths.

Copyright © 2005 Credit Repair All Rights Reserved.

This article is supplied by where you will find credit information, debt elimination programs and informative articles that give you the knowledge to correct your own credit and credit report.

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Tuesday, May 1, 2007

Legal Credit Repair Options for the Credit Challenged

If you are like most people, then chances are you have a credit card bill or two. For some, credit cards work well and they build their credit with them, but for others, life events may make it hard for them to keep up the bills including those essential credit cards. There are legal credit repair options for those who can't seem to stay on top of their game.

For more info and to order your credit report with FREE credit score please visit

Thursday, April 19, 2007

How long do bankruptcies and foreclosures stay on a credit report?

Bankruptcies and foreclosures can remain on a credit report for seven to 10 years. Some lenders will consider an borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision.

For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.

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Tuesday, April 17, 2007

How Do You Improve Your Credit Score?

There is no one thing that will always improve your score. In general, there are several things you can do to increase or maintain your score.

  • Pay your bills on time - This the single most important factor tied to having a good score.
  • Establish a credit history - Having a few debts is good, it shows that you can responsibly pay for items. Keeping those accounts open for many years also helps 'age' your report
  • Don't take on too much debt - The more debt you owe the higher risk you are to future creditors. Don't spread yourself too thin.

Article source: From Experian

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Monday, April 16, 2007

Know Your Credit Score

Just about every time your credit is reviewed by an authorized party, they are looking at more than just your credit report. In addition to your credit history, which breaks down each of your past and present credit relationships, they may also be looking at your credit score to evaluate your credit health.

A credit score is a number that is generated through the use of statistical models using elements from your credit report. Your score, which is a fluid number, is not physically a part of your credit report; it is calculated at the time that a lender requests your credit report.

Chances are that you have already viewed your score and perhaps even seen it change over time. Because scores and scoring education have only recently become available to consumers, CreditExpert's scoring tools may raise questions and we're offering some answers to frequently asked questions we've received on this topic. Keep in mind that there are many credit scores in use by lenders today, but by consistently monitoring the same score like you see on CreditExpert, you'll have a good understanding of how scores change and are influenced by your credit behavior.

Why has my score changed in just a week, I haven't done anything different?

Your score can fluctuate based on when your creditors send us their information. Perhaps your balance increased on one or two of your credit cards or the age of your credit file has changed. Aging (how long you have had credit) indicates stability. A longer credit history will give you a higher score.

Over time, these fluctuations will "balance" themselves out so most likely if you have not changed your behavior the score will be fairly steady month to month. Although you can view your updated score daily, checking it on a monthly basis should be sufficient for tracking purposes.

Article source: From Experian

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Friday, April 13, 2007

Preventing Identity Theft

What strikes young or old, male or female, rich or poor?

Identity Theft, it topped the Federal Trade Commission's list of consumer complaints in 2002, and has cost consumers $343 million during that year. There were approximately 500,000 identity theft victims who filed a police report in 2001.

What is Identity Theft?

It's the act of using someone's personal information (such as a name, account number, driver's license, health insurance card, or Social Security number, for example) without that person's knowledge, and using the assumed identity to commit fraud or theft. Oftentimes, the personal information is used to get loans or open credit-card accounts. Some victims who have had their identity stolen have lost job opportunities, been refused loans and housing, been left with destroyed credit and reputations.

You can't prevent it from happening to you, but you can take precautions to make sure you're not an easy target!

  • Keep track of your personal information and only share the information with a company you know and trust. Read and understand the fine print in every document.
  • Protect your Social Security number and mother´s maiden name. Avoid giving personal information out over the phone. Never post your Social Security number on your checks, outside of envelopes, etc.
  • Minimize the number of identification information and financial cards you carry in your wallet and sign all new credit cards upon receipt. Write “Check ID” after your signature as a note to shopkeepers to ask for identification.
  • Keep your new and canceled checks in a safe place, and report lost or stolen checks to the issuing financial institution immediately.
  • Never leave receipts at bank machines, bank counters, trash receptacles, or unattended gas pumps. Save them and match them against your monthly bills, and then shred them.
  • Buy only from secure Internet sites. Look for the closed lock icon to appear at the bottom of your browser to check the site´s security status. Also, check the site´s privacy policies to make sure they are not distributing or selling your name and information without your permission.
  • Shred any documents that have any personal information or credit account numbers on them before discarding, including tax returns and unwanted credit card offers.
  • Report all lost or stolen credit cards. If you applied for a new credit card and it has not arrived in a timely manner, call the bank or credit card company that is issuing the card.
  • Follow up with creditors if your bills do not arrive on time. A missing credit card bill could mean an identity thief has changed your billing address to cover his/her tracks.
  • Notify your credit card companies and financial institutions in advance of any change of address or telephone number. Make sure to contact the sender if your statements are not received in the mail by their usual time.
  • Monitor your credit. Check your credit report regularly from the three credit-reporting agencies for any unfamiliar changes, such as new accounts, inquiries, or public records.
  • Order your Social Security Earnings and Benefits Statement annually to check for fraud by calling 1.800.772.1213.
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Thursday, April 12, 2007

What Is a Credit Bureau?

A credit bureau or credit reporting agency is in the business of gathering, maintaining, and selling information about consumers' credit histories. It collects information about consumers' payment habits from credit grantors like banks, savings and loans, credit unions, finance companies, and retailers. The credit bureau stores this information in a computer database and sells it to credit grantors in the form of credit reports. When you apply for a new credit card or loan, the credit grantor orders your credit report from at least one credit bureau and analyzes the information to decide whether to grant you credit. The credit bureau charges the credit grantor a fee for every credit report sold.

Although credit-reporting agencies provide your credit report to lenders when you apply for credit, they do not make actual lending decisions. It is up to individual lenders to evaluate your credit report and any other factors they consider important and then decide whether or not to offer you credit.

The Three Consumer Credit Bureaus

There are three major credit bureaus providing nationwide coverage of consumer credit information in the United States: ExperianEquifax, , and TransUnion. Although many national lending institutions report consumer credit information to all three, smaller banks and other credit grantors may report to only one—or even none. Therefore, your credit report from one credit bureau is not necessarily exactly the same as your credit report from anothe

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Can Your Credit Score Go Down If You Apply For Too Many Credit Cards?


Applying for too many credit cards can lower your credit score. One of the aspects of your credit report/history that affects your credit score is your average account age or the average amount of time that you have had open accounts.

Each time you are approved for a new account, it reduces your average account age, since the new account has only just been opened. By opening several new accounts within a short time period, the average is decreased even more drastically, which can result in a lower score.

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Monday, April 9, 2007

Tips To Repair Your Credit Score

People in debt should be careful to pay their monthly installments punctually and stick to the deadlines agreed upon. Drifting from this will result in a bad credit history. A bad credit record entered into your Credit File will ensure that you will not get a bank loan. Even mortgage brokers will not be willing to assist you. Thus, it is imperative primarily to maintain a clean credit history as also to repair and restore your damaged credit record.

For more info and to order your credit report with FREE credit score please visit

Friday, April 6, 2007

Credit Score Confusion

Answers to six commonly-asked questions about credit scores

If you’re one of the millions of Americans who don’t know their credit scores, you could be missing out on an opportunity to save money on your mortgage, cars, jewelry, electronics, vacations and anything else you may charge.

Your credit score is an estimate of your credit risk, which is based on your credit report. Lenders use this number to determine how likely you will be to repay a loan or line of credit in a timely manner. The higher the score, the more likely you’ll receive a lower interest rate, and ultimately save money.

Only 27 percent of consumers understand that credit scores measure credit risk – not credit knowledge, amount of credit or attitude toward credit, according to the Consumer Federation of America.

"There are many misconceptions circulating about the function and purpose of credit scores," said Mike Sullivan, director of education for Take Charge America, a national non-profit credit counseling agency. "Yet, this three-digit number can impact you financially nearly every day of your life."

American consumers have an average of 13 credit obligations on record at a credit bureau, according to Fair Isaac Corporation, which pioneered the most common credit score, called the FICO score. These obligations include commonly-used credit cards, store cards, gas cards and installment loans, each of which has an impact on your credit score.

To help sort out the confusion, Sullivan answers six common questions about credit scores:

· Do I have only one credit score? No, lenders are not required to report to each of the three major credit bureaus: Equifax, Experian and Trans Union. Each agency may have different information on your report, and therefore, a different score.

· If I continually check my credit report, will that lower my credit score? You can check your report directly from the three credit bureaus as many times are you want, and it will not affect your credit score. You can visit ReliaCredit - to obtain your FREE Credit score from all three credit card bureaus

· If I cancel a credit card, can that lower my credit score? Yes, canceling credit cards can actually decrease your score. For instance, if you have $50,000 in available credit and owe $10,000, then you owe 20 percent of your available credit. If you close an account with a $30,000 credit limit, you will then owe the same $10,000 but it will be 50 percent of your available credit. That lowers your credit score. It also affects the history part of your score, lowering it even further.

· Does my salary affect my credit score? Your credit score is based on the amount of credit and debt you have, not how much money you make. If you receive a raise, and your credit and debt remain th
e same, your credit score will not improve. If you receive a raise and use that extra money to pay down your debt, then your credit score will improve.

· Does shopping for a loan lower my credit score? While multiple inquiries do show up on your credit report, they do not necessarily damage your score. If the same types of inquiries are made within 14 days of each other, they only count as one inquiry on your credit report. Keep in mind that this applies to loans, not credit cards.

· If I only use cash to make purchases, will I improve my credit score? Your credit score is determined by the amount of credit you use, not the amount of cash you use. A steady, responsible use of credit is the best way to build your credit score. You need to find a middle ground, as an absence of credit as well as an overuse of credit can work against you.

For more info and to order your credit report with FREE credit score please visit

Friday, March 30, 2007

The Components of your Credit Report

A credit score is a number that is generated by a mathematical formula based on information that is in your credit report, compared to the information of other people. The resulting number is a highly accurate prediction of how likely you are to pay your bills.

Credit scores are used extensively and if you’ve gotten a mortgage, a car loan, a credit card or auto insurance, the rate you received was directly related to your credit score. The higher the number, the better you look to lenders. People with the highest scores get the lowest interest rates.

Scoring Categories

The scale runs from 300 to 850. The vast majority of people will have scores between 600 and 800. A score of 720 or higher get you the most favorable interest rates on a mortgage.

The Key Factors that Determine Your Score

  1. Paying your Bills
    The most important factor is how you’ve paid your bills in the past, placing the most emphasis on recent activity. Paying all your bills on time is good, paying them late on a steady basis is bad. Having accounts that were sent to collections is worse. Declaring bankruptcy is worst.
  1. Amount of money you owe and the amount of available credit
    The second most important area is your outstanding debt which means how much money you owe on credit cards, car loans, mortgages, home equity lines, etc. Also considered is the amount of credit you have available. If you hold possession of 15 credit cards that have a $10,000 credit limit, that’s $150,000 of available credit. People who have a lot of credit available tend to use it, which makes them a less attractive credit risk.
  1. Length of credit risk
    The third of factor is the length of your credit history. The longer you’ve had credit, the more points you get.
  1. Mix of credit
    The best scores will have a mix of both revolving credit, such as credit cards, and installment credits such as mortgages and car loans.
  1. New credit applications
    The final category is your interest in new credit, how many credit applications you’re filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping hurts your score, is when you have previous recent credit stumbles, such as late payments or bills sent to collections

Monday, March 26, 2007

Pre-marriage credit check can enhance wedded bliss

By Carolyn Bigda (

This time of the year many couples are busy preparing for their upcoming nuptials. Cake? Check. Wedding dress? Check?

Credit Reports?

It's a worthwhile item to add to the to-do list.

Good credit can make all the difference in obtaining a low interest rate on a mortgage and other loans you will want to take out as husband and wife. And if there's credit trouble, the sooner you start repairing the damage, the better.

Here's what to do.

>Request your reports

As soon as possible request your individual credit reports from the three main credit reporting agencies: Equifax, Experian and TransUnion.

By law you are entitled to a free copy from each bureau every 12 months at You'll have to pay $7.95 for a FICO score, the credit rating most lenders use, from Equifax. The other bureaus sell alternative scores.

If you plan to buy a home you also could make a trip to your bank or credit union for a mortgage prequalification. By doing so you'll learn how much house you can buy based on your credit and income, among other factors.

And should your credit need polishing, a loan officer can suggest tips.

"It's fairly common among younger couples that one spouse has good credit and the other has bad credit," said Marc Savitt, vice president of the National Association of Mortgage Brokers.To nab a lower interest rate the spouse with good credit could apply solo. But without two incomes on the application only a smaller loan likely would be approved.

Credit unions may be more lenient and concentrate on the better score in a joint application.

>Patching things up

Your FICO score improves the more distance you put between the present and any past credit mistakes. That's why it is important to identify problems before you apply for a loan.

"Credit can always be rehabilitated, but it can take some time," anywhere from nine months to two years, depending on the severity of the problem, said Evan Hendricks, author of Credit Scores & Credit Reports.

Some 65 percent of your credit score is based on your payment history and the amount of debt you owe. So paying your bills on time and paying down the balances will, over time, buoy your score.

The good news is that even after you are married you and your spouse keep separate credit reports. One's track record won't tarnish the other's.

One exception is if you take out a joint loan. In that case you are equally liable for the account. So pay late one month and the blunder shows up on both credit reports -- even if the payment was the other person's responsibility.

As a result Hendricks recommends focusing on improving your credit separately.

>Become authorized

There is one way to build credit jointly without having both spouses apply for a loan: naming an authorized user on a credit card.

An authorized user can make purchases with the card, and the account's record typically appears on that person's credit report. But the user is not responsible for the debt and would not have to pay any outstanding balances if, say, the original cardholder defaulted.

This arrangement is helpful if you have no credit history, because it's tough to borrow money, and therefore start building a record, without a file already in place.

But similar risks of a joint credit account apply. If one person fails to pay on time or runs up huge balances it could stain both credit reports.

Wednesday, March 21, 2007

Seven Steps for you in 2007

Get a jumpstart on 2007 with these seven tips. Following these guidelines will help you better your credit in the new year.

1. Create a cash flow budget - it is possible to attain good credit with minimal cash flow. By creating a budget of the cash you have available and changing your billing cycles so that they are spread out over the month, chances are better that you will be able to pay your bills on time.

2. Pay your bills on time and consistently - late and missed payments, especially accounts that have been sent to collections, have major impacts on your score. Since not all companies report to the credit reporting agencies, find out who reports and who doesn't, this will help you prioritize your bills. Also, find out when your credit card companies report to the credit bureau and change your billing cycle to ensure you pay your bill before they report.

3. Get a free copy of your credit report from all three credit bureaus – by law, everyone is entitled to a free copy of their credit report each year. Also, take the time to learn what your credit score is comprised of and what will impact it most.

4. Do not use a credit repair agency – there is nothing a credit repair agency can do for you that you cannot do for yourself. Education is key. Fix any errors you find on your credit report - 1 in every 4 credit reports have serious enough errors to cause a negative impact on the credit you are applying for.

5. Dispute negative debt with credit bureaus (only on closed accounts) - the collection agency has to respond within 30 days or else it will have to be removed from your credit report. Don't pay old bad debt accounts - it is best to pay off very recent collection accounts, however in most cases it is better not to pay off an old collection. Instead, let it drop off your credit report which takes seven years. If you pay off an old collection account it will show up as new activity on your report (for another seven years), thus lowering your score.

6. Look for times during the year where you may have extra money available and pay down your credit card debt (holiday bonus time or when receive your tax refund, etc) - it is important to keep the amount of revolving debt on any card at less than 25 percent of the available credit line, the closer you come to being "maxed-out" the worse your credit score will be.

7. If you are going to be opening up several lines of credit in 2007, space them out – taking out too many new lines of credit in a short period of time (90 days) raises red flags and makes you look like a greater risk factor. Close store cards that you have open. Store cards traditionally have low limits, making them easier to max out. Plus, since you can only use them in one place, they tend to effect your credit negatively.

Improving Your Credit Score

Your credit score is what lenders use to assess their risk in loaning you money. Your credit score is based on the information in your credit report, so first analyze your credit report and look for errors that could be effecting your score. Improving your score can help you get approved for lines of credit easier with lower interest rates, thereby saving you money.

Once you know your score, follow these easy tips to improve your rating:

1. Pay your bills on time consistently. Late and missed payments, especially accounts that have been sent to collections, have major impacts on your score.

2. Keep balances low on all of your credit cards. Maxing out your credit cards will lower your score, possibly by as much as 70 points.

3. Avoid opening or closing a lot of new credit cards at once. It may seem like a quick fix, however a significant amount of new credit will harm your score, and closed accounts can still have an impact.

4. Use the credit you have wisely. Manage your current accounts, by making payments on time and being aware of balances and limits, to prove to lenders you are responsible with your credit.

5. Moving debt around (e.g. consolidating the debt on your cards) without paying any of it off can lower your score. Keep your debt where it is and focus on paying it off.

6. Check your credit report often to spot errors quickly and track progress.

7. Avoid credit repair agencies that promise an instant fix. Rebuilding your credit takes time, and any agency that guarantees instant credit repair is only looking to exploit people in need.

Monday, March 19, 2007

5 steps to do-it-yourself credit repair

Blotches on your credit report cost you. But, don't despair. It's never too late to become credit worthy -- just get started, and remember that it won't happen overnight.

Here are 5 steps for improving your credit rating:

1. Order your credit reports

Find out what the top three credit bureaus -- Equifax, TransUnion and Experian -- are saying about you. It's likely that they're all slightly different. Yes, different! Creditors don't have to report to all three credit bureaus, so they typically report to the credit bureau to which they also subscribe.

Time and money is wasted, says Steve Rhode, president and co-founder of, if you only order a report from one credit bureau. You can order a credit report from each bureau.

Costs vary from state to state, but in most states, it costs around $9 to get your report.

If you've been denied credit, insurance or employment because of your credit report, you are entitled to a free copy of your report from the reporting agency. The company you applied to must supply the credit bureau's name, address and telephone number. You have 60 days after receiving the denial notice to request your copy.

2. Examine your reports carefully

Nearly every consumer has an error on at least one credit report from one of the major credit bureaus, says Rhode. Credit bureaus generate your report on information they receive from your creditors; they don't verify.

Keeping your credit report a true reflection of you is -- like it or not -- your job. Get ready to clean and polish. Carefully look for everything from typing errors, outdated and incomplete information to inaccurate account histories. You'll want to make a thorough list of items you dispute and why. Be meticulous.

Here's how to read and understand your credit report.

If the negative information in your report is true, only time and improved habits can change that. Late payments and charged-off accounts remain on your report for seven years; bankruptcies for 10. Most creditors, however, look for a pattern of payment rather than focusing on one-time or rare occurrences; so consistent on-time bill payments will improve those blemishes.

3. Double-D strategy -- dispute and document

Remember, a bad report costs you money. So, it pays to be thorough! You can either complete the dispute form provided with your credit report or write a letter. Clearly identify each mistake and state why it's wrong. A recommendation is to send a photocopy of your credit report with the mistakes circled to the reporting credit bureau. Include copies of supporting documents.

Document, document, document. Keep copies and records of all the forms, letters and documentation that you send the credit bureaus, plus dates sent. The credit bureau must investigate any relevant dispute within 30 days of receiving your letter. Any item that is not verified as accurate by a creditor is removed.

Sometimes it's necessary to contact your creditors to resolve mistakes. Bankrate's 7 steps to fixing your credit report will help you tackle the serious errors.

If the credit bureau makes any changes to your credit file, it will send you the results and a free, updated copy of your credit report. Once a negative item is removed from your report, the credit bureau cannot put it back on unless a creditor verifies its accuracy and completeness -- and sends you written notice.

4. Solve and dissolve debt

Now's the time to devise a spending plan that reduces your debt and sets you up to pay on time, every time.

If you're having difficulty making payments, be proactive. Call your creditors and negotiate to keep your accounts current and from being reported as delinquent or "bad debt." You can ask for reduced monthly payments, or even change due dates to balance out your monthly bills.

The same strategy can be used for fixed-loan payments. Remember, though, that this is a short-term strategy. You'll pay more interest to extend the repayment schedule, but it allows you to stay current and save your credit rating. Use the extra money to pay off debts one at a time, gradually increasing payments to other debts.

Deal with any collection accounts. Unpaid collections are worse than paid collections. You can negotiate a pay-off settlement that reduces your bill, plus demand that all derogatory remarks are removed from your credit report or at least reported as paid in full. Be sure to get verbal agreements in writing before sending off your payment.

Slowly close out unneeded or unused credit accounts. Most experts recommend carrying between two and four major cards. But, be cautious when canceling because closing accounts can negatively impact your credit score, commonly called a FICO score. FICO considers the ratio of total debts to total available credit. A good rule of thumb is to keep your revolving debt to 50 percent of your available credit.

Remember that cutting up the card doesn't close out the account. Here's a step-by-step guide to smartly close out your account.

Other tips:

  • Close out your newest accounts so that you don't lose your longer credit history.
  • Close out accounts slowly over several months.
  • Verify that all accounts you've closed are reported as "closed by consumer" for the best report.
  • Even if creditors offer to raise credit limits, allow yourself only moderate credit limits.
  • Keep your balances low and avoid revolving balances.
5. Add stability to your credit file

You can also work to add positive information and show stability in your credit file.

You may have been denied credit because of an insufficient credit file, yet you have credit. Some creditors -- such as, travel, entertainment, gasoline card companies, local banks and credit unions -- may not report your credit history to the credit bureaus. You can try asking the credit grantors to report your account information and monthly payment history to a credit-reporting agency. Not all will do that. So, in the future, before opening a new account, ask if your on-time payments will be reported monthly to a credit-reporting agency, recommends

If you have really bad credit -- perhaps even filed bankruptcy -- don't let your credit status go dormant. "The faster you begin to re-establish good credit, where you pay on time, every time," says Craig Watts, consumer affairs manager of the Fair, Isaac and Company, "the faster you'll improve your credit score."

Build a solid credit history. Secured credit cards offer people with no credit and those repairing their credit this opportunity. Shop around for the best deal available, but limit your applications. Credit bureaus look at how many new accounts you've opened, and the number of "inquiries" for new accounts that are listed. A sudden flurry of "inquiries" results in a lower score, because many times consumers anticipating money problems increase their credit lines. Inquiries made by creditors wanting to make "prescreened" credit offers are not counted.

Lastly, open a savings account at your bank. This shows creditors that you are working to save and that you have reserves to repay debts.

For more info and to order your credit report with FREE credit score please visit

Friday, March 2, 2007

You may want to repair your credit score before you qualify for a home mortgage or car loan.

You may want to repair your credit score first before you qualify for a home mortgage or car loan. A better credit score rating also means you don't have to pay high interest rates on a credit card or higher monthly payments on a mortgage.
The higher your credit score the lower your monthly home payments will be. This is typically the same across the board when it comes to mortgages, car loans, personal loans, and credit cards.

If you still owe money to creditors and your not able to pay the monthly payments they ask for, you may need a budgeting clinic, a debt settlement service, and written 'no contact letters' to problem creditors. One or all three of these parts may affect the structure of repairing your own credit score. Your Personal Financial Stability is a direct result of your knowledge gained and expertise about your own credit score rating - at

Most people know you can repair your credit score on your own, and most people truly desire to hire an honest and reputable service with all the expertise to educate and get the job done. The most important factor is knowing how to keep your credit score rating to perfection after it has been repaired.

Repairing your credit score is a structured process that needs the knowledge of a specialist. This process alone will require time and effort to properly repair your credit score rating. This will never happen overnight and does take time to plan and implement.

Please never think your credit score repair does not require knowledge, focus, and patience. Do not be taken by a scam and pay for a service that claims they will repair your credit score rating by tomorrow or the day after tomorrow. This is far from the truth and be cautious of whom you hire to do the personal and professional job you need accomplished. You're here to receive certain knowledge so you can obtain your personal financial goals at the next higher level.

Did you know that repairing your credit score is only a one-time deal you have with our services? As credit repair experts, we believe if you are serious about repairing your credit score, you will only need to do this once.

For more info and to order your credit report with FREE credit score please visit

Tuesday, February 27, 2007

Top 5 Credit Score Mistakes


1. Missing a payment

It goes without saying that late payments hurt your credit. What many people don't realize is how much. "Being reported as delinquent in paying your bills is the biggest whammy for your score," says Craig Watts, a spokesman for Fair Isaac, the company that calculates FICO scores. A single late payment could sink you by as much as 100 points, especially if your credit history has been good up to that point. (FICO scores range between 300 and 850; anything 720 and above is considered good.)

2. Maxing out your cards

Guess what: You can have a perfect payment history, never a day late on your cards, and still have a less than average score, says Fair Isaac's Watts. "You could lower your score from an excellent category to a good or fair category simply by using most of the credit available to you," he says. Indeed, maxing out your credit cards could bring your score down from 749 to as low as 609, according to Fair Isaac's FICO Score Simulator.

Again, consumers with already low scores won't be hurt as much. A 573 score that has negatives such as delinquent accounts could drop to 543 if all accounts are maxed out, but could potentially remain the same.

3. Applying for credit (too many times within a short period)

Applying for credit can be tricky. On the one hand, you need credit cards if you want to build a credit history and have a good credit score. On the other, applying for too many cards too quickly can hurt you. That's because each inquiry (when a creditor pulls your credit report and score to see if you qualify) drops your score a little, says Watts.

How much depends on your previous history. Ironically, the more you need to apply for new credit -- say you're just starting to build a credit history or you're trying to recover from a bankruptcy filing -- the more inquiries will affect your score. "If someone already has significant credit problems on their report and now they're shopping for new lines of credit, that's an indicator that they're a higher credit risk," Watts says. Same with people with little or no credit because there isn't sufficient information on the report reflecting positive credit management to balance the negative impact of the inquiries.

What to do? "Take it slow," Watts says. "That's good advice for anyone, but especially if you're trying to recover or are new to credit."

4. Closing Credit Cards

Many folks think closing unused credit cards will improve their credit score. Quite the opposite: Closing unused accounts in fact decreases your score, Watts says. Why? You're eliminating a chunk of available credit, which then automatically increases your credit utilization, or how much of your available credit you're using. Credit utilization is responsible for a hefty 30% of your credit score, so the effects of closing a credit card with a generous limit could be pretty severe.

5. Moving

How can the simple act of moving affect your credit score? It's simpler than you think. Even if you forward your mail to your new address, bills -- including utility bills -- can and often do get lost in the shuffle. "Suddenly, someone who's never been late has a collections account reported to the bureaus and the damage would be just as severe as with a delinquency," Watts says. "A $5 library fine could suddenly lower someone's score by dozens of points."

The bad news: You'd think a collections agency would call you about that unpaid bill before reporting it to the bureaus, but that's not always the case, says's Ulzheimer. "They'll take the lower-dollar collections accounts and just report them to the bureaus without even contacting the consumer," he explains. "It's easier to report to the bureau rather than wasting time trying to collect $80." Then when you try to buy a house or car and get denied because of the collections account, you'd have to track down the agency yourself and pay up. An efficient business model, to be sure, and all the more reason to be vigilant about paying your bills.

For more info and to order your credit report with FREE credit score please visit

Monday, February 19, 2007

Homeowners - Understanding Your Credit Report

Many homebuyers put off meeting with a mortgage broker until the last possible minute. After all, nobody likes having the intimate details of their credit reviewed. The images in our heads are of pompous bankers making arrogant judgments about our worth as human beings. But the good news is that it's never been easier to find financing for your home, and most mortgage lenders are friendly and courteous. Keep in mind, they want your business - that's how they get paid. And besides, in today's economy, the likelihood is that your banker's credit isn't without a blemish either.

Still, you'll feel much better about approaching a lender when you know what's on your credit report. Viewing your credit report allows you to prepare explanations for any past transgressions, and also to dispute the veracity of any incorrect information. While accessing your credit report isn't always free like it used to be, it is easy and relatively inexpensive. There's no reason for you to put it off for even one more day.

What Are Credit Reports?

There are three major credit reporting agencies in the United States, Equifax, Experian, and TransUnion. Each of these private companies compete with one another in the free market, selling your information to potential creditors, employers, landlords, and insurers. This means that you don't have just one credit report, but three.

Since the three major credit bureaus are business adversaries, they don't make a practice of sharing information. As a result, each of your three credit reports (and resulting credit scores) could be vastly different. Perhaps Experian has an old delinquent account that you actually paid, or maybe TransUnion doesn't have one of your credit cards on file. Including incorrect negative information or omitting correct positive information can lower your credit scores, so it's important that you know what's on your credit reports before applying for a mortgage.

What Are Credit Scores?

You probably haven't heard of the Fair Isaac Company, but I bet you've heard of its nickname, FICO. Fair Isaac is the company that developed the credit scoring software that each of the three major bureaus use to calculate your credit score.

FICO scores range from 300 to 850, and you're likely to have a different, possibly very different, score with each of the three agencies. This is because not only might they have different information, but Equifax, Experian, and TransUnion each use a different formula to determine your score. Some lenders subscribe to all three agencies, others just one or two. If you're lucky, your lender will only check the credit bureau with which you have the highest score, but it's a crap shoot.

How Can I View My Credit Reports and Credit Scores?

In the past, you were legally entitled to receive one free credit report from each of the three major bureaus each year. Congress took away that right in 1997, so be skeptical of any online ad you see promising a free credit report - there are always strings attached.You can legitimately request a free credit report if you are denied credit, employment, or insurance. The company that declines you must supply written notice explaining, in brief, why you weren't approved. Photocopy this information and send it to the three credit agencies with a requests for free credit reports.

Knowing what's on your credit report can be a big relief, and also save you a lot of money. If there are any errors on your report, you need to have them removed. Otherwise, you could end up paying a higher interest rate. Understanding your credit report should be the first step for any intelligent person in the market for a new home.

For more info and to order your credit report with FREE credit score please visit

Wednesday, February 7, 2007

Build Your Credit History

Even if you don't think your credit history is good, or if you don't think you have any at all, consider checking your credit report to find out just where you stand. You might be surprised. If you notice negative information on your report, confirm that that information is accurate. Most derogatory information, such as a loan payment that was 180 days late, must remain on your credit report for at least 7 years. However, if a negative record is not accurate, be sure to send a letter of dispute to the credit bureau that reported the error.

The next step in building or rebuilding your credit history is to get a credit card. You may have to start with a secured credit card, in which a savings account is used as collateral for your credit. Also consider special-interest cards that are oriented to your purchasing habits, such as a gas card or department store credit card. No matter what card you decide to get, be sure to read the fine print and watch for high APR rates, setup fees, annual fees, and short grace periods. Be sure to use your new card responsibly and make all your payments on time.

For more info and to order your credit report with FREE credit score please visit

Should I use a Credit Repair agency?

Despite their great claims to eliminate your negative records or improve your credit score in a short time, credit counseling agencies, credit repair companies, and debt consolidation agencies can be severely damaging to your credit, and your wallet. The business of credit counseling is worth an estimated 7 billion dollars a year. These companies can charge you on a percentage of your debt or demand a large setup fee. If you are seeking credit counseling, odds are that you'd rather apply that money directly toward paying off the debt itself. Be sure to consult the fine print and know what kind of payment basis you are committing to.

Bear in mind that when a credit repair agency steps in to mediate between you and your creditors, you will still be held fully responsible for your outstanding debt. An unethical but common practice of credit repair agencies is to keep your first round of late payments for themselves. This may create or add to a record of late payments that can remain on your credit report for several years. If you decide to work with an agency, it's wise to periodically check your credit report to make sure that payments are being made on time.

What many people don't realize is that you have the power to do for yourself all the things that a credit repair agency can do for you. You can negotiate a payment plan directly with your creditors, reduce your debt, and improve your own credit score or get your finances back on track. The money that you would spend for the assistance of an agency can be used to pay down your debt. If you are trying to remove erroneous negative information from your credit report, see the section below on disputing errors.

For more info and to order your credit report with FREE credit score please visit

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