Three Free Credit Reports

The Fair Credit Reporting Act mandates the three credit bureaus to provide one free annual credit report score to each consumer. This means that each individual can expect at least three free credit reports every year – one from Experian, one from Equifax and one from TransUnion.

You may choose to get your free credit reports all at once. This is especially true when you want to compare your credit records from the three credit bureaus to monitor any discrepancies or inconsistencies. You may also opt to get your credit report every four months. This way you can have a lot of chances to check and review your credit records all year round.

Still, should you desire to see your credit records more frequently, you can do so as long as you pay a minimal fee for every extra credit report you will be requesting. You can contact the three credit reporting agencies using your phone, via mail or through the Internet to ask for a copy of your credit report anytime of the year.

But is it also possible to get more than three free credit reports in a year?

Special Situations that can Provide Free Credit Reports

The answer to the question above is a definite yes. Allow us to discuss special situations that will provide you an opportunity to receive more than three free credit reports in one year.

Situation 1: If you applied for a loan and you were turned down by a lender, you can request for a copy of your credit report score from one of the credit bureaus. You should send your request via mail and you should enclose the declined application to your letter. You need to send this mail within 30 days of your loan rejection.

Situation 2: You can also request for a free credit report if you are:

(a)   Unemployed;

(b)   Planning to apply for jobs within the next 60 days;

(c)    Receiving Public Welfare Assistance;

(d)   When you see bad credit history in your credit records that you would like to dispute, or

(e)   When you have suspicions of credit fraud.

Situation 3: If you are a resident of the state of Georgia, you can expect to receive as much as six free credit reports each year.

Reasons for Reviewing Credit Files Regularly

Now, why is it important to constantly monitor your credit records? The most important answer to this is to protect your financial prospects. We are all aware that credit scores are greatly associated with available credit lines. If a person has excellent credit ratings, he will surely have a wide array of credit accounts to choose from. However if a person has a low FICO score due to bad credit history, for sure he will find it difficult to get approved for credit lines.

So, if you have a high credit score, you should resolve to maintain it that way. But if you have less than perfect credit ratings, immediately work on regaining your credit worthiness by taking free credit repair sessions. Through these free credit repair services, you can receive practical advice in solving your credit problems and rebuilding your credit reputation. Soon, by following the tips provided in these sessions, you can eventually regain your credit worthiness and enjoy once again a vast array of credit options.

We hope that this article helped answer the common question regarding how often a consumer can receive a free credit report.

However, a lot of people still find it hard to understand how a three digit score can be linked to credit risks, much more to our financial prospects. So to help all us fully grasp what our credit scores really mean, let us discuss some basic information regarding our credit ratings and how they influence our lives as consumers.

Credit Rating Defined

A credit rating is a mathematically computed value that reflects the risk involved in allowing a consumer assume credit. This value is computed using a credit scoring system such as the one developed by the Fair Isaac Corporation. The credit score calculated using the by the Fair Isaac Corporation is also called FICO credit score, and this is one of the popular reports sold by the three credit reporting agencies.

The FICO scoring system features numerical values that range from 300 to 850. A consumer, whose score is near 850, is often considered a credible borrower. On the other hand, an individual with a credit score near the bottom of the FICO scoring system is often viewed as a risky borrower.

Still, a consumer cannot instantly have a credit score. There is an important requirement before the three credit reporting agencies can compute an individual’s FICO score. What is this? Well, a consumer must have at least one credit account that has been open for more or less six months. This will serve as the sole basis in computing the credit rating of the individual.

What things influence a credit score? There are three main factors that have great impact on a FICO rating. These are: payment history, amount of credit, and the age and type of credit accounts. The payment history reflects how a responsible consumer manages his credit accounts. This factor considers on-time, late or skipped payments that an individual incurred in relation to his existing credit accounts.

On the other hand, the amount of credit takes into consideration the level of a person’s debt. This factor looks into the number of open credit lines that a consumer possesses. Meanwhile, the length of credit history determines the average age of a debtor’s credit accounts, as well as the types of credit lines that he has taken.

Ways to Improve Credit Scores

Now let us identify some steps that you can employ to improve your credit report score.

-          Use a credit card lightly. Never max out your credit card as this will pull your credit score down.

-          Pay your monthly charges in full and on time each month.

-          Take advantage of free credit repair services. This is because through free credit repair sessions, you will be given proper guidance on managing your finances, as well as possible ways on how you can improve or maintain excellent credit ratings.

For this reason, consumers are advised to check their credit reports at least twice a year or before applying for new credit.  In this article, let us discuss the importance of checking your own credit report and how to understand the information contained in your report.

Credit Check

Why should you be interested to see your own credit report?  First, it is not a rare case to find errors or misinformation in credit reports.  In some cases, the creditors may report incorrect information to the bureaus and there are also instances when the bureaus themselves commit the errors.

Some people who have been a victim of identity theft and fraud may find unfamiliar charges in their accounts or new accounts opened without their consent.  Checking your personal credit report gives you the opportunity to correct erroneous details immediately to prevent them from damaging your credit standing.

When reviewing your report, make sure that all details listed under your personal information are accurate as there as cases when other people’s credit file get mixed up with another person’s credit.  Make sure that all charges in each of your account are correct.

Credit fix

What if your poor credit rating is a result of debts or missed payments?  Needless to say, poor credit management can lead to a low score.  If you plan to apply for a personal loan or a significant amount of financing, it is recommended that you check your report at least six months before applying for a loan.  This way, you will have sufficient time to work on improving your score.

A Good Credit Report is Worth It

Taking care of their personal credit report is your responsibility.  An impressive credit will not only give you the advantage of getting easy approval, it will also give you access to loans with the best interest rates and flexible repayment terms.  Furthermore, enjoying good credit report score gives you peace of mind and it’s definitely something you should be proud of.

Different Methods of Consolidating Debt

There are actually different ways to consolidate debt. The most popular method is by acquiring a loan from a lender and using the amount borrowed to pay all existing debts. A debit consolidation loan is usually secured with collateral although some lenders do offer unsecured loans for debt consolidation. As can be expected, unsecured loans are often limited to a smaller value and may come with higher rate of interest.

Another way to consolidate is to sign up for a debt repayment program with a credit repair agency or debt consolidation company. Under the program, the borrower will submit payments to the agency, who in turn, will distribute payments to corresponding creditors. This arrangement may be recommended for people who are having a hard time managing different due dates and dealing with different creditors.

For people with credit card debt, one way to consolidate is to get a credit card with zero introductory rate. By transferring balances to the zero APR card, the cardholder can significantly reduce monthly payments and save money by not paying additional interest charges.

Is Debt Consolidation the Answer?

Keep in mind that not all agencies that offer debt consolidation loans or debt consolidation programs are worth trusting. Sometimes, even so-called “non-profit” organizations may take advantage of consumers with bad credit problem by imposing hidden fees or unreasonably high interest rate.

It is very important to create your personal repayment plan to make sure that you will not miss or fall behind your consolidation payments. Remember, if you have consolidated your debts through a secured loan, there is the risk of losing your property to your lender if you default with your payments.

Last but not least, people who sought debit consolidation must be very careful not to incur new debts while in the middle of repayment. Unfortunately, many consumers found themselves stuck in a deeper dilemma because they have carelessly incurred new debts half-way through debt consolidation. As a result, they ended up having more debts than they had before they consolidated, complicating the problem.

Yes, successful debt consolidation will depend on three things. First, the borrower must find a trusted debt consolidation company. Second, the borrower must be able to keep up with his/her debt consolidation payments. Third, the borrower must avoid incurring new debts while in the middle of the debt consolidation.

What if you want to apply for a new account? Before submitting application to your chosen lender, you need to request for the freeze to be lifted. Lifting or thawing can take only a few minutes to a few days depending on the credit bureau. As mentioned above, you can specify the company that will be given access to your report and for how long you want your account to be accessible.

Is it the same as fraud alert?

Fraud alert is an option to protect against fraud. When your credit report is on fraud alert, creditors are supposed to notify you if someone tries to open a new account under your name. However, some creditors may ignore the alert and approve a new application without first notifying the owner of the credit report.

Unlike a fraud alert, credit freeze is more restrictive. You can request for a fraud alert simply by calling the credit bureaus but if you want to request for credit freeze, you must send a letter through a registered post mail with at least 2 copies of proof of residency or identification. There is also a charge of $10 to $12 for each credit bureau.

Once your credit report score has been frozen, it will stay frozen for an unlimited time unless a request for a lift has been made. Take note that there is also a a fee of $10 to $12 for lifting and you will be required to provide the PIN code that you were given when your account has been frozen.

Despite the fees and minor inconveniences, placing your report on freeze is a great way to protect yourself from the risk of ID theft and fraud. It prevents identity thieves and scammers from committing crimes such as opening a new account using other people’s identity. Without access to the report, a creditor will not be able to grant approval to a new application. In addition, identity thieves will not be able to take a look into your credit file and steal information against you.

What is credit freeze?

Credit freeze is applied to the individual’s credit file. Once your file has been put on a freeze, all new inquiries on your report will be blocked from view. That means new creditors, insurers, employers, not even you, can access your credit report unless a request has been made to “unfreeze” or “thaw” the account.

A consumer can request for a credit freeze from each of three major credit bureaus by sending in a letter along with 2 photocopies of a proof of residency or identity (driver’s license or a recent billing statement). There is also a fee that ranges from $10 to $12 for each bureau.

Take note that in order to work a consumer must request all three major credit bureaus (Equifax, Experian, TransUnion) to freeze his/her file to make sure that no one will be able to access the report without permission from the real owner.

Thus, if someone tries to open an account using your identity, the new creditor will not be able to check the applicant’s credit report, and therefore will not grant approval. When the creditor attempts to make an inquiry, the bureau will send a message that the file has been placed on freeze.

Opening New Accounts

What if you want to apply for new credit? Before submitting your application to your chosen lending company, you must first send a request to the three bureaus to have the freeze on your report lifted. The process of lifting or unfreezing can take up just a few minutes to a few days, depending on the credit bureau.

When you request for a lift, you must specify the exact name of the creditor that you wish to be allowed to access your report and how long you want your credit report to stay open. To confirm the request, you must also provide the PIN code you received when you placed your file on freeze. Making the request will cost you another $10 to $12 for each bureau.

Stay Vigilant

Placing your credit report score on freeze provides additional protection against the risk of Identity Theft and fraud. Nonetheless, consumers are strongly advised to stay vigilant in protecting their personal information particularly when using the internet, the ATM, and their credit cards.

What is Bankruptcy?

In finance, bankruptcy is a legal process by which people and businesses can obtain a fresh start from their debts. Filing for bankruptcy means that a person or a business is in dire financial difficulty. The entity cannot repay the debts owed based on the agreement made with creditors.

In this option, all or a portion of the outstanding debts will be eliminated. If this is not possible, the terms of payments will just be extended, under the supervision of a court.

Bankruptcy is not only meant to protect debtors. It also serves an important function for creditors. This is because  unsecured creditors can equally share in whatever payments a borrower can afford to make. This way they are also able to regain a portion of the funds they have provided for credit.

Now, what are the good and bad sides of having a bad credit report? How does this option influence the records you have with the three credit reporting agencies? Allow us to discuss the answers to these questions.

The Good Side of Bankruptcy

Upon filing for bankruptcy, all collection activities must stop. Your creditors cannot attempt to collect the debts you owe them. This is because a bankruptcy removes your legal obligation to repay most of your debts. You are also given due rights to protect yourself from harassment, especially from overeager credit collectors. You can easily file complaints against any lender who will try to regain the money you owe them, even though you have already filed for bankruptcy.

Bankruptcy also provides protection. It can prevent you from losing valuable utilities services. This is because the law mandates utilities providers to continue or restore providing services to your home.

You can also prevent further wage garnishment. This assures you that you receive the full income you earn each month, and that no part of your income will be taken to pay any of your debts. Still, this special provision of bankruptcy is subject to the result of the Means Test that will be employed by the bankruptcy courts to determine whether or not your monthly income allows you to repay your existing credit obligations.

Bankruptcy also provides you an opportunity to start anew. Without worrying about debts, you can easily focus your attention in managing your finances well. You can also make a conscious effort not to restore old spending habits. This will surely prevent you from falling again into debt traps.

The Bad Side of Bankruptcy

Of course, bankruptcy has its own negative aspects. A bankruptcy mark is usually retained on your records for a maximum of ten years. This will cause you to have a bad credit report and this may in turn influence your chances of easily locating low interest loans. Lenders are usually reluctant to extend credit to people with bad marks in their credit report. Still, a growing number of lending firms are offering loan programs even after a recent bankruptcy. This is because they know that a debtor cannot file again for this option for another seven years. Thus, they feel assured that they can regain the money they extend for credit.

A bankruptcy also pulls your credit score down. You can lose more than a hundred points in your records with the three credit report firms. And it may take some time for you to recover your lost points. But, if you are determined enough to recover your financial health, you just have to wait for your bankruptcy mark to close. Then you can apply for a new loan. Just make sure that you pay all your charges on time, and soon your credit scores will shoot up. In the end, you will hold on to a credit report that you can really be proud of.

When done for the right reasons, filing for bankruptcy can be beneficial. It can work wonders in relieving anxiety over credit problems.

So, allow us to enumerate the many benefits of filing for bankruptcy. Who knows, this may be the best solution for you to free yourself from any form of debt!

Benefits of Bankruptcy

Upon getting approved for bankruptcy, you can immediately experience the following benefits:

1. Discharge most, if not all, of your debts. Filing for bankruptcy frees you from your financial obligations. This means that after your bankruptcy proceedings, you can expect to be freed from most of your creditors. You are no longer legally obligated to repay your personal loans, and other credit card debts.

But remember this: You are still liable to settle non-dischargeable credit. You will still be required to pay your family support, student loans, criminal fines and certain types of taxes. Should you have secured debts and mortgages, remember that they also survive bankruptcy procedures.

1. A complete halt to collection procedures. Lenders are very much eager to regain the money they have extended for credit. But as soon as you have filed and undergone bankruptcy procedures, your creditors must stop all collection activities. If a creditor continues to collect your debts, you have the legal rights to file complaints against it. Your lender may be cited for contempt or ordered to pay you damages.
2. Prevention from having your utilities cut off. You may miss out on your utilities payment because of running out of cash. But your bankruptcy must prevent the utilities provider from cutting off your services. If the company has already made actions against you, they are mandated by law to restore services, as part of your declaration of bankruptcy.
3. Protection from fraudulent credit reports. A bankruptcy allows you the opportunity to scrutinize your credit report. You can request for a copy of your records from any of the three credit reporting agencies. Then you can thoroughly review it to dispute false claims of creditors. Some creditors may claim that you owe them much money. But if you hold on to your credit report you can easily identify how much you really borrowed from them. This way you cannot be easily manipulated to pay more than what you really owe a creditor.

Yes, bankruptcy can provide these amazing benefits, if this option is really inevitable. So, do not think of it as something negative. Look at it as a good program that will help you eliminate your debts.